Are property liens automatically discharged in bankruptcy?

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Are property liens automatically discharged in bankruptcy?

I have a judgement against the debtor and eventually placed a property lien on his primary residence. The debtor has listed my debt as “damages”. Is this an improper listing of this debt? This judgement was for a security deposit that was owed on a property of his that I rented about 3 years ago. I just want to be sure that he does not get away with not having to pay back money that was not legally his, considering that a security deposit is supposed to held in an escrow capacity.

Asked on September 7, 2011 under Bankruptcy Law, California

Answers:

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 10 years ago | Contributor

How he describes your debt is irrelevant.  The debt will be discharged in his case (assuming he receives a discharge), but your lien--if it was properly perfected under state law--will remain against his residence unless and until he files a motion with the bankruptcy court to remove it (which can be done after his bankruptcy case is closed).   The way he can remove the lien is if it is "impairing" an exemption to which he would otherwise be entitled.  In other words, if there is little or no equity above your lien, then it can probably be removed, but he will have to take the steps to do so.

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/

bankruptcy blog: http://bklaw.com/bankruptcy-blog/

Follow Me on Twitter:  @bklawr

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 10 years ago | Contributor

How he describes your debt is irrelevant.  The debt will be discharged in his case (assuming he receives a discharge), but your lien--if it was properly perfected under state law--will remain against his residence unless and until he files a motion with the bankruptcy court to remove it (which can be done after his bankruptcy case is closed).   The way he can remove the lien is if it is "impairing" an exemption to which he would otherwise be entitled.  In other words, if there is little or no equity above your lien, then it can probably be removed, but he will have to take the steps to do so.

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/

bankruptcy blog: http://bklaw.com/bankruptcy-blog/

Follow Me on Twitter:  @bklawr


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