mechanics lein dischargeable in bankrupcy the last 6 or 7 years

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Request for Question Clarification by serenata-ga on 30 Apr 2003 17:02 PDT

Hello JB ~

The quick answer is "yes" - some mechanics liens can be discharged in
bankruptcy, some not, depending on:

1. What state you are talking about;
2. The entity filing bankruptcy;
3. Whether or not the lien was recorded;
4. Whether or not the lien was perfected;
5. The type of bankruptcy (ie., Chapter 7, 13, if personal)
6. Whether or not a claim (secured or unsecured) was filed in the
Bankruptcy Court.

Any further information you might supply could help in answering the
question; but a reminder that Google Answers Researchers do not give
legal advice, and please read the disclaimer at the bottom of this
page, "Answers and comments provided on Google Answers are general
information, and are not intended to substitute for informed
professional medical, psychiatric, psychological, tax, legal,
investment, accounting, or other professional advice."

Mechanics liens and bankruptcy is a very tricky area of law, and there
is no substitute for getting good legal advice from an attorney
familiar with those areas.

Regards,
Serenata

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Clarification of Question by jb3825-ga on 01 May 2003 06:20 PDT

California,
Indivual
Yes lien was recorded.
abstract of judgement recorded 4/25/2003 Bankrupcy discharged 03/04/2002
Chapter 7
The Mechanics lien was recorded 1/19/2000
a adversay claim was recorded in bankrupcy

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Request for Question Clarification by serenata-ga on 01 May 2003 06:57 PDT

Hello again, JB ...

Am I to understand that the lien was also discharged in bankruptcy?

I ask because of the dates listed:
    The discharge was 3/4/2002

but you waited for over a year til 4/25/2003 to file your Abstract of
Judgment.

From the answers you gave, it appears you didn't follow through in a
timely manner on your lien filings (the bankruptcy stay stayed your
running time to file suit on your recorded lien), and therefore the
lien was discharged?

Thanks again,
Serenata

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Clarification of Question by jb3825-ga on 01 May 2003 09:07 PDT

The debt against me was discharger in bankrupcy but the mechanics lien
stayed alive because the lien is against the property not the owner,
but it is my understand that in california a mechanics lien goes
forward after the ninety day stay. Apparently I think the attorney who
filed the abstract of judgement
failed to file the abstract in a timely matter.

Hello again, Jb ...

The answer to your question is still "yes" a Mechanic's lien is
dischargeable in bankruptcy, but as you also know, timing is
everything here, and the important dates are:

1. Date of filing the lien
2. Date of filing the lawsuit (must be within 90 days of filing the
lien)
3. Date of filing the bankruptcy
4. Date of discharge in bankruptcy

The fact that there is an Abstract of Judgment means that at some time
a foreclosure was filed and granted which is why those dates are
critical.

I am reluctant to answer this for you with a definite "yes" or "no",
because I don't want to steer you wrong. Google Answers Researchers do
not give legal advice and you should pay attention to the disclaimer
on the page.

It is true that the bankruptcy stayed the time, but didn't necessarily
wipe the lien against the property - but it depends on the timing,
which is critical.

I'll point you to an article by Maita Prout in HKlaw.com Publications,
dated October, 2001, entitled "Mechanic's Lien Provides Opportunity
for Payment"

  - http://www.hklaw.com/Publications/OtherPublication.asp?ArticlesID=1216

Pay attention to the content regarding California law, Mechanic's
Liens and Bankruptcy, particularly this paragraph:

"The drafters of the Bankruptcy Code were aware of the dilemma, and
although the code does not allow a foreclosure suit to be filed, it
nevertheless addresses the problem. ...  if the time to file a
foreclosure action on a mechanic's lien has not expired at the time
the bankruptcy is filed, the running of the filing period is suspended
while the automatic stay is in effect. This results in an extension of
time to file a foreclosure action beyond the usual deadline. The
automatic stay may be in effect for only weeks, or may be in effect
for months, or even years. In any case. the running of the filing
period is temporarily halted as long as the property remains protected
by the stay. Once the automatic stay is no longer in effect, the
filing period begins to run anew, and the lien claimant is free to
commence a foreclosure action."


I have found a procedural chart for Mechanic's Liens in California,
which you can view here and compare to your own critical dates:
 - http://www.bachmanlaw.com/chart.htm


You can use this chart to count the days, bearing in mind the dates
from filing the bankruptcy until the discharge do not count, the
bankruptcy in effect putting everything on hold.

If it appears that something was not done in a timely manner, the lien
is invalid, and you can have it removed.

Having said that here in my recommendation:

Take your information and seek competent legal help from an attorney
who specializes in lien law. The small amount of time it will take for
that attorney to scrutinize the matter is well worth the cost of
consulting him or her, especially if the lien is found to be invalid.
Then, invalid or not, request a letter (you want this in writing) from
that attorney explaining whether or not the lien is valid and why. (In
other words, don't just walk out with a handshake and his verbal
instructions, you paid for the visit, get it in writing).

You can better decide at that point how to proceed to clear the lien.

Search terms used -
 - California lien law
 - California mechanic's liens
 - mechanic's liens + bankruptcy

Thanks for being patient and providing the clarifications. And
hopefully this will work out for you.

Regards,
Serenata