After BK buying a home

[wayout]

Hello, from what I gather if you have equity in your home creditors can put liens on it till it's sold ( when I decide to sell ) in a BK settlement.
After BK is settled with all the creditors liens in place, can I rent the house and move on to an Apt, buy a newer car etc?
Or can a creditor still see me getting on with a savings acct...ask a court to go after my new found wealth instead of waiting for the house to be sold to collect?

[keepmine]

The bk code allows unsecured creditor leins to be stripped if, it impairs an exemption you're entitled to take.
Once your bk is discharged and closed, you may manage your finances anyway you please.

[wayout]

'The bk code allows unsecured creditor leins to be stripped if, it impairs an exemption you're entitled to take.'
Could you explain.

[keepmine]

Here's the applicable section of the bk code.

http://doney.net/bkcode/11usc0522.htm

or 501(a) of the Internal Revenue Code of 1986.

(e) A waiver of an exemption executed in favor of a creditor that holds an unsecured claim against the debtor is unenforceable in a case under this title with respect to such claim against property that the debtor may exempt under subsection (b) of this section. A waiver by the debtor of a power under subsection (f) or (h) of this section to avoid a transfer, under subsection (g) or (i) of this section to exempt property, or under subsection (i) of this section to recover property or to preserve a transfer, is unenforceable in a case under this title.

(f)

(1) Notwithstanding any waiver of exemptions but subject to paragraph (3), the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is--

(A) a judicial lien, other than a judicial lien that secures a debt of a kind that is specified in section 523(a)(5); or

(B) a nonpossessory, nonpurchase-money security interest in any--

(i) household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments, or jewelry that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor;

(ii) implements, professional books, or tools, of the trade of the debtor or the trade of a dependent of the debtor; or

(iii) professionally prescribed health aids for the debtor or a dependent of the debtor.

(2)

(A) For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of--

(i) the lien;

(ii) all other liens on the property; and

(iii) the amount of the exemption that the debtor could claim if there were no liens on the property;

exceeds the value that the debtor's interest in the property would have in the absence of any liens.

(B) In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph (A) with respect to other liens.

[wayout]

So whatever I end up with after bankruptcy is my business? Even if I win the lottery the next day?
Any liens on my house get paid off to the creditors only when I sell it, right?

[mlsj2009]

In my understanding, this section of the code would apply only in a Chapter 13 where a second mortgage has been stripped, would it not?
The lien passes through the bankruptcy except when it has been stripped in a Chapter 13, but wayout seems to b asking about a secured lien that has survived a bankruptcy. In that case, the loan amount has been discharged but the lien holder can still foreclose on the property. He cannot come after the mortgage borrower or any of his assets for the deficiency or full amount before the house sells or after. As long as the bankruptcy filer has his or her name on the title of the property, I would think they can rent out the property for as long as they desire until foreclosed on. The mortgage lender can not come after the rent proceeds without violating the discharge of the bankruptcy.

Here's the applicable section of the bk code.

http://doney.net/bkcode/11usc0522.htm

or 501(a) of the Internal Revenue Code of 1986.

(e) A waiver of an exemption executed in favor of a creditor that holds an unsecured claim against the debtor is unenforceable in a case under this title with respect to such claim against property that the debtor may exempt under subsection (b) of this section. A waiver by the debtor of a power under subsection (f) or (h) of this section to avoid a transfer, under subsection (g) or (i) of this section to exempt property, or under subsection (i) of this section to recover property or to preserve a transfer, is unenforceable in a case under this title.

(f)

(1) Notwithstanding any waiver of exemptions but subject to paragraph (3), the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is--

(A) a judicial lien, other than a judicial lien that secures a debt of a kind that is specified in section 523(a)(5); or

(B) a nonpossessory, nonpurchase-money security interest in any--

(i) household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments, or jewelry that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor;

(ii) implements, professional books, or tools, of the trade of the debtor or the trade of a dependent of the debtor; or

(iii) professionally prescribed health aids for the debtor or a dependent of the debtor.

(2)

(A) For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of--

(i) the lien;

(ii) all other liens on the property; and

(iii) the amount of the exemption that the debtor could claim if there were no liens on the property;

exceeds the value that the debtor's interest in the property would have in the absence of any liens.

