Levied funds - 522(f) or 522(g),543?
Posted: Sat Feb 09, 2013 1:19 pm
Holly,
Even if legal title passes to the creditor, the debtor still retains an equitable interest in the funds and they are property of the estate pursuant to 541(a)(1)until the creditor applies the funds to the underlying debt. I used this argument successfully before MT in 2011 ina Chapter 11 where a receiver was holding rents from a commercial building on the petition date.
See Amaravathi page 632 (attached).
If the Sheriff is still holding the funds, then the debtor still has an equitable interest and those funds are estate property.
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Boulevard, Suite 203, Culver City, California 90230-4647
Telephone: (310) 391-2400* Toll Free: (800) 307-3328 * Fax: (310) 391-2462
________________________________
To: cdcbaa@yahoogroups.com
Sent: Saturday, February 9, 2013 12:05 PM
Subject: Re: [cdcbaa] Levied funds - 522(f) or 522(g),543?
Nicholas et al,
I have heard conflicting things about BB's procedure. From one of her orders denying a 522(f) motion where a lien avoidance (and turnover of levied funds) was attempted via 522(f) only: "If title has not yet passed, this is merely a turnover of property
of the estate (and not a lien avoidance). If title has already passed, transfer should be avoided as preference, if it is in fact
a preference. In either event, the motion that debtor has brought is not the correct motion." After denial of the 522(f) motion,the debtor then fileda Motion for Turnover. That too was denied. 10-14218, de Guzman. After that, the debtor gave up.
So the procedure depends upon when title has passed. In the case above, the funds were being held with the sheriff and had not been turned over to the creditor, but BB denied the 552(f) and the Motion for Turnover. There was no guidance in the Order denying the Motion for turnover, but it seems that the proper procedure may have been a preference action? Please chime in.
Holly Roark
holly@roarklawoffices.com
http://www.roarklawoffices.com/
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
On Thu, Feb 7, 2013 at 1:35 PM, Nicholas Gebelt wrote:
>
>[Attachment(s) from Nicholas Gebelt included below]
>Dear Holly,
>
>If you listed the levied funds in Schedule B and exempted them in Schedule C, and if youre past the 30-day bar date for objections to exemptions, then you should use 522(h) coupled with 522(g) and >
>Some judges insist on your using an adversary proceeding because of Fed. R. Bankr. Proc. 7001(1), since youre trying to recover money. Others will let you use a motion if the motion is ultimately unopposed. See, e.g.,In re Shorts, 63 B.R. 2 (Bankr. D. DC 1985). However, if you receive an opposition based on the assertion that you should have used an adversary proceeding, you may have a lot more work on your hands. Therefore, make sure the amount levied is worth the expense.
>
>Alternatively, I suppose you could use 522(f)(1)(A) to avoid the judicial lien against the funds (see, e.g., In re Buzzell, 56 B.R. 197 (Bankr. D. MD 1986)), though I prefer to use 522(h) because the order avoids the actual transfer rather than just the lien.
>
>I have attached a Word version of a 522(h) motion I successfully used in a Judge Kwan case.
>
>One final note: My experience is that the Sheriff is extremely dilatory in returning the money. In fact, on occasion I have had to file an OSC motion against the Sheriff to get seized money back. If you have to do this, you can get costs and attorneys fees because 106(a)(1) waives sovereign immunity with respect to 362, but you cannot get punitive damages because of 106(a)(3).
>
>Good luck,
>
>Nick
>
>Nicholas Gebelt, Ph.D., J.D.
>Board Certified Bankruptcy Specialist
>
>
>
>Law Offices of Nicholas Gebelt
>15150 Hornell Street
>Whittier, CA 90604
>Phone: 562.777.9159
>FAX: 562.946.1365
>Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com
>Web: www.goodbye2debt.com
>Blog: www.southerncaliforniabankruptcylawblog.com/
>
>We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
>
>Confidentiality Note: This e-mail is intended only for the person or entity to which it is addressed and may contain information that is privileged, confidential, or otherwise protected from disclosure. Dissemination, distribution, or copying of this e-mail or the information herein by anyone other than the intended recipient, or an employee or agent responsible for delivering the message to the intended recipient, is prohibited. at 562.777.9159 or e-mail info@gebeltlaw.comand destroy the original message and all copies.
>
>Representation Note: If you have not signed a contract of representation, the Law Offices of Nicholas Gebelt do not represent you, and this email does not contain any legal advice for you.
>
>IRS Circular 230 Disclosure: In order to comply with the requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. >
>From:cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] On Behalf Of Holly Roark
>Sent: Thursday, February 07, 2013 12:27 PM
>To: cdcbaa; Strictly Bankruptcy Issues
>Subject: [cdcbaa] Levied funds - 522(f) or 522(g),543?
>
>
>To recover levied funds in a bank account, would it be a 522(f) motion or 522(g)? 522(f) is for judicial liens - and this levy was made pursuant to a judgment,but I believe the levy itself is an attachment lien, (unless I am confusing this with a prejudgment remedy.)
>
>Debtor filed a claim of exemption in state court and alsoexempted the funds in the bankruptcy. We just want to get them back from the sheriff.
>
>
>
>--
>Holly Roark
>holly@roarklawoffices.com
>http://www.roarklawoffices.com/
>Central District of California
>Consumer Bankruptcy Attorney
>1875 Century Park East, Suite 600
>Los Angeles, CA 90067
>T (310) 553-2600
>F (310) 553-2601
>
>
The post was migrated from Yahoo.
