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Judgement entry for a personal lien

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    #1

    Judgement entry for a personal lien

    Just talked to one of my mortgage lenders. Another one of those high pressure calls that in the end I'm not sure if it was idol threats or something to be concerned about. The bank that holds my line of credit secured by my rental property is going to file a "judgement entry for a personal lien" the end of this month. I guess they have figured out that at least $65,000 of their mortgage loan is unsecured since the line of credit was based on my net worth at the time instead of the property value. She is claiming this will survive bankruptcy.

    What? Is there something I'm missing? Unsecured debts or judgement liens are discharged the same as any unsecured portion of a mortgage, correct?

    Is this a quick way for them to try and get at my bank acct?
    Tags: None
    #2
    I don't know the details-but if there is a lien, the BK doesn't cancel it even though it discharges the debt. Your attorney will know what to do-basically voiding the lien is an additional thing to be done in the BK process. (Voiding may not be the right word...)
    Most of my information is from personal experience or HOURS and HOURS of online research. When you're searching online, keep in mind there is no guarantee that the info is completely up to date, and your situation is unique from anyone else's. Do your homework, and consult with an attorney so you can make an informed decision.

    Comment

      #3
      If the paperwork on your rental property does not have a mortgage SHOWING a lien against it by this creditor THEN they have an UNSECURED LIEN...... which in turn would be discharged.

      If they have a valid lien, Yes then this is secured lien

      Also for a judgement they have to file, appear in court, etc....

      If you file before they get the judgement - their lien is NO GOOD.....
      Minny

      "It's amazing the paths that our feet sometimes follow in life".

      My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.

      Comment

        #4
        Originally posted by Minnymouth
        If the paperwork on your rental property does not have a mortgage SHOWING a lien against it by this creditor THEN they have an UNSECURED LIEN...... which in turn would be discharged.

        If they have a valid lien, Yes then this is secured lien

        Also for a judgement they have to file, appear in court, etc....

        If you file before they get the judgement - their lien is NO GOOD.....

        This is a secured line of credit with my rental property as collateral. It is set up as a typical 2nd mort on a home. The complication is the home was never even close to having enough equity to secure this loan. The loan value was based on my net worth as of 2000, not the property value. Now they realize they are going to be stuck. The people calling me are not the ones that wrote the line of credit. I don't think they realized until just resently that most of this loan is unsecured. I assume that's why they are going to pursue this "personal lien", which supposably survives Bk. Whatever it is my atty's will draw it out on them until it's too late to get it to stick.

        Comment

          #5
          I have an answer from my atty on this. He doesn't have the paperwork on my line of credit yet but he believes there is a clause in the agreement that allows them to secure a cognovit judgement lien against me personally. This lien would attach to any and all real property that I presently own. After 90 days of them receiving this lien, it will not be able to be removed since it will then be a secured lien against all real property that I owned at the time of their filing - the debt would not be discharged through bankruptcy. The good news is as long as I file within that 90 days, it will be removed. Now I'm pretty much forced into bk within the next several months unless I want to eventually give them all of my home equity also.

          Damn them!

          Comment

            #6
            Originally posted by JimH
            I have an answer from my atty on this. He doesn't have the paperwork on my line of credit yet but he believes there is a clause in the agreement that allows them to secure a cognovit judgement lien against me personally. This lien would attach to any and all real property that I presently own. After 90 days of them receiving this lien, it will not be able to be removed since it will then be a secured lien against all real property that I owned at the time of their filing - the debt would not be discharged through bankruptcy. The good news is as long as I file within that 90 days, it will be removed. Now I'm pretty much forced into bk within the next several months unless I want to eventually give them all of my home equity also.

            Damn them!
            Definitely keep us informed on what happens with this. I've never heard of anything like this.

            Can any creditor do something like this to us? For example, could a credit card which I owe $11,000 do this to me? Or does it depend on the wording the loan agreement you signed?

            Would it only become a lien against property which you currently own, or could it be attached to property that you acquired in the future through something like inheritance?
            The world's simplest C & D Letter:
            "I demand that you cease and desist from any communication with me."
            Notice that I never actually mention or acknowledge the debt in my letter.

            Comment

              #7
              i was told by an attorney that they must be filed with the state correctly in some fashion to be able to put a valid lien on things.

              not sure if it turns out to be the same thing. but look at this site, search for 'lien' and also post the question. he is good.

              http://www.mcfarlinlaw.com/phpbb/viewtopic.php?t=16&sid=29cdf073a9bc06173ac54a3ba6e8fc80
              Im not an attorney or a trustee. You cant trust me either though!

              [x] - Done with 341? Join the 60 Day Club! ___________[x] - Im Discharged! Whoo Hooo!
              [x] - Poll: Should I File Pro-Se ____________________[x] - New BK Law: Median Income, Means Testing and Presumptive Abuse
              [x] - Zombie Debt Collectors Dig Up Your Old Mistakes _-[x] - Bankruptcy Law Resource
              [x] - Need A Fast Answer? Available 24/7!--__________[x] - Dont Be A Hero On Your Budget - You Wont Get An Award!

              Comment

                #8
                Keep in mind that what I have is a line of credit for a business. This was not set up as a consumer lending instrument so their are clauses in it that would not be able to be used for home mortgages, personal cc's, etc. You won't see anything "cognovit" in a personal loan. They are very common with business credit. In a very basic definition, if I go into default, they can go to court without informing me and plead "guilty" on my behalf. Since it is a business loan, I do not have the same rights that consumers have. This is not covered under the consumer protection laws. I did know all this going into the deal since I have a degree in business finance. I just didn't realize it would attach to any and all real estate and be a secured lien after 90 days.

                Here is a definition for everyone. These are signed as part of the loan documents - they skew the law in favor of the lender.

                COGNOVIT - A written confession of an action by a defendant, subscribed but not sealed, and authorizing the plaintiff to sign judgment and issue execution, usually for a sum named.

                Comment

                  #9
                  pok, so what did your attorney tell you about this. let us know after it gets worked out. i would also seek other counsel. someone that can handle business loans in bk.
                  Im not an attorney or a trustee. You cant trust me either though!

                  [x] - Done with 341? Join the 60 Day Club! ___________[x] - Im Discharged! Whoo Hooo!
                  [x] - Poll: Should I File Pro-Se ____________________[x] - New BK Law: Median Income, Means Testing and Presumptive Abuse
                  [x] - Zombie Debt Collectors Dig Up Your Old Mistakes _-[x] - Bankruptcy Law Resource
                  [x] - Need A Fast Answer? Available 24/7!--__________[x] - Dont Be A Hero On Your Budget - You Wont Get An Award!

                  Comment

                    #10
                    Originally posted by bkfiler
                    pok, so what did your attorney tell you about this. let us know after it gets worked out. i would also seek other counsel. someone that can handle business loans in bk.
                    The meeting I had with the atty's the other day was to discuss how a personal bk would affect my business. One was an atty that specializes in corp ownership / bylaw issues. The other specializes in corporate debtor / creditor relationships. He represents national banks although he is able to advice me on my issues since I do not have any debt instruments with the banks that have him on retainer. He is the one handling this particular issue and I am glad to have him on my side. Neither one is going to handle the bk for me - they are only advising me on the corp issues at hand. Someone else at the firm will be handling my personal bk once a couple of corp issues are addressed. I haven't talked with the bk atty as of yet.
                    Last edited by JimH; 01-10-2006, 12:37 AM.

                    Comment

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