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Can a Judicial or Statutory Lien Attach to Post-Petition Appreciation in Real Property on which the Lien has Attached?
Published: 2004 | Author: William J. Tucker

This paper discusses under what circumstances a judicial or statutory lien can attach to post-petition appreciation in real property on which the lien has attached. 

 

A valid judicial line may or may not survive a bankruptcy.  Problems may arise when the lien survives the bankruptcy, where at the time of the petition the debtor enjoyed no equity in the property, but after the entry of discharge equity was created either by the debtor paying off his mortgage, or through post-discharge appreciation of that property.  Therefore, “an argument can be made that this post-discharge increase in the value of property is subject to the lien if the judgment passed through the bankruptcy unaffected.”  18 Miss. C.L. Rev. 497, 507.  The judicial line, thus, could “come back to haunt the debtor” post-discharge unless the lien is dealt with during the bankruptcy proceeding.  Id. 

 

The paper further discusses what constitutes a judicial and statutory lien, the nuances of “lien stripping,” and lien avoidance under § 522(f) of the bankruptcy code.



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