Nice Analysis of Non-Dischargeability Judgment Liens from David Lally

Hello. This concerns a dischargeabilty judgment.  First, it is a federal judgment, and second, a dischargeability judgment.  So, there are several issues that arise.

1.    Under 9th Circuit law, if a debt is not discharged, it is never discharged.  In re Moncur (9th Cir. BAP 2005)  Pursuant to the doctrines of claim and issue preclusion, a debt which is excepted from discharge in a Chapter 7 case does not become dischargeable in a second Chapter 7 case if the creditor fails to file a second dischargeability action.  Once not discharged, forever not discharged.  Citing In re Paine 283 B.R. 33 (9th Cir. BAP 2002).   So, the personal liability under the judgment is never discharged so it cannot expire.

Next, there is a Federal Statute, 28 USC Section 3201 “Judgment Liens,” which says the judgment is good for 20 years.  See below:   (c) Duration of Lien; Renewal.— (1)Except as provided in paragraph (2), a lien created under subsection (a) is effective, unless satisfied, for a period of 20 years. (2) Such lien may be renewed for one additional period of 20 years upon filing a notice of renewal in the same manner as the judgment is filed and shall relate back to the date the judgment is filed if— (A) the notice of renewal is filed before the expiration of the 20-year period to prevent the expiration of the lien; and (B) the court approves the renewal of such lien under this paragraph.   However, to me that Statute applies for a regular, district court judgment, not a dischargeability judgment.

2.  If you record the dischargeability judgment and obtain an abstract of judgment, and 20 years later the abstract expires under 28 USC 3201, the judgment becomes unsecured, however you can record it again since the judgment itself never expires.

3.  A very good and practical approach; err on the side of caution and record the crap out of the judgment 🙂

4.  Another good approach is to look at FRCP 69 (FRBP 7069) regarding execution of judgment.  There, look to the law of the state in which the District Court is located.  So, in Cal, you would need to renew every 10 years (both judgment and lien, if there is one).

Again, thank you all for your input. —     David Brian Lally, Esq.

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