How does bankruptcy affect a mechanic's lien??? - Posted by Lyal

Posted by JT-IN on February 24, 2003 at 16:43:26:


I haven’t run up against this specific situation, but my gut says just as the Atty has stated, that you should be able to get beyond the ML.

Of course if I were in this situation, I would be getting it in writing from my title Atty, who also puts in his opinion that he guarentees this opinion to be accurte to me… which makes him culpable, if he is wrong… That is what I pay him for, IMHO.

Wish the best,


How does bankruptcy affect a mechanic’s lien??? - Posted by Lyal

Posted by Lyal on February 22, 2003 at 21:17:19:

I’m looking at a property that went to sheriff’s sale last 9/11 (yup really…) with a 1 year redemption period. It has a mortgage of about 25K, a mechanic’s lien of 70K and a marital lien of 18K against it. My entry would be to get the redemption rights of the marital lien holder assigned to me via quit claim deed for a nominal sum (former husband is amenable). I’ll run title to make sure there are no other surprises…
The mechanic’s lien should fall off soon (per state statute; if the lienholder doesn’t foreclose within a year the mech lien is void)leaving only the mortgage and a TON of equity. The kicker is that the guy who filed the mech lien filed bankruptcy. My attorney thinks that the bankruptcy would freeze the lien and obviate the 12 month limit (there was also a comment about the bankruptee being required to name the former homeowner(also former girlfriend…can this get any more convoluted??) as a creditor. I can redeem the marital lien within 7 days after the 1 yr redemption period and I obviously want to be sure the mechanic’s lien is void. (FMV of the property is 135K.)
Opinions or comments please??
Thanks, Lyal

mechanic’s lien??? - Posted by JT-IN

Posted by JT-IN on February 24, 2003 at 14:47:58:


I have an opinion here, but that really doesn’t matter at this point. If I rendered my opinion, would you act upon that advice…?

What you need is a Title Company to render specific, gurarenteed advice about these circumstances, and if they are wrong, then you would have recourse against them. There is just too much at stake if you were to rely anyones opinion in a public forum such as this.

Just the way that I view things…


Re: mechanic’s lien??? - Posted by Lyal

Posted by Lyal on February 24, 2003 at 15:02:09:

Thanks! I was hoping you’d chime in. Not looking for a definitive opinion, maybe just anecdotal to see if anyone had run up against this before. I sat down with my attorney this am. He had consulted with another attorney in the office (his son B-) and is of the opinion that it’s not a problem and is going to follow up with an opinion from another attorney outside the office.
As to title ins on this, I don’t see how I could get that. Not offered in any form for redeeming a prop that I know of. That said, if / when I do this, I’ll only have a few bucks at risk for title opinion, quit claim deed etc. If it doesn’t work out I’ll just go away. If it does, I’ll redeem, refinance and get title ins then. The aforementioned attorney is at the title co and I’m sure they’ll write it. May need to escrow some funds for a while but that’s ok.
All the best, Lyal