Expired ‘Secret Lien’ Survives Bankruptcy: 9th Circuit

A statutory lien attaching to the personal property of someone who has a judgment against her won’t automatically expire while the automatic stay created by a bankruptcy filing is in force, the U.S. Court of Appeals for the Ninth Circuit ruled in a split decision.

In California, service of a court-issued Order for Appearance and Examination (ORAP) requiring a judgment debtor to appear for an examination for the purpose of locating assets triggers a one-year “ORAP lien” on the debtor’s personal property..

If the judgment debtor subsequently files bankruptcy, that ORAP lien is tolled and doesn’t expire after one year, ...