Expert: Doctor Settlement - 7/7/2006

Question
My insurance company put a lein on a person's house for car accident i was in and he had no insurance...  so he was sued for damages, doctors and hospital bills..  he then filed bankruptcy and a lein was put on his house..  this has been almost 10 years ago..  if the house is never sold, how is the money collected?  is a statute of limitations for this lein?

Answer
Dear Michele,

It is difficult to piece together what the scenario is here.  My best guess from what you said is as follows.  There are two choices, and I think the first one is more likely, but I will give you both and let you decide.

FIRST SCENARIO: NO PRESENT LIEN EXISTS

Your insurance company obtained a court judgement on this tortfeasor.  The judgement is a lien on his property.  

Unless he was committing a crime during the accident (i.e. DUI) that particular judgement should have been discharged in bankruptcy.

That is, the bankruptcy court dissolved the power of the judgement and held it to be of no legal effect whatsoever.

Thus, there can be no lien from a judgement that has been discharged in bankruptcy.

SECOND SCENARIO: A PRESENT LIEN DOES EXIST

In this scenario, the lien will continue to exist becauase the tortfeasor was DUI (or doing some other crime) at the time of the accident, and hence the bankruptcy court will NOT discharge that debt or judgement he owes.  Thus, it remains alive today.

Your question is how long will the lien be effective.  Usually judgements have a life of ten years, BUT THEY CAN BE RENEWED BY APPLICATION TO THE COURT.  So it is likely the insurance company could make application to the court and get another 10 years life on their judgement.

By the way, the judgement ought to be accumulating interest at the statutory rate.

I trust this satisfies your curiousity.

Best Wishes,

Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com