Central District Consumer Bankruptcy Attorney's Association

It is very common to reopen a case to file a 522(f) motion, but if your sole basis is under 547 (preference) then you are out of luck, because there is a statute of limitations for the latter.
waynewilhelmlaw wrote:
Hey folks. Wondering what the rule is on avoiding abstracts of judgment
(liens) recorded prior to a bankruptcy filing for a 1998 case. Debtors had three
creditors who recorded abstracts before the debtors filed chapter 7. Debtor
now wants to sell real property but does not want to pay the large recorded
judgments. Real property was only worth approx $300k with a mortgage of
$250+ at the time of filing so there were no problems with homestead
exemption. Should debtor wait four more years to sell the real property or is
there a way to avoid the liens now so they don't have to wait to sell? Their
attorney who filed the chapter 7 told debtors they had to move to avoid the
liens within 90 days of the filing because they were recorded pre-filing, and
that it is too late to file a motion now - my research seems to say that the
motion can be filed at any time and it is not even necessary to reopen the
case - does anyone know anything about the 90-day rule? Any and all input
appreciated.
Wayne A. Wilhelm, Esq.
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****************************************
LAW OFFICE OF MARK J. MARKUS
http://www.bklaw.com/
http://www.californiabankruptcylaw.com/
e-mail: bklawr@bklaw.com
Phone: (818)509-1173
Fax: (818)509-1460

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It is very common to reopen a case to file a 522(f) motion, but if your sole basis is under 547 (preference) then you are out of luck, because there is a statute of limitations for the latter.

waynewilhelmlaw <waynewilhelmlaw@yahoo.com> wrote:
Hey folks. Wondering what the rule is on avoiding abstracts of judgment (liens) recorded prior to a bankruptcy filing for a 1998 case. Debtors had three creditors who recorded abstracts before the debtors filed chapter 7. Debtor now wants to sell real property but does not want to pay the large recorded judgments. Real property was only worth approx $300k with a mortgage of $250+ at the time of filing so there were no problems with homestead exemption. Should debtor wait four more years to sell the real property or is there a way to avoid the liens now so they don't have to wait to sell? Their attorney who filed the chapter 7 told debtors they had to move to avoid the liens within 90 days of the filing because they were recorded pre-filing, and that it is too late to file a motion now - my research seems to say that
the motion can be filed at any time and it is not even necessary to reopen the case - does anyone know anything about the 90-day rule? Any and all input appreciated.Wayne A. Wilhelm, Esq. ****************************************LAW OFFICE OF MARK J. MARKUShttp://www.bklaw.com/http://www.californiabank ... com/e-mail: bklawr@bklaw.comPhone: (818)509-1173Fax: (818)509-1460
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waynewilhelmlaw wrote:
Hey folks. Wondering what the rule is on avoiding abstracts of judgment (liens) recorded prior to a bankruptcy filing for a 1998 case. Debtors had three
creditors who recorded abstracts before the debtors filed chapter 7. Debtor now wants to sell real property but does not want to pay the large recorded
judgments. Real property was only worth approx $300k with a mortgage of $250+ at the time of filing so there were no problems with homestead exemption. Should debtor wait four more years to sell the real property or is
there a way to avoid the liens now so they don't have to wait to sell? Their attorney who filed the chapter 7 told debtors they had to move to avoid the liens within 90 days of the filing because they were recorded pre-filing, and that it is too late to file a motion now - my research seems to say that the motion can be filed at any time and it is not even necessary to reopen the
case - does anyone know anything about the 90-day rule? Any and all input appreciated.
Wayne A. Wilhelm, Esq.
We customarily reopen the case to do the avoidances. There is no 90 day rule per se but it it wise to avoid the liens during the normal course of the originally filed case before it closes (approximately 90 days after the 341).
Reopening the case later to avoid the lien is fairly easy - you reopen for the 'sole purpose of avoiding the liens' and in the order state that the case will be closed immediately thereafter.
(Be aware that there is a slight risk in reopening - Trustee could be nasty - but although I am aware this is a potential problme, I have never seen it happen.)
Your motions to avoid (easy to use the form motions) have to state the value of the proerty at the time of filing. Good Idea to invest in an appraisal - from the time of the BK because the liens must interfere with the exemption. If you did not use the proepr exemption at the time, you can change it now.
Potential problems? Laches. It is great when you can attach the decalration of the Debtor who can state that he did not know about the liens. But if the original attorney was warning them to file the avoidance motion while the case was open, I bet he listed these as Schedule D debts then. Judge Mund recently denied avoidance of one such lien (note: after the creditor complained)- because it was not done at the time of the original filing - but allowed the avoidance of one that was a surprise. But I have had judges routinely allow such in the absence of a creditor opposition.
Good luck.
Gail
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waynewilhelmlaw <waynewilhelmlaw@yahoo.com> wrote:
Hey folks. Wondering what the rule is on avoiding abstracts of judgment (liens) recorded prior to a bankruptcy filing for a 1998 case. Debtors had three creditors who recorded abstracts before the debtors filed chapter 7. Debtor now wants to sell real property but does not want to pay the large recorded judgments. Real property was only worth approx $300k with a mortgage of $250+ at the time of filing so there were no problems with homestead exemption. Should debtor wait four more years to sell the real property or is there a way to avoid the liens now so they don't have to wait to sell? Their attorney who filed the chapter 7 told debtors they had to move to avoid the liens within 90 days of the filing because they were recorded pre-filing, and that it is too late to file a motion now - my research seems to say that the motion can be filed at any time and it is not even necessary to reopen the case - does anyone know anything about the
90-day rule? Any and all input appreciated.Wayne A. Wilhelm, Esq. We customarily reopen the case to do the avoidances. There is no 90 day rule per se but it it wise to avoid the liens during the normal course of the originally filed case before it closes (approximately 90 days after the 341).
Reopening the case later to avoid the lien is fairly easy - you reopen for the 'sole purpose of avoiding the liens' and in the order state that the case will be closed immediately thereafter.
(Be aware that there is a slight risk in reopening - Trustee could be nasty - but although I am aware this is a potential problme, I have never seen it happen.)
Your motions to avoid (easy to use the form motions) have to state the value of the proerty at the time of filing. Good Idea to invest in an appraisal - from the time of the BK because the liens must interfere with the exemption. If you did not use the proepr exemption at the time, you can change it now.
Potential problems? Laches. It is great when you can attach the decalration of the Debtor who can state that he did not know about the liens. But if the original attorney was warning them to file the avoidance motion while the case was open, I bet he listed these as Schedule D debts then. Judge Mund recently denied avoidance of one such lien (note: after the creditor complained)- because it was not done at the time of the original filing - but allowed the avoidance of one that was a surprise. But I have had judges routinely allow such in the absence of a creditor opposition.
Good luck.
Gail



