I want to get a lien avoidance now on exempt property. Current value of home which includes the deduction of 5% selling costs is $264,000.00. First lien was listed as unsecured cuz there actually is no recorded lien. It's the first mtg. 2nd mtg is 101,000.00 and it's a recorded HELOC, only secure lien. There are 2 judgement liens. Do I just motion for hearing and lien avoidance? Trustee abandoned everything and case will be discharged soon so I hope I don't have to give creditor 28 days notice cuz case and time to object ends in 3 weeks. Can I do a motion for shortened time? The homestead exemption is $175,000.00 and the first unsecured mtg impedes the exemption as well as liens. Been reading lots and I've concluded and collateral lien avoidance is what I do for the unsecured first mtg that never recorded a lien, is this right? Please help us with what to do first or should we try to convert to a chapter 13? We have another house that we Aree amending schedules and making it also unsecured (which we put in the schedules but now want to put "0" on schedule a because all they have is a recently recorded beneficiary deed of trust but no note so their beneficial interest is currently nothing because it's in a trust
State/Country relating to question: California
Hello and thank you for allowing me the opportunity to assist you.Q: Do I just motion for hearing and lien avoidance?A: Yes, you can file a Motion to value the collateral pursuant to Rules 3012 and 9014.Q: Can I do a motion for shortened time?A: Yes, you can file a Motion for shortened time for the creditor to respond.Q: Been reading lots and I've concluded and collateral lien avoidance is what I do for the unsecured first mtg that never recorded a lien, is this right?A: Unrecorded liens are generally voided, so filing for a strip-off may be unnecessary. However, the first lienholder may have an argument, such as equitable subrogation, depending on the facts. For example, if there was a refinance, and that is how the lienholder obtained its lien, then it may have an argument that it should stand in the shoes of the lienholder that it paid off. In that case, it could potentially rely on that paid-off lienholder's recorded lien and claim that it is in first position. I strongly suggest that you retain an attorney considering the amount of money at stake.Q: Please help us with what to do first or should we try to convert to a chapter 13?A: I answered the other questions assuming you were already in a Chapter 13. You cannot strip-off a lien in a Chapter 7. If you need to strip-off the lien, then converting is wise. But if the unrecorded first lien does not need to be stripped-off for the reasons mentioned above, then converting should not be necessary.If you would like any additional information or need clarification, please do not hesitate to ask! Also, I strive to be as helpful as possible so that you are satisfied and will give me positive feedback. Accordingly, please remember to only rate my answer when you are 100% satisfied. IF you feel the need to click either "I expected more" or "Helped a little" (which are considered negative ratings on this website), please stop and instead of rating me, reply via the REPLY or CONTINUE CONVERSATION button with the issue that you have. I will be happy to continue our discussion and do everything that I can to provide you with the service that you seek.Thank you.
Licensed to Practice Law
Ps why do I need to do a motion to value collateral first? So the judge knows what to avoid since it impedes homestead exemption.
Hi again.In some jurisdictions the strip-off action is filed via adversary proceeding, and in other jurisdictions it is filed via motion to value collateral. My understanding is that California adheres to the latter.
Aha hence motions to view collateral on his calendar. Rules 3012 and 9014 are those 11 USC 3012, etc? Don't I have to notice creditor within 28 days? Because case will be discharged prior, so di file motion for shortened time with it? Are their preprinted forms for this motion or where would I find all the elements and do I need to put jurisdiction pursuant to?
Hi again.Rules 3012 and 9014 refer to the rules of bankruptcy procedure, not title 11 of the USC (I provided a link in my earlier answer). Yes, the creditor has 28 days to object, so I would file a motion for shortened time to respond with the motion to value collateral. No, there are no forms for those motions so far as I know. I always draft them myself. However, you can call the bankruptcy court clerk in your jurisdiction and ask if there are any such forms available. Making a jurisdiction statement is not a bad idea, though I doubt the court will throw out your motion if it doesn't include it.
Q: Please help us with what to do first or should we try to convert to a chapter 13?A: I answered the other questions assuming you were already in a Chapter 13. You cannot strip-off a lien in a Chapter 7. If you need to strip-off the lien, then converting is wise. But if the unrecorded first lien does not need to be stripped-off for the reasons mentioned above, then converting should not be necessary. (your answer above)I didn't understand why the first unrecorded lien would not need to be stripped off. Could you please explain so that I can see if someone can help me pay for an attny because I don't think we can convert to a ch 13, not enough time to educate ourselves. Because from the self educating we have done it seems after a chapter 7, the bank can foreclose even though they were listed as a completely unsecured debt. Is that correct? Would a motion to value collateral postpone the discharge date or objection to discharge? As well as converting to a chapter 13?
Hi again.The unrecorded lien would not need to be stripped off if the trustee exercised his rights under Section 544 (referred to in the other thread). However, as I wrote in that other thread, that likely didn't happen, and if it did, it would not have helped you because the trustee would have sold your property. I apologize for not explaining that better here.After a Chapter 7, a lender can foreclose even if it is completely underwater. A lien can be stripped off in a Chapter 13, but not in a Chapter 7. Filing a motion to value would not help in a Chapter 7. Yes, it could delay discharge because the judge will deal with it, but it won't help strip the lien. You can try converting to a 13, or waiting until after you're discharged, then filing a 13 (which does have some risk since there could be a good faith argument). I do strongly suggest that you hire an attorney if possible.
What would the attorney do? And if I converted to 13 after discharge would the auto stay still be in place?
Hi again.The attorney can review everything in detail, and then advise you as to whether to convert, to file a new 13 after the 7 is discharged, etc., and he can help you strip off the lien if you do convert or file a new 13. You wouldn't convert to a 13 after you are discharged, however. But if you convert beforehand, or if you file a new 13, then the automatic stay will be in place.
Oh boy I tried to stay on other thread but when it says, ask me another question, I wrote it and it went to anyone, how do I stay on one thread with you? Does that mean I don't ever click the happy face until I'm done asking questions? Geez doesn't seem fair to your time/value if I just keep askin away. Or is that how this site works, I just keep replying until I have no more .'s? This is what I was tring to ask you and posted where it says, ask me another ? But like I said it went to all bk Attnys and I'd like to stick with youBut they don't have a lien if it isn't recorded do they? I was asking new ? So u can be compensated, is this how to do it and stay in one thread? What I'm saying is trustee was going to sell that house cuz I was listing one that's better for me to live in with my Disability and is being attacked (4-closure) as exempt. I told him I would amend and I did and I listed other house as exempt so he wouldn't sell it. My kids live there and one has many health problems. That's been their home for 10 years. This house is smaller and no stairs. I can't do stairs cuz of my disability and the pain is horrible with the stairs and renders me useless and pain med dependent, so I am living in the house I didn't exempt with homestead. But I'm in the process of amending cuz some things came up like found new creditor, discovered servicers wasn't creditor and just found out who creditor is on the house so I think I have to add them to sch D with the servicers and notice them of bk. Optional Information: State/Country relating to question: CaliforniaEdit
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).