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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 111638
Experience:  Attorney At Law handling education matters.
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I have a writ of attachment that I'm trying to show the

Customer Question

I have a writ of attachment that I'm trying to show the judge that a writ of attachment is not the same as a judgement - in other words, it should be considered non-liquid in terms of securing a claim. The writ will push me over the limit for Chapter 13 if the judge deems to be "readily ascertainable" or liquid. Do you know of a legal cite to prove the writ is not liquid?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  mmdesq replied 1 year ago.

Good Evening,

I will try to best answer your question.

I assume you're trying to make the debt limit in a chapter 13. The key for your argument will be that the writ of attachment is unliquidated until the asset attached is sold and therefore it should not go to the debt total if you qualify for chapter 13 debt limit.

I do not think the distinction between a writ of judgement and writ of attachment is truly the issue. Neither a writ of judgment or attachment is liquidated until an asset is sold. A writ of attachment is actually one step closer to being liquidated as it attaches to a specific asset than a writ of judgment. But as I said earlier neither is liquidated

I hope this clarification is helpful.

Customer: replied 1 year ago.
I appreciate the point, but my assets are currently frozen by the writ - we have not gone to court, instead a state court judge has ruled (thanks to an extremely draconian contractors license law) that all of my assets (lots in this case) are frozen until after our trial-she ruled in the space of 5 minutes that she was reasonably certain I would lose - but the amount was never discussed, she just entered their estimate ($1M) - this was astounding to me - my life and family were shut down by a 5 minute ruling that had no evidence presented, just precedents from their side.I have been in the bankruptcy process for over 6 months now, trying to stay in Chap. 13, but the judge declared in two of the hearings he is very uncertain about whether the writ is "readily ascertainable" - but clearly leans toward believing it is. I need a solid referenced case or law cite that says it is not. My hearing is coming up this Friday HELP!!!!!!
Customer: replied 1 year ago.
by the way the claimant is my brother, and it turns out that a writ can be "blown off" by a relative if bankruptcy is filed within a year of the writ. Something about 2nd degree consanguinity - so that's why I filed for Chap 13 - I just want to get back to where I was before the writ. This dude, who promised to pay for worker's comp and then reneged, has filed a writ against me after I built two homes for him, one in which we sold at a large profit and the other he lives in - he didn't pay me one red cent - and now he's put a writ on me for suing him for lack of payment - for not carrying worker's comp!! This rivals a biblical story!
Expert:  mmdesq replied 1 year ago.

What you are referring to with your brother is an insider preference.

Customer: replied 1 year ago.
but its good enough to release the writ-soI must convince the judge the writ is not liquid through legal means.
Customer: replied 1 year ago.
Cant talk now at arestsurant-do you think you can find a citation?
Expert:  mmdesq replied 1 year ago.

It is not a citation. It is a legal concept. Because of the attachment the debt is worth the value of the asset attached which will not be know until it is sold which makes it unliquidated.

Customer: replied 1 year ago.
I get your point, but the issue on the table is whether the writ of attachment is considered a valid lien - of course any asset's value is unknown until it's sold - but the lien amount (against me) is still the same. Your point is that it can't be considered valid until it's sold - I'm not sure this judge would agree with that - he would still argue that the basis for the writ is still liquid. Of course this is a "writ of attachment" and "not a writ of execution" - which is based on a judgement. Regardless, a concept is not good enough - I need the legal underpinning for the concept - but I prefer to dismiss the writ as non liquid because a jury trial is still pending - and of course the fact that the writ is removed in bankruptcy, which renders it invalid in any case. Also, the value the writ is based on was NOT subject to the same scrutiny a bankruptcy court would demand and is therefore illiquid as to merit. However, a writ is still a powerful thing and must be dealt with in legal terms - this judge is a stickler for legality....
Expert:  mmdesq replied 1 year ago.

As possed in your original question, writ of attachment must be considered unliquidated until acid attached is sold. In addition, I believe a valid argument would be that the writ of attachment is void as a preference. This would then leave the debt as liquidated but unsecured.

Customer: replied 1 year ago.
to understand your point, a writ of attachment is not considered liquid until assets are sold. In other words, even though there is a "pre-judgement" amount that the assets were attached to/for/because of, that amount should be ignored and instead the value of the assets should be considered as the "face value" of the writ in terms of bankruptcy? Is there a bankruptcy reference I could cite for this? This would be very helpful because the face value of the assets do not bump me over the secured amount limit in Chap. 13 Also, even though your last point helps me with the secured amount, I am already at my limit for unsecured debt, so if the writ pushes me over that limit I won't be confirmed...however, any reference that the writ can only be considered the amount of the assets would be very helpful...
Expert:  mmdesq replied 1 year ago.