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Dear Wayne,
I have had many of these post-discharge, post-closing lien avoidance
matters. I have never heard of any "90-day rule." Certainly, I have
never seen such a rule as an impediment to post-closing lien
avoidance.
Of course, you should do the motion to reopen the case (dicta in some
cases to the contrary). The Rules are quite liberal and there is no
limitations period for a motion to reopen to file a motion to avoid
liens. The primary defense is laches, with real prejudice. Once the
case is reopened, do a regular lien avoidance motion with a
retrospective appraisal to the date of filing the bankruptcy case.
Mike Candiotti
wrote:
> Hey folks. Wondering what the rule is on avoiding abstracts of
judgment
> (liens) recorded prior to a bankruptcy filing for a 1998 case.
Debtors had three
> creditors who recorded abstracts before the debtors filed chapter
7. Debtor
> now wants to sell real property but does not want to pay the large
recorded
> judgments. Real property was only worth approx $300k with a
mortgage of
> $250+ at the time of filing so there were no problems with
homestead
> exemption. Should debtor wait four more years to sell the real
property or is
> there a way to avoid the liens now so they don't have to wait to
sell? Their
> attorney who filed the chapter 7 told debtors they had to move to
avoid the
> liens within 90 days of the filing because they were recorded pre-
filing, and
> that it is too late to file a motion now - my research seems to say
that the
> motion can be filed at any time and it is not even necessary to
reopen the
> case - does anyone know anything about the 90-day rule? Any and all
input
> appreciated.
>
> Wayne A. Wilhelm, Esq.

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Hey folks. Wondering what the rule is on avoiding abstracts of judgment
(liens) recorded prior to a bankruptcy filing for a 1998 case. Debtors had three
creditors who recorded abstracts before the debtors filed chapter 7. Debtor
now wants to sell real property but does not want to pay the large recorded
judgments. Real property was only worth approx $300k with a mortgage of
$250+ at the time of filing so there were no problems with homestead
exemption. Should debtor wait four more years to sell the real property or is
there a way to avoid the liens now so they don't have to wait to sell? Their
attorney who filed the chapter 7 told debtors they had to move to avoid the
liens within 90 days of the filing because they were recorded pre-filing, and
that it is too late to file a motion now - my research seems to say that the
motion can be filed at any time and it is not even necessary to reopen the
case - does anyone know anything about the 90-day rule? Any and all input
appreciated.
Wayne A. Wilhelm, Esq.

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