Creditors have the legal right, in the form of a court order, to pursue collections against the party that owes money, also known a judgement. These judgements can lead to a lien being placed on that person’s property. Under Chapter 7 bankruptcy, there is the possibility that a judgment lien against a property can be discharged under the lien avoidance clause. While seemingly difficult for bankruptcy defendants to protect themselves from such liens, with the help of our expert South Florida bankruptcy attorneys, building and arguing a strong motion for such judgment lien avoidance is more than possible.
What are Judgment Liens?
A judgment lien is a result of a creditor winning a lawsuit and recording a nonconsensual lien against the defendant’s property as record. In Florida, as well as the majority of other states, judgment liens on personal property are filed with the state. Almost any property is susceptible to a judgment lien, including real estate, personal property, and vehicles. Most creditors will not pursue a lien against a defendant’s real estate unless there is a significant equity investment in the property. Some states allow for judgment liens to be placed against personal property, however, they are normally easily exempted and therefore not very effective. Regarding vehicles, the creditor has the ability to file a judgment with the state motor vehicle department to place a lien any transportation vehicle owned.
Judgment Liens Can Be Avoided
There are certain criteria that need to be met in order to avoid a judgment lien. First, the lien must result from a money judgment issued by a court. Second, an exemption is entitled in a portion of the property. Finally, if the lien will end in a diminishing or complete loss in equity if the property would be sold – in other words, the exemption would be challenged. If a defendant fits these three qualifications, there is the chance that judgment liens on any of their exempt property can be removed.
If feasible, our West Palm Bankruptcy attorneys suggest taking advantage of lien avoidance. Those who decide to file for bankruptcy may not be aware that they have leins on their property, or that they have the ability to remove them. While it might not be applicable at first due to the lack of exempt equity in the property, those who filed might become eligible for lien avoidance as time goes on. With the help of an experienced bankruptcy lawyer, filing to reopen a case to file a lien avoidance motion is extremely plausible.
When There is No Equity In Property
There have been cases where the court allowed bankruptcy filers to be exempt from judgment liens without them having any equity in the property, which typically is required to fulfill the impaired exemption stipulation. Our attorneys suggest scheduling a consultation to explore options and realize any exemptions or justifications that may apply. While time-consuming, when it comes to removing a lien on the property, extensive research and seasoned expertise are required to present a compelling and professional motion for judgment lien avoidance.
Contact the lawyers at Kelley, Fulton, & Kaplan today for a free consultation to get started.