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if a customer files bankruptcy,after a lien is filed, how far back can the bankruptcy courts go back to dispute the lien

Kentucky
Debbie Cobb
Credit Manager at M&M Service

I'm the contractor

1 reply

Attorney at Law Offices of Margie Lynn Loeser
| 10 reviews
May 26, 2023

It depends on the status of your lien and what they are disputing. 

A bankruptcy does not automatically void a mechanics lien, BUT, under K.R.S 376.090, a mechanic’s lien will dissolve and become unenforceable 12 months after the date the Lien Statement has been filed with the County Clerk, unless the lien holder has filed a lawsuit to enforce the lien within that time frame.

This is the most common problem in enforcement of a lien because the US Bankruptcy Code Section 362 provides for an automatic stay, that prohibits lawsuits against the debtor WITHOUT first obtaining permission from the Bankruptcy Court. So, to avoid losing the lien, the lien holder must act in Bankruptcy Court to obtain permission to file a lawsuit.

The issues involved in enforcing a mechanics liens in bankruptcy are complex. If you do not have legal representation in the bankruptcy, you should contact an attorney in your jurisdiction.

If you require legal assistance, please contact a lawyer in your jurisdiction for help. Do not act or refrain from acting based on what I write here. While I am
an attorney, licensed in Kentucky, nothing I write here is legal advice. Nor does any communication here form an attorney/client relationship betwSee More...
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