杨清泉律师 - JUDICIAL LIENS AND BANKRUPT DEBTOR’S RESIDENCE PART 2

At that point, has a judicial lien for $70,000 attached to the debtor’s house? NO. American Express has a writ of wage garnishment but it has not yet applied for an involuntary lien against debtor’s properties in the county.  After 30 days from the issuance of the writ of wage garnishment, American Express applies for and obtains an involuntary lien against debtor for the judgment of $70,000. Is there a lien on debtor’s house? No. At this point, the involuntary lien has not yet been recorded in the recorder’s office. After one week, American Express records the notice of involuntary lien in Los Angeles County where debtor lives. Is there a lien for $70,000 on debtor’s house now? Yes.

How can debtor prevent the $70,000 lien from attaching to his residence? If debtor files for bankruptcy relief before the date of recording of the involuntary lien, the lien cannot attach to his residence because of the “automatic stay” in bankruptcy. The “automatic stay” is bankruptcy law that says that once debtor files a bankruptcy, all collection efforts are stopped as of the date and time of filing of the bankruptcy. For instance, in this example, debtor filed his Chapter 7 bankruptcy on November 24, 2011 at 2:01 p.m. American Express recorded the notice of involuntary lien for $70,000 on November 24, 2011 at 2:02 p.m. Did the lien of $70,000 attach to debtor’s residence? N0. The lien did not attach to his house because at 2:01 p.m. the bankruptcy filing automatically stopped all collection efforts. Since the recording of the involuntary lien is a collection effort, the recording is null and void.

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years.  He specializes in bankruptcy, business and civil litigation and has handled more than four thousand successful bankruptcy cases in California.  He speaks Mandarin and Fujien and looks forward to discussing your case with you personally.  Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.