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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
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Experience:  JD, MBA
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I already asked so Im not sure My own divorce attorneys say

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I already asked so I'm not sure? My own divorce attorneys say they have a lien on my settlement of 30,000 worth of my ex's co. stocks to be awarded sometime in the future becasue in NY there is a statutory lien against any future settlement the moment the trial is over and a decision is rendered. I filed for bankruptcy before they formally filed a lien in court, but they say because NY has a statutory lien on settlements, the bankruptcy will not discharge the 30,000 I owe them Is this correct or not. They are planning an adversorial hearing to get this money taken out of bankruptcy?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 7 years ago.

Hello and thank you for allowing me the opportunity to assist you.

Question: “they say because NY has a statutory lien on settlements, the bankruptcy will not discharge the 30,000 I owe them Is this correct or not.”

Answer: Not exactly, but it requires some explanation. Bankruptcy will discharge the debt you owe. However, bankruptcy does not eliminate a lien. Therefore, once you are discharged you won’t be personally liable for the money. However, since the lien still exists, the property with the lien (stocks in this case?) can be foreclosed upon and sold. Since your personal liability will be eliminated, if the sale of the stocks does not cover what you owe, then the creditor has no other recourse against you.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

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DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the State of Maryland. Accordingly, by continuing in this discussion and/or by “accepting” my answer you acknowledge that (1) we have not formed an attorney-client relationship, (2) my answer is general information only and is not legal advice, and (3) you should not rely on my answer in undertaking any course of action without first consulting with an attorney in person who can review all relevant facts.

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