A writ of judgment wold be unsecured. A writ of attachment is the value of whatever it is attached to. I would love to quote you a Bankruptcy Code section but there is not one to deal specifically with the writ of attachment. It deals with the concept of secured vs. Unsecured and liquidated vs unliquidated and provides definitions for those terms. By its very definition a writ of attachment is attached to a particular asset and therefore has to be the value of that asset. There is a downside that in the event the asset is insufficient to satisfy the underlying claim that claim could still exist after the liquidation of the attached asset. This is the problem that you referenced regarding unsecured debt they could exist based upon the claim after the asset is sold. Right now with that being unsold you can argue you don't know if that would be a security claim or an unsecured claim until that occurs as the exact amount of unsecured vs secured debt is unliquidated (cannot be determined)

Customer: replied 1 year ago.
I had a bad day in court, with the judge denying my motion to abstain from the lien, even saying that he is considering dismissing my bankruptcy case, so I can "duke it out" in state court - something that I just can't do - I am now insolvent!!! This is why I needed a powerful cite - I still have another chance to convince him, because my confirmation is on Nov. 10 - but I have to really make a good case - I want to stay in Chap. 13 - I filed just to avoid the attachment writ, not to have all my assets sold!!! That's a killer!!! The judge seems to think I don't qualify for Chap. 13, but I make all the limits and I have a steady income - it's this "lien" that he is stuck on. He called it a lien, but it's not!!!The following is what I found as a relevant cite. It is an appellate decision after the BAP ruled that a trustee can use an attachment lien as a claim - the appellate court understood their reasoning but reversed their ruling. I picked out some choice references, but it's good reading about liens. They clearly side with me here; however I would like to find the code that state the California law says that a writ of attachment is not enforceable by a creditor until a judgement has been obtained - I haven't been able to get that yet. Maybe you could help?IN RE:  SOUTHERN CALIFORNIA PLASTICS, INC., Debtor. Lawrence A. Diamant, Chapter 7 Trustee, Appellant, v. Vartan Kasparian, Appellee.
No. 97-55874. Decided: January 20, 1999
Unlike the holder of a security interest, however, the attachment creditor has no right to proceed against the property until after the creditor obtains a judgment.   See Arcturus Mfg. Corp. v. Superior Court, 223 Cal.App.2d 187, 35 Cal. Rptr. 502, 505 (1964).  “The attaching creditor obtains only a potential right or a contingent lien,” Puissegur v. Yarbrough, 29 Cal.2d 409, 175 P.2d 830, 831 (1946), which is perfected or converted to a judgment lien upon judgment for the creditor, Arcturus, 35 Cal.Rptr. at 505;  cf.  Cal. Prob.Code § 9304 (describing the procedure for converting an attachment lien into a judgment lien in the context of a probate action).   The priority of the judgment lien relates back to the date of the attachment lien.   Thus, an attachment lien acts as a placemarker, ensuring the creditor's spot in the priority line until the creditor can obtain judgment.The procedure for allowance of a claim, however, is similar but not identical to that for obtaining a judgment.   In the allowance process, the validity and legality of claims are determined by applicable nonbankruptcy law.   See e.g., Christison v. Norm Ross Co. (In re Eastview Estates II ), 713 F.2d 443, 447 (9th Cir.1983).   A claim cannot be allowed if it is unenforceable under nonbankruptcy law.   See 11 U.S.C. § 502(b)(1).But it is axiomatic that, even in the bankruptcy context, state law governs the validity and extent of liens.   Moreover, the Bankruptcy Code intends to preserve, to the extent possible, the state law rights possessed by parties outside of the bankruptcy context.   See HAL, Inc. v. United States (In re Hal, Inc.), 122 F.3d 851, 852 (9th Cir.1997).   Permitting an allowance of claim to substitute for a judgment perfecting an attachment lien undermines the rights and protections created by the California Legislature.   We therefore reverse the BAP.
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

I am a different contributor as your previous expert has opted out.

In California, a writ of attachment lien is not perfected until a judgment has been entered. Bankruptcy Code Section 362 (a)(4) prevents any act to create, perfect, or enforce a lien against property of the estate once a petition has been filed. The CA courts hold, Under California law, certain creditors may obtain a prejudgment writ of attachment against property of the debtor by establishing the probable validity of their claims.   See Cal.Civ.Proc.Code §§ 484.090, 485.220, 486.020.   An attachment lien is created when the creditor files a notice of attachment or otherwise levies on the property.   See Cal.Civ.Proc.Code § 488.500(a).   This lien has priority over subsequent liens.   See Cal.Civ.Proc.Code § 488.500(b).   Unlike the holder of a security interest, however, the attachment creditor has no right to proceed against the property until after the creditor obtains a judgment.   See Arcturus Mfg. Corp. v. Superior Court, 223 Cal.App.2d 187, 35 Cal. Rptr. 502, 505 (1964).  “The attaching creditor obtains only a potential right or a contingent lien,” Puissegur v. Yarbrough, 29 Cal.2d 409, 175 P.2d 830, 831 (1946), which is perfected or converted to a judgment lien upon judgment for the creditor, Arcturus, 35 Cal.Rptr. at 505;  cf.  Cal. Prob.Code § 9304 (describing the procedure for converting an attachment lien into a judgment lien in the context of a probate action).   The priority of the judgment lien relates back to the date of the attachment lien.   Thus, an attachment lien acts as a place marker, ensuring the creditor's spot in the priority line until the creditor can obtain judgment. See: In Re: Southern California Plastics, Inc., Debtor. Lawrence A. Diamant, Chapter 7 Trustee v. Vartan Kasparian, 165 F.3d 1243 (9th Cir. 1999).

