What is the name of your state? California, I am a creditor faced with a Chapter 7
I was scammed by a contractor and received a summary judgment for $110,000 and filed a lien for that amount on the debtor's house held in joint tenancy with his wife. He took out a $420,000 mortgage--finalized the day after the judgement was filed. He then filed BK within 6 months of taking out that mortgage. There is nothing but the mortgage and my lien on the house, but $420,000 is very close to the value of the house. I understand this "strips" my lien but I also read that liens can survive a Chap 7. I can begin adversary proceedings because there is $130,000 cash from the mortgage and he told the trustee that he gave away $30,000 to "cousins" and "spent" the remainder (within a few months). He is also dramatically under reporting his income which I can prove with my cancelled checks if given the chance. (The trustee only allowed questions about his assets at the hearing). I would prefer to allow the discharge of the judgement and keep the lien than start up another expensive lawsuit. My intent had always been to just wait until they activated the lien (they are young and I am patient). I saw a BK attorney yesterday but she did not inspire confidence...although she was sure that a discharge of the judgement wouldn't remove the lien she was unsure if the lien was valid without equity. This does not seem like a complicated issue but most of what I read about lien stripping applies to Chap 13s. So my question is:
Can my lien survive a Chap 7 if the equity has been removed from the house within 6 months of filing BK?
I was scammed by a contractor and received a summary judgment for $110,000 and filed a lien for that amount on the debtor's house held in joint tenancy with his wife. He took out a $420,000 mortgage--finalized the day after the judgement was filed. He then filed BK within 6 months of taking out that mortgage. There is nothing but the mortgage and my lien on the house, but $420,000 is very close to the value of the house. I understand this "strips" my lien but I also read that liens can survive a Chap 7. I can begin adversary proceedings because there is $130,000 cash from the mortgage and he told the trustee that he gave away $30,000 to "cousins" and "spent" the remainder (within a few months). He is also dramatically under reporting his income which I can prove with my cancelled checks if given the chance. (The trustee only allowed questions about his assets at the hearing). I would prefer to allow the discharge of the judgement and keep the lien than start up another expensive lawsuit. My intent had always been to just wait until they activated the lien (they are young and I am patient). I saw a BK attorney yesterday but she did not inspire confidence...although she was sure that a discharge of the judgement wouldn't remove the lien she was unsure if the lien was valid without equity. This does not seem like a complicated issue but most of what I read about lien stripping applies to Chap 13s. So my question is:
Can my lien survive a Chap 7 if the equity has been removed from the house within 6 months of filing BK?