How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask socrateaser Your Own Question
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 37802
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
Type Your Bankruptcy Law Question Here...
socrateaser is online now
A new question is answered every 9 seconds

In New Jersey- When does a party who has won an award in arbittration

Customer Question

In New Jersey- When does a party who has won an award in arbittration become a secured creditor?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 7 years ago.

Unless the original dispute concerned the plaintiff's right to a secured interest in property, or the award is one for a constructive or resulting trust, or equitable lien, then the plaintiff never becomes a "secured" creditor.


What the creditor gets is a lien against the debtor's real property in the jurisdiction where the judgment is filed.


But, that's not the same as being a secured creditor. An ordinary judgment (i.e., a money judgment) does not give a creditor a secured interest in the debtor's property. It merely gives the right to execute against the debtor's assets and wages so as to obtain satisfaction for the judgment and amount awarded.


Only where the court finds that the debtor has taken specific property of the creditor, does the creditor obtain the right to have the court order the property itself returned.


Note: if you're even more confused now than when you started, feel free to ask for clarification.



Customer: replied 7 years ago.
Where would such a creditor stand should the debtor declare bankruptcy?

When precisely is such lien created?
Expert:  socrateaser replied 7 years ago.

It largely depends on the type of dispute. Judgments that are the product of a defendant's intentional, fraudulent or wanton and reckless action can be refused a discharge by the bankruptcy court.


Judgments for ordinary debts, i.e., breach of contract, loan defaut (other than student loans), ordinary negligence, etc., will be discharged in a Chapter 7 (liquidation) action.


The general list of exceptions to a discharge are found in Title 11 USC 523.


Re the question of when precisely is the lien created, can you be more specific about the facts?


Customer: replied 7 years ago.
What I meant was where would this creditor stand in relation to all the other creditors, e.g., those holding mortgages and prior liens?
Expert:  socrateaser replied 7 years ago.

You would stand in the same position as any other ordinary unsecured creditor. Each unsecured creditor is entitled to a portion of any assets remaining after all of the higher priority claims are paid.



Terms and Conditions: By your continuing in this conversation with me, or by your clicking "Accept", you are expressly agreeing to all of the following: (1) our communication is for entertainment purposes only; (2) you are not consulting me in my professional capacity as an attorney; (3) you do not seek to establish an attorney-client relationship with me, nor do I with you; (4) you will not rely on anything I say and you will obtain appropriate legal counsel via a traditional/office consultation with an attorney licensed to practice in the jurisdiction where your legal issue arises (and you may not use our communication to avoid taxpayer penalties imposed by the U.S. Dept. of Treasury); (5) by communicating with me in this public forum you are irrevocably waiving any right to privacy, confidentiality and attorney-client privilege concerning the matters discussed. You further separately declare that any payment made by you is not consideration for this contract, nor offered for any services rendered by me on your behalf, but rather is made in genuine admiration and respect for my desire to help others. If you do not agree with these terms and conditions, then you must advise me immediately.