Using Bankruptcy to Remove a Judgment Lien

Question: I lost my job a credit card company sued me. Now that have a judgment lien on my home. Can I get rid of this lien in bankruptcy.

Answer: A discharge in bankruptcy voids the underlying judgment, but the discharge does not automatically remove a judgment lien from your property. If you qualify, your might be able to file a motion to avoid or cancel the line under Section 522(f) of the Bankruptcy Code.

Under Section 522(f), you can remove most types of judgment liens if the lien impairs an exemption that you would be entitled to claim under the law. Although bankruptcy is a federal law, it is largely state law that determines what property you can an cannot keep when a debtor files for bankruptcy.

Under California law, a homeowner can protect anywhere from $50,000 to $150,000 of the equity in a home from judgment creditors or creditors in a bankruptcy. A California judgment creditor can create a lien against the debtor's home by recording a document called an Abstract of Judgment. If the judgment lien impairs the debtor's ability to claim the maximum homestead exemption, the debtor can obtain a court order removing the lien under Section 522(f).

If you have a judgment lien against your home and want to learn more about how to remove it in bankruptcy, please feel free to contact us.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Bankruptcy Debtor Audits to Resume Monday

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the United States Trustee Program (USTP) established procedures to audit petitions, schedules, and other information in consumer bankruptcy cases filed on or after October 20, 2006. The USTP contracted with independent accounting firms to perform audits in cases designated by the USTP. Click here to read our original story on this issue.

In January 2008, the USTP temporarily suspended its designation of cases subject to audit for budgetary reasons. Beginning on May 12, 2008, the USTP will resume its designation of cases, although random audits will now be conducted in 1 out of 1,000 cases instead of 1 out of 250 cases.

Do I Have Any More Bankruptcy Hearings?

Question: I just got back from the Meeting of Creditors in my bankruptcy. Will there be anymore hearings before I get my discharge?

Answers: In most bankruptcy cases filed by individuals (Chapter 7 or 13), the only hearing is the Meeting of Creditors conducted by the appointed trustee. In Chapter 13 cases, the court might conduct a hearing on whether a proposed repayment plan should be confirmed and you would be notified of the hearing date by your attorney.

In vary rare cases, a creditor or trustee might conduct something called a Rule 2004 Examination. A 2004 exam "may relate only to the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge." These rarely occur.

There may be hearings on those matters such as a creditor seeking relief from the automatic stay to complete a foreclosure. But with those and other very limited exceptions, your Meeting of Creditors will be the only hearings in your case prior to receiving a discharge.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

American Dream, Economic Nightmare

Many homeowners are at a financial crossroads. A foreclosure epidemic in San Diego and nationwide is causing more and more people to seek credit counseling, foreclosure prevention services and protection in bankruptcy. Attorney Carl Starrett was recently featured two-part series by KUSI News in San Diego discussing some of the options available to homeowners in financial distress. Click here to see the very informative story as KUSI reporter Ed Lenderman examines the crisis.

Property Tax Relief for California Residents

With housing prices falling all over California, some homeowners are seeking relief to lower their property tax bills. If the current market value of your property (recent comparable sales) falls below the assessed or taxable value as shown on your tax bill, the California law requires Assessor's Office is required to lower the assessment. This type of property tax relief generally applies to recently purchased property. There are two periods during the year in which the taxpayer may appeal their assessed value for a temporary reduction:

(1) Between March through May: During this period, the taxpayer may submit a written request to the Assessor, indicating their opinion of value and providing supporting documentation, such as sales of comparable properties or a recent appraisal. The necessary forms are available from you local Assessor's office. The next deadline to apply for this type of relief is May 30.

(2) Between July 2 and November 30: During this period, the taxpayer must file an application form. Appeal forms can be obtained and must be filed with the Assessment Appeals Board at your local Assessor's office.

If a hearing becomes necessary, the testimony of a real estate professional is recommended. For more information on how to appeal the assessed value of your home and reduce your property tax bill, please contact us for a complimentary consultation.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.