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It is very important that you obtain legal advice from an experienced attorney regarding your particular situation. Consultation before you take action will certainly cost you less than it will cost to fix your unintentional errors.


Click on each question and it will expand to show the answer.

Obtain a copy of the debtor’s bankruptcy schedules or check with the clerk’s office to verify that your name and debt has been listed to ensure receipt of notices. This should be done at the Bankruptcy Court where the case was filed. A creditor should review the schedules filed by the debtor, noting whether the creditor’s claim (what is owing to the creditor) was properly designated as secured or unsecured and listed in the accurate amount. It should also be noted whether the debtor disputes the claim or lists it as unliquidated or contingent. Any errors can be rectified by filing a proof of claim, if a claim was not listed on the debtor’s schedules, the creditor must file a proof of claim by the court deadline or the claim will be disallowed and the creditor will not receive any monies if there is to be a distribution of funds.

Section 342 requires that all creditors receive notice of the bankruptcy in order for the full restraining action of the automatic stay to become effective. The debtor is to list all addresses provided by the creditor within the 90 days before the bankruptcy was filed, and/or any other address used by the creditor in another bankruptcy. Section 342(c) Again, this is new law and I would not advise the creditor to ignore any notice, written or otherwise. Once the creditor receives notice of the bankruptcy they must cease all attempts to contact the debtor or seize property, without obtain permission from the bankruptcy Court. There are monetary penalty for ignoring this prohibition. Section 343(g) and 362(k).

  • File a proof of claim. It is the creditor’s proof of claim that will govern unless specifically objected to by the debtor.
  • In a Chapter 7 no-asset case, proofs of claim need not be filed. There will not be any distribution of funds to any unsecured creditors. A no-asset is a case where all the assets of the Debtor were protected by law (exempt property). The majority of all chapter 7 cases involving individuals are no-asset cases.
  • In all other Chapter 7 cases and Chapter 13 cases, a creditor must always file a proof of claim to participate in any distribution.
  • In a Chapter 11 case a proof of claim is not required if the claim is accurately listed in the schedules and is not scheduled as disputed, contingent or unliquidated.

If a creditor wants its collateral out of the bankruptcy completely a Motion for Relief from the Automatic Stay should be filed early in the case, forcing the debtor to deal with the problem head on. Normally a hearing is scheduled in approximately 30 days on “lift stay” motions. Without an Order lifting the stay the creditor is prohibited from completing their trustee’s sale or foreclosure.

  • (1) Residential real property or personal property: Chapter 7 – The debtor/trustee has 60 days from filing the bankruptcy to either accept or reject the lease. If the lease is accepted then rents must be brought current. Section 365(p(2) If the lease is not accepted within within the 60 days then it is automatically deemed rejected. Unfortunately, despite the fact that the lease has expired the landlord still cannot take any action against the debtor or his personal property without filing a motion for relief. Therefore, it is wise in a lease to file a motion for relief immediately upon the debtor filing their bankruptcy. Chapter 11, 12 or 13 – trustee/debtor may assume or reject lease at any time before the confirmation of the Plan Section 365(d)(2) and 365(p)(3)
  • (2) Non-residential real property – trustee must assume within 120 days of the filing of the bankruptcy or order confirming Plan, court can extend for additional 90 days. Section 365(d)(4). See 503(b)(5) previously assume lease, then rejected – possible administrative claim.

Section 362(b)(22) indicates that there is no automatic stay, so long as the landlord obtained a judgment for possession of residential property prior to the filing of the bankruptcy.
Section 362(c)(3)(A) indicates that the automatic stay may terminate 30 days after filing the bankruptcy with respect to any lease, if that debtor had a prior bankruptcy (7, 1 or 13) pending in the last 12 months.
Section 362(c)(4)(A)(i) No automatic stay if debtor filed two or more cases in last 12 months.
Beware – this is new law and may “bite the landlord in the a_ _”. Until the law is settled I highly recommend obtaining a comfort order as described in 362(j).

The landlord may not use the filing of a bankruptcy as grounds for terminating a least 365(e)(1)
Trustee may assign the lease, despite non-assignment clauses Section 365(f).

The 2005 changes to the Bankruptcy Code greatly favor anyone owed child support or alimony/maintenance (called “domestic support obligations” or “DSO”). There is no automatic stay on the collection of any DSOs from property that is not property of the estate 362(b)(2)(B). Also, the legislative history of the new law and Section Section 522(c)(1) makes it clear that all property owned by the debtor can be liquidated to pay DSO debt. The Bankruptcy Trustee even has obligations to the DSO claimant. Section 704(c).

