Can Debtor Avoid Judgment Lien Existing Prior To Homestead Purchase?

A judgment lien automatically and immediately attaches to any real property the debtor owns in any county where the creditor records a certified copy of the lien. If a debtor owns investment property where a judgment lien is recorded the lien attaches to that property. If the debtor subsequently moves into the property as his primary residence the debtor cannot thereafter strip the judgment lien from what is now the debtor's homestead. A lien that has attached to property prior to that property becoming the debtor's homestead defeats the homestead exemption. A recent Florida bankruptcy case considered a different situation where a debtor acquired a property in a county where a judgment lien was previously recorded, and the debtor moved into the property at time of purchase.

The bankruptcy court held that the homestead exemption defeated the judgment lien in this case where the property was acquired simultaneous with occupancy. The court held that where the debtor's homestead rights and prior lien attach simultaneously, as where purchase and occupancy are essentially simultaneous, the priority is accorded to the claimant of the homestead right. Under these facts, the court permitted this debtor to avoid the judgment lien on the homestead. See: in Re:Perez Case No. 08-15023.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida