Levied funds - 522(f) or 522(g),543? [1 Attachment]
Posted: Sat Feb 09, 2013 12:05 pm
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 filed a 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
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 547(a).****
>
> ** **
>
> 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****
>
> ** **
>
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> *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 also exempted the
> funds in the bankruptcy. We just want to get them back from the sheriff.
> ****
>
> ** **
>
>
>
> -- ****
>
> Holly Roark****
>
> holly@roarklawoffices.com****
>
> 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****
>
> ****
>
> ** **
>
> ****
>
>
>
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
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 <ngebelt@gebeltlaw.com> 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 547(a).
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 n 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
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