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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 39180
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I have a final judgement awarding me, The Defendant, as

Resolved Question:

I have a final judgement awarding me,

"The Defendant, as a matter of equity, is entitled to be paid the original sum bearing 11% interest from date of final judgement, which was solely used for the plaintiff to purchase homestead property."

I do not have access to pacer. Do you have any suggestions on proving this creates a Purcahse Money Mortgage.
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 8 years ago.

The language of the judgment demonstrates the existence of what is known as an "equitable lien." Equitable liens are generally considered secured, because they are intended to provide some measure of restittuion to a lender for the deceitful conduct of a borrower. As suct, the lien would be considered secured, and thus not subject to discharge in bankruptcy.


However, equitable liens are rare (in contrast to "constructive trusts" which accomplish the same goal, but attach directly to a unique misappropriated property), and they are given different treatment by various state and bankruptcy court jurisdictions. This places you somewhat in an uncertain state. However, if you can prove that the underlying actions of the judgment debtor were fraudulent, then it doesn't matter what your right to repayment is called, because it will be nondischargeable under Bankr. Code Sec. 523(a)(2).


That said, I would spend some time researching the U.S. Circuit Court and State court decisions in your jurisdiction to see exactly what sort of treatment is accorded an equitable lien. Because if you can show that your state law would treat an equitable lien as secured, then you don't have to prove fraud, because you have a secured interest, and you can request a lift of the automatic stay and then begin foreclosure proceedings.


Hope this helps.


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