Expert: Mark J. Markus- California Bankruptcy Attorney - 4/14/2009

Question
A judgment levy was exercised on my corporate account and all funds were removed after a judgment was awarded.  The account is now frozen.  The amount of the judgment is beyond what I can pay.  I now can not operate my business.  If I file bankruptcy is there a chance to get that debt and lien discharged? What do I do in the mean time? If I open another account to pay employees, other expenses etc. will they go after that?

Answer
Your only bankruptcy option under the scenario you describe would be a Chapter 11 case.  You can discharge the debt assuming the plan you propose is confirmed and is fully performed.  Liens don't get discharged since a lien isn't a debt, but a securitization of assets.  The lien would only remain against whatever assets it attached to prior to the bankruptcy case being filed.  The underlying debt would need to be treated as a secured claim up to the portion of the value of the lien.

You should consult with a bankruptcy attorney in your area immediately to determine your best course of action.












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