When a bankruptcy is filed a federal restraining order called the automatic stay immediately stops any trustee sales, foreclosures, garnishments, lawsuits or repossessions against the debtor and the debtor’s property by any creditor, collection agency, or government entity. It is contempt of this federal restraining order to attempt to collect money, evict the tenant, garnish wages or complete a trustee’s sale, foreclosure or repossession without first obtaining permission from the bankruptcy court. This permission is called an Order for relief from the automatic stay. Contempt of the automatic stay can be punishable by a very large fine.

A Motion for Relief from the automatic stay or a “stay order” is obtained by first filing a Motion, Notice and Certificate of mailing with the court and noticing the proper parties. The Debtor has an opportunity to file a response. If a response is filed a hearing will be held. If no response is filed an Order, Certificate of No Objection must be filed with the Court. The Court will most likely sign the Order. Once the signed order is received the creditor is free to proceed with the action that they requested in the Motion and that was granted in the Order.

Carefully check all of the loan and security documents to ensure that they are complete and that all necessary steps have been taken to perfect liens on any collateral securing the obligation. This step is extremely important and will determine the strength of a secured creditor’s position in the case. Section 506 describes how the value of a secured claim is determined. Although curing deficiencies post-petition may be a violation of the automatic stay, nevertheless it is essential to be aware of any problems. Section 547(c)(3) & (e) gives the secured creditor no more than 30 days after the debtor receives possession of property or transfer is made to perfect the creditor’s lien.

Shortly after a bankruptcy is filed, creditors will receive notice of an initial meeting of creditors (Section 341, Meeting of Creditors) to be held at the Office of the United States Trustee. You may attend the Section 341, Meeting of Creditors, but are not required. This meeting provides the creditor a opportunity to ask the debtor a few questions regarding its claim, its collateral, other claims against the debtor, the debtor’s plans for its bankruptcy case and any other aspects of its financial affairs. This is not an opportunity to interrogate the Debtor. This is a good time to reveal to the Trustee (the person conducting the meeting) any inconsistencies the creditor has discovered in the schedules. Make sure to be able to support any statements. Either the creditor or its counsel can attend the meeting.

You can ask the debtor questions at the creditors meeting (see above), or Bankruptcy Rule 2004 permits a creditor to take the deposition of the debtor and inquire into all aspects of its financial affairs. The scope of the examination is broad and should be taken advantage of to obtain information.

Look for a basis to object to the discharge of a particular debt under Sections 523 or 727. Creditors have only 60 days from the date of the initial meeting of creditors to file suit to declare their debts non-dischargeable on the basis of a false financial statement. It is very difficult for a creditor to win a non-dischargeable case and normally the creditor will not receive its attorney’s fees/costs for bringing the action.

After a bankruptcy is filed, but before the discharge is entered, the secured creditor, or landlord, could request the debtor sign a new contract “reaffirmation agreement”. This new contract has the exact terms as the original, Section 524(c) and (k) delineates several documents, disclosures and procedures that must be followed by the creditor in obtaining this new contract. It must be approved by the Court in order to be binding on the debtor. It is most likely no debtor’s attorney will sign the reaffirmation agreement because 524(k)(5)(B) requires that the debtor’s attorney certify that the debtor will be able to make the payments. This is not only ludicrous, but how could anyone certified anyone’s ability to pay a future debt. This is also new law and few, if any, creditors will be able to follow the complicated procedures.

Below is a link to a video of Bankruptcy Judge Eileen W. Hollowell, filmed explaining the reaffirmation process.



25-211 – Liability of community property and separate property for community and separate debts

Landlord and Tenant

Obligations and Liabilities of Landlord

  • 33-301 – Posting of lien law and rates by innkeepers
  • 33-302 – Maintenance of fireproof safe by innkeeper for deposit of valuables by guests; limitations on liability of innkeeper for loss of property of guests
  • 33-303 – Discrimination by landlord or lessor against tenant with children prohibited; classification; exceptions

Article 2 Obligations and Liabilities of Tenant

  • 33-321 -Maintenance of premises
  • 33-322 – Damage to premises; classification
  • 33-323 – Liability of person in possession of land for rent due thereon
  • 33-324– Denial of landlord’s title by lessee in possession prohibited

Article 3 Termination of Tenancies

  • 33-341 – Termination of tenancies
  • 33-342 – Effect of lessee holding over
  • 33-343 – Premises rendered untenantable without fault of lessee; nonliability of tenant for rent; right to quit premises

Article 4  Remedies of Landlord

  • 33-361 – Violation of lease by tenant; right of landlord to reenter; summary action for recovery of premises; appeal; lien for unpaid rent; enforcement; notice and pleading requirements
  • 33-362 – Landlord’s lien for rent

Article 5 Applicability of Chapter

33-401 – Formal requirements of conveyance; writing; subscription; delivery; acknowledgment; defects
33-402 – Forms for conveyances; quit claim; conveyance; warranty; mortgage
33-405 – Beneficiary deeds; recording; definitions

