Legal Question in Bankruptcy in California
Voluntary lein and Homestead exemption
I have filed for bankruptcy. My bankrupt Attorney (for Chapter7) advised I could place a voluntary lein on my home to secure my father's loans to me, for which we had a verbal agreement. He told me that the lien might be removed by the trustee but the Homestead exemption would stay.
The trustee indicted the lien was fradulent and was going to have it removed and void my homested exemption. I wanted to remove the lein since it was applied on advise of the attorney. He advised not to as it would anger the Trustee who could then have the homestead exemption voided any way. I followed my Attorney's advise and now the the Trustee has filed suit against my father for fradulently placing a lien on the house. The trustee is aware that I acted on advise from the attorney.
Is the above in accordance with bankruptcy laws?
My attorney doesn't know. Since my Attorney is responsible for my predicment can my father be held accountable for the misinformation the attorney gave me?
If procedures are being violated I will then seek a new attorney. Any guidance will be appreciated.
Either the homestead excemption or my fathers lien would prevent sale of the house.
1 Answer from Attorneys
Re: Voluntary lein and Homestead exemption
Well, I don't see what your homestead exemption has to do with the liens. The creation of a security interest to a family member within one year prior to filing bankruptcy is avoidable as a preference under 11 USC 547 and if your attorney doesn't know something as basic as that, he shouldn't be practicing bankruptcy law. However, your homestead exemption is statutory and you don't need to do anything to get it, so I'm not sure why the Trustee is seeking to avoid it. Do you mean he's objecting to the amount you claimed for it on your schedules? WIthout seeing your bankruptcy papers I couldn't really address that issue.
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