In New Jersey, a trustee’s hypothetical judicial lien has priority over a judgment lien if the judgment lienholder has not made a levy on the property.
A deficiency judgment resulting from mortgage foreclosure is not ‘a judgment arising out of a mortgage foreclosure’ and can be avoided as a judgment lien.
The Eighth Circuit had held that a debtor has an ‘inchoate’ property interest in avoidance actions before bankruptcy, but Judge Collins ruled that a lender can’t have a lien.
The district court characterized the agreement not as creating a trust but as a device designed to win priority over a prior, perfected security interest.
Although a UCC lien on ‘accounts’ would attach outside of bankruptcy to proceeds from the sale of real property, Section 552(b) cuts off attachment if the sale occurs after filing