Customer: replied 1 year ago.
Hi,
I appreciate your answer as it was what I had hoped to get earlier. One follow up however - I am a sole proprietor who is trying to get confirmation in Chap. 13 in California. The judge, inexplicably, seems dead set against this - and is using the attachment writ "lien" as cover - however, I think there must be more to the story - but I'm at a loss to understand why. I am insolvent because of the writ, my business can't pay creditors because of the writ, the writ will be removed through the bankruptcy action - and yet the judge seems pre-disposed, and is much more comfortable with either Chap. 11 or 7, which are neither in my or my creditors best interests - Chap. 11 is inappropriate and costly and Chap. 7 will be a fire sale. I am trying to establish a credible legal basis which not only discredits the writ as a "secured lien", but also proves that Chap. 13 is best for my creditors because the removal of the writ with my assets (buildable real estate lots) intact is by far the best method to pay them back, since I am a spec builder and was attempting to pay them back when the writ came down. It almost seems that the judge feels I am "manipulating" the system to remove the writ, but so what? The attachment writ was put on through similar manipulation. The question: Is there a case where either a Chap. 13 was allowed confirmation with pending litigation (without an attachment writ) or Chap. 13 was confirmed with an attached writ? That would be extremely helpful and I would be happy to end our current back and forth...
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

The attachment writ for pre judgment attachment is a lien, but it is not a perfected lien as you can see above. Since it is not a perfected lien, it is not enforceable according to what the court state as you see above as well.

The cases above were allowed to proceed despite the attachment lien and BK was confirmed even prior to perfection of the attachment lien

Customer: replied 1 year ago.
Nothing slightly more recent (post 2005)? - 1946 and 1964 just don't seem to carry as much weight (although good years)....
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your reply.

Those are the seminal cases, it has nothing to do with age, it has to do with all of the newer cases all cite to those cases. I do not know who told you older cases do not carry weight, but we still cite Marbury v. Madison and International Shoe v. Washington and those cases date to the early 1800 and early 1900 and the key is that as long as they are prevailing law.

If you would like to go to your court library where you can get free access to westlaw (which we have to pay for as attorneys in our offices at a rate of $150 or more an hour) you can go pull up 2010 and younger cases all citing to the same cases you were provided if that would make you feel better, but it is not necessary when the cases you are citing are the main cases everyone refers back to.

Customer: replied 1 year ago.
ok - I guess the "elephant in the room" in this case is what to do with the "potential" lien - and maybe this is what the judge is struggling with - the point being that the lawsuit might result in a claim - so if he confirms my bankruptcy now - with this outstanding lawsuit with a writ attached to it (meaning there is a good probability the other side will win something) hanging over my head - how does he deal with that claim for the potential creditor? If I could make this easier for him, maybe I can get confirmation. I am currently past my 6 month window for confirmation, so I must get confirmed or my case will be dismissed - I can't wait for the result of the lawsuit. HOWEVER, and this was a big shock to me - the judge wants to try the case, which had been scheduled for a major jury trial with extensive financial exhibits - and then determine the extent of the lien. This won't happen for at least two months though, well after my confirmation hearing. The problem is confirmation - I want to be confirmed in 13 now (Nov. 10 is the hearing date). I have about $900k of secured "cap room" - but the writ is for $1.095k, which would bump me over - so technically it's possible (although VERY unlikely) that the claim would result in over $900k - I think this is what the judge is having heartburn over...
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your reply.

The potential lien has to sit until they perfect it. The court cannot really deal with it until it is perfected in a CH 13. That is why the judge is acting so frustrated. So if he confirms bankruptcy now, he has to come back and modify it later if they perfect the writ of attachment. So the writ can actually put you into CH 7 is likely what the judge is thinking here. You have to use the case law above to argue that the lien is not a lien yet as it is not perfected and as there is no judgment confirming it, so you ask the court to ignore it because no judgment has been entered, which the cases indicate.