Mechanics lien

[Lajazz947]

I am in court with my contractor.

Long story-short:

He says I owe money
I do
I attempted to mitigate due to faulty workmanship
I attempted to settle
He ignored
He filed a Mechanics's lien
I sued him
We are going to court soon

My attorney says not to settle. Good idea as it raises my indebtedness on the house.

Is a ML judgement discharged in a BK?

Thanks

[Flamingo]

I'm laughing because when I pulled up your post to view I got ads relating to Mechanics Liens - the ads state "filing a Mechanic's Lien makes you a secured creditor" and "Mechanics Liens - Not Getting Paid? We can Help! Don't Wait, protect your money now!"

I would check with your BK attorney if a ML is obtained by the contractor.

[Lajazz947]

Thanks, he is checking into that.

I think that he will be a secured creditor.

Funny thing, his attorney sent me a letter telling me that if I did not pay he would have the court sell my house to pay his client.

I guess he forgot something about the rights that I have in court, the judgement that he needs to get and the fact that he has to prove that I owe the money.

He figured that maybe I would just write a check because I was scared.

Sounds like a collection agency attorney doesn't it?

Also, the work was done without a work change order so if I really had wanted to screw him I could have just refused to pay on that technicality alone and he might have lost.

Thanks again.

[Flamingo]

It's always a mess, isn't it? Don't jump to conclusions right now - the lien is not yet obtained. Worry about it after the fact if they actually do get it.

[fltoo]

So many variables with a ML.

Is it a trust fund claim also?
Has it been recorded?

They are also very state specific when attached to your house.
This is definitely one for your lawyer who should be knowledgeable in his state law regarding real estate.

[Lajazz947]

No trust fund claim.

I am not sure if recorded but it has been filed so I assume it has.

I am in California.

I think I am going to win anyway, he had no clue how prepared I was when he started discovery and now I have asked him for things I KNOW he does not have.

He should have taken my offer.

[JRScott]

I found this:

http://www.allbusiness.com/accounting/3486786-1.html

Bankruptcy notes on page 6 or 7, might be more later on. Not sure it will help but maybe

[Lajazz947]

Cool. It always impresses me when a total stranger (although we all have allot in common here) goes out of their way to help someone.

Thanks for the link. Every bit of information is helpful if for no other reason than to know what questions to ask.

[JRScott]

You're welcome

[HHM]

Mechanics liens are fairly automatic, once filed, they are in place. So, to answer your question, the ML is NOT discharged, it survives a BK like any other lien.

However, the underlying debt can be discharged. So, you have a couple options.

1. Fight the mechanics lien and get it removed in court, if you are successful in getting it removed, AND file BK, you will not owe this contractor any money.

2. Let the ML stand, and file BK. The underlying debt gets discharged, but the lien is still valid and will have to be dealt with when you sell your house, or otherwise dispose of the property.

What you will need to ask an attorney is whether ML's can be foreclosed in your state.

Keep in mind, when it comes to discovery, a valid reason not to turn something over is that the person does not have it. Just because you ask for something in discovery does not mean the other party must turn it over, they can object to discovery requests, etc. So, just be prepared for the fact that the court is generally lenient when it comes to discovery and the burden in on YOU to demonstrate that what you are asking for is actually relevant to your defense or claims.

[Lajazz947]

Mechanics liens are fairly automatic, once filed, they are in place. So, to answer your question, the ML is NOT discharged, it survives a BK like any other lien.

However, the underlying debt can be discharged. So, you have a couple options.

1. Fight the mechanics lien and get it removed in court, if you are successful in getting it removed, AND file BK, you will not owe this contractor any money.

2. Let the ML stand, and file BK. The underlying debt gets discharged, but the lien is still valid and will have to be dealt with when you sell your house, or otherwise dispose of the property.

What you will need to ask an attorney is whether ML's can be foreclosed in your state.

Keep in mind, when it comes to discovery, a valid reason not to turn something over is that the person does not have it. Just because you ask for something in discovery does not mean the other party must turn it over, they can object to discovery requests, etc. So, just be prepared for the fact that the court is generally lenient when it comes to discovery and the burden in on YOU to demonstrate that what you are asking for is actually relevant to your defense or claims.

Great response, thank you.

Yes, you are right about discovery. I asked for items that my attorney and i deemed very relevant.

His attorney asked me for lots of irrelevant items like " what kind of drivers license do I have", "what's the highest educational level that I achieved" as well as a host of others.

We objected to most of his requests and fulfilled the rest.

The main issue here in discovery is that he does not think that I actually paid to fix his errors and to do the work that he says he did.

I have receipts and checks for all of it.

I asked him for HIS receipts and checks paid to subs for the work he claims he did.

THAT I know he does not have so he will be out of luck in those areas.

A ML can be foreclosed in California but not just with a threatening letter from some attorney.

Thanks again.