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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 11629
Experience:  JD, MBA
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I am representing myself pro se in a Chapter 7 bankruptcy.

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I am representing myself pro se in a Chapter 7 bankruptcy. My home(primary residence) has two secured debts against it and two judgement liens. I f everything is added up I have negative equity. If the two judgement liens (civil) are discharged, I will show $90000 equity.
My schedules are due tomorrow. Do I assume the judgement liens will be discharged and show the equity, or do I show negative equity with the judgement liens intact? If there is $90000 equity, is there an exemption that will protect this.

Hello and thank you for the opportunity to assist you. My name is XXXXX XXXXX I will do my very best to answer your legal questions.

If the judgment liens were filed within 90s days of filing the bankruptcy, then they can be avoided because such liens would be considered preferences.

Even if the judgment liens are older than 90 days, you can probably get at least one of the judgment liens (the later one) eliminated or reduced because it impairs an exemption. In Maryland, you can exempt about $22k of home equity. Unfortunately, there is no way to protect more than that. The judgment lien that impairs that exemption can be eliminated or reduced such that your exemption is no longer impaired.

In any event, I'm sorry to say that since you can only exempt about $22k of home equity, you are at risk of losing the house even if the liens can be avoided. The bankruptcy trustee will likely sell the house to get at the non-exempt equity. It looks like you're between a rock and a hard place on this issue.

I am truly sorry to give you this bad news, but please understand that it would be unfair to you (and unprofessional of me) to provide you with anything less than an honest response. However, if your concerns were not satisfactorily addressed, then please let me know, and I will be happy to clarify my answer. I do ask that you rate me based upon whether I answered your question, and not based upon whether the answer was good news or bad news. Your positive feedback is greatly appreciated. Thank you for using our service!

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TJ, Esq. and 5 other Bankruptcy Law Specialists are ready to help you
Customer: replied 3 years ago.

For the purpose of filing the initial financial statements and schedules, do I count the judgement liens as "secured" so that I have 0 equity, or do I show thfe $90,000 in equity that I would have if the jdgements are discharged?

Hello again.

You should list the property and liens in the way that you intend to argue. Accordingly, if the liens attached within 90 days, then you would not list those judgments as secured. If they are older than 90 days, but one impairs your exemption, then you would list that particular judgment as secured only up to the amount of the judgment minus your exemption.
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Customer: replied 3 years ago.

I'm in the midst of drafting a motion to avoid lien with regard to my brother's judgement lien on my home. This will enable me to get my

homestead exemption. He also has possession of my two cars, which I understand are still unsold. He gets to keep these?

Also, I just received in the mail an IRS statement of unpaid taxes by my corporation, which was a PA. I would like to tell the IRS to put a lien on my house so that they get paid instead of my brother. The IRS is closed due tothe federal government funding debacle. Does the IRS get paid from the house foreclosure sale befor my brother?

Hello again.

Assuming your brother took possession of the cars due to the judgment, then he would have to return them so long as you file bankruptcy within 90 days. The possession of the vehicles in that situation would be considered a preference. If more than 90 days have passed, however, then he can keep them (or more precisely, sell them).

With regard to the IRS, they must get in line like everybody else. In other words, if your brother's lien was recorded before the IRS's lien, then he would get paid before the IRS.

Does that answer your questions?