(B) In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph (A) with respect to other liens.

This response is not intended to be legal advice, just comments made for clarification and guessing.

[keepmine]

I'm not sure what the OP is asking or has done.
All I'm saying is, if an unsecured creditor sues him and wins and then files a lein against his home, that lein can be avoided in a bk filing if it impairs and exemption he'd be entitled to take. I misspoke. Should have used the term avoidence-not lein strip.

[wayout]

Thank you for your answers. Once these liens are finalized onto the property where the creditors would have to wait for me to sell the house to get paid, example: 150,000-75,000 CT homestead= 75,000 for the unsecured lien holders) can I rent it out?

[wayout]

Anyway I found that it's ok to do what ever I want after BK 7. But If I bought a lottery ticket before the BK and then won after the BK the trustee can take whatever's owned. Like having a pregnant prize race horse before BK then....

[ValleYum]

No, you could not rent the house because in order for you to get your 75k exemption paid to you, the house will have to be sold by the trustee through a realtor that he employs for this task.

Any creditors that have placed a judgment/unsecured lien on your house within a time period specified by the Bankruptcy Code would have their lien 'avoided' by the trustee - this means cancelled or voided. If you have a mortgage or secured lien, they would have to be paid in full in order to get clear title to your home.

The realtor would sell the house; then:
1. Any mortgage or secured lien(s) would be paid.
2. You would get the exempt amount you are entitled to.
3. The trustee would pay the realtor their fees.
4. The trustee would take his fees.
5. Your creditors who file a claim within the time frame set by BK law will receive a determined portion of the remaining money and that is all they will get and they can't ever come after you to get any money that they are not paid because the permanent discharge injunction of your bankruptcy does not allow it.

This is the simplification of the Bk law the other forum members posted above as I understand them but only your lawyer can tell you for sure -- hopefully if I have made an error someone will be along to correct me.

[wayout]

I'm not planing to sell it. I'm planing to rent it. Keeping the 75,000 in limbo till whenever.

[ValleYum]

Then you won't have 75k in cash until you do sell your home and I am 99% sure you won't be able to file a Chapter 7 bankruptcy without selling it either because the trustee would almost certainly sell it.

I also think that a judgment creditor can actually force the sale of your home once they have a lien in place in CT - they may be likely to do so since you said you own home free and clear. Check with an attorney to be sure.

[wayout]

Oh I thought they couldn't force you out of your primary residence for unsecured debt. I was wrong.

[mlsj2009]

I think I see where this is going, but still learning what "wayout" is really wanting to know.
I didn't see where he said he owned the house outright but it seems that way now.
I thought he said he had filed bankruptcy and the house survived with $75,000 exemption equity and he wants to now rent the house out. He seems to be asking if the unsecured debtors who had placed a lien on the property prior to bankruptcy could prevent him from renting the house out.
I am not an attorney and I hope an attorney jumps right in to answer these concerns, but my understanding is that if the debts by the unsecured lien holders was discharged in the bankruptcy, he can go back and have the judgment removed from their original court. To me, that can effectively void the liens on the property, but even if the liens somehow survive, I wouldn't think the lien holders could continue collection activities by foreclosing on the property. Don't really know, but I would like to. Attorneys?

I also think that a judgment creditor can actually force the sale of your home once they have a lien in place in CT - they may be likely to do so since you said you own home free and clear. Check with an attorney to be sure.

[mlsj2009]

Probably other clarifications are needed on this thread if others are as confused as I was when the thread first started, so here are some questions for "Wayout?"
1. Did you file bankruptcy after unsecured creditors got judgments against you and placed a lien on your house?
2. What kind of bankruptcy did you file and is it now closed?
3. Do you really own the house outright or is their a primary mortgage on the home remaining?
4. If you filed a Chapter 7 with more than $75000 exemption equity left in the home, why didn't the trustee not liquidate the house?
5. Did you file pro se if you have filed bankruptcy at all?
6. What did you mean by stating "creditors can put liens on it till it's sold ( when I decide to sell ) in a BK settlement, in a BK Settlement? What was settled?

Des? You out there somewhere?