Ask Bankruptcy Attorney in Sacramento, Stockton, Fairfield, CA – Does Judgment Lien Recorded before Filing Bankruptcy Attach to Real Estate or Property Purchased by Debtor after Bankruptcy Discharge?

Here are the Facts:

Debtor's creditor filed a lawsuit for unpaid credit card debts, received a default judgment, and recorded a judgment lien (aka judicial lien) in the county of Debtor's residence.  Debtor does not own a house or any real estate.  Debtor filed for Bankruptcy and received a discharge.  The credit card debt underlying the judgment lien is discharge.  After receiving the Bankruptcy Discharge, Debtor purchased a house.

Issue:  Does the Judgment Lien recorded prior to bankruptcy filing (aka pre-petition) attach to real estate purchased after filing?

The answer is no because according to bankruptcy law, the judgment has been discharged before a valid judgment lien could be created. A lien cannot exist in the absence of the attachable property. Thus, no judgment lien could have been created post-discharge even though Debtors bought a house because the underlying judgment was previously discharged and rendered void.  The Sacramento Bankruptcy Court applied 11 U.S.C. § 524(a)(1) to arrive at this conclusion in In re Thomas & Blades, 102 B.R. 199 (1989).

However, if the fact changed where the Debtor did not file for Bankruptcy and purchased a house in the same county that and after the judgment lien was recorded, the judgment lien would attached to the house.  Under California law, when the abstract of judgment is recorded with a county recorder it creates a lien on all of the judgment debtor's real estate in that county as well as real estate acquire after the judgment lien was recorded and in the same county of the recording.  C.C.P § 697.310(a).

For more information on how Chapter 7 or 13 Bankruptcy can remove and eliminate judgment lien (aka judicial lien), schedule a consultation with Muoi Chea, experienced Bankruptcy Attorney serving Sacramento, Stockton, Fairfield, CA and surrounding cities in Northern and Central California.