[WSBARP] effect of bkr discharge on judgment attaching to homestead

[Rod Harmon]

A $75,000 judgment is recorded and becomes a lien on the value of the
judgment debtor's homestead property in excess of the $125,000 homestead
exemption.  There are no other liens on the property.  Six months later, the
judgment debtor files a chapter 7 bankruptcy case and obtains a discharge.
What effect does the bkr discharge have on the judgment?  

 

As I understand it, the discharge eliminates unsecured debts, but not
secured debts.  So, the judgment is still owed and is a lien on the
homestead property, but can only be collected against the value in excess of
the homestead exemption.  But does the bkr discharge fix in time when that
excess is calculated?  Let's say that at the time the bkr case is filed the
homestead has a market value of $150,000.  But five years after the bkr
discharge, the judgment creditor has the sheriff levy on the homestead
property, which is now worth $250,000.   How much of the judgment can the
judgment creditor collect?  The $25,000 excess value at the time of bkr
filing?  Or up to the $125,000 excess value at the time of levy? Or is there
another possibility.  

 

I seem to recall a case somewhere, maybe a bkr case, that said that after
discharge the creditor could only collect the judgment up to the amount of
the excess value at the time of the bkr filing, but I can't locate it and am
not sure I remember it accurately.  I would very much appreciate anyone's
thoughts.

 

Rod Harmon

 

RODNEY T. HARMON

       Attorney at Law

         P.O. Box 1066

      Bothell, WA   98041

     Tel:   (425) 402-7800

     Fax:  (425) 458-9096

    www.rodharmon.com

   rodharmon at msn.com

 

 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20150602/525b13f4/attachment.html>