Article 2 – Foreclosure
33-721 – Foreclosure of mortgage by court action
33-722 – Election between action on debt or to foreclose
33-723 – Right of junior lien holder upon foreclosure action by senior lien holder
33-724 – State as party to foreclosure actions
33-725 – Judgment of foreclosure; contents; sale of property; resale
33-726 – Redemption of property by payment to officer directed under foreclosure judgment to sell the property
33-727 – Sale under execution; deficiency; order of liens; writ of possession
33-728 – Recording upon record that mortgage is foreclosed and judgment satisfied; effect
33-729 – Purchase money mortgage; limitation on liability
33-730 – Limitation on deficiency judgment on mortgage or deed of trust as collateral for consumer goods

33-741 – Definitions
33-742 – Forfeiture of interest of purchaser in default under contract
33-743 – Notice of election to forfeit and reinstatement of purchaser’s interest
33-744 – Completion of forfeiture by judicial process
33-745 – Completion of forfeiture by notice
33-746 – Request for copy of notice of election to forfeit
33-747 – Appointment of successor account servicing agent
33-748 – Seller’s right to foreclose
33-749 – Other remedies
33-750 – Conveyance by seller; payment in full; payoff deed

33-807 – Sale of trust property; power of trustee; foreclosure of trust deed
33-808 – Notice of trustee’s sale
33-809 – Request for copies of notice of sale; mailing by trustee or beneficiary; disclosure of information regarding trustee sale
33-810 – Sale by public auction; postponement of sale
33-811 – Payment of bid; trustee’s deed
33-812 – Disposition of proceeds of sale
33-813 – Default in performance of contract secured; reinstatement; cancellation of recorded notice of sale
33-814 – Action to recover balance after sale or foreclosure on property under trust deed

Article 5 – Judgment Liens on Real Property
* (Homestead exception to lien enforcement (ARS 33-964(B)
Article 6 – Mechanics’ and Materialmen’s Liens
Article 7 – Personal Property Liens

* (Homestead exception to lien enforcement (ARS 33-964(B)

Article 2 – personal property exemptions

Arizona Residential Landlord and Tenant Act

Arizona Department of Housing 602-771-1000
will mail a copy to you at no charge

Article 1  General Provisions

  • 33-1571 – Real property loans; exercise of due on sale clauses; prohibition

The Garn St. Germaine Act at 12 USC 1701j-3(d), generally precludes a lender from exercising a due on sale clause when a borrower dies and someone else inherits (so long as mortgage payments remain current).


December 20, 2019 – Congress revived and extended an important protection for struggling homeowners: the QPRI exclusion. Now homeowners with a short sale or other modification for their home mortgage loan may be able to avoid tax liability on debt forgiven in tax years 2018, 2019, and 2020, despite receiving 1099s indicating the forgiven debt as income.

The QPRI Exclusion and the December 20, 2019, Congressional Action

When the principal amount of a homeowner’s mortgage debt is partially or fully forgiven through a short sale, loan modification or otherwise, the amount forgiven is included in a taxpayer’s gross income, triggering a potential hefty tax liability. The QPRI exclusion allows a taxpayer to exclude up to $2 million of the forgiven debt related to a decline in the value of the residence or to the financial condition of the taxpayer. See 26 U.S.C. § 108(a)(1)(E)as revived and extended by the Further Consolidated Appropriations Act of 2020, Public Law 116-94, div. Q, Taxpayer Certainty and Disaster Relief Act of 2019, tit. I, subtit. A, § 101 (116th Cong. Dec. 20, 2019), available at, which became law on December 20, 2019.

short sale

33-714. Expiration of mortgage and deed of trust; applicability

A. The lien of any mortgage or deed of trust on any real property that is not otherwise satisfied or discharged expires at the later of the following times:

1. If the final maturity date or the last date fixed for payment of the debt or performance of the obligation is ascertainable from the county recorder’s records, ten years after that date.

2. If the final maturity date or the last date fixed for payment of the debt or performance of the obligation is not ascertainable from the county recorder’s records or if there is no final maturity date or last date fixed for payment of the debt or performance of the obligation, fifty years after the date the mortgage or deed of trust was recorded.

3. If a notice of intent to preserve mortgage or deed of trust is recorded within the time prescribed in paragraph 1 or 2, ten years after the date the notice is recorded.



Arizona treats deeds of trust as conveying a lien, not as conveying title. See, e.g. Brant v. Hargrove, 129 Ariz. 475 (1981) (“Commonly referred to as the lien theory, this approach views a mortgage as not passing legal title, the right of possession, or the other incidents of ownership to the grantee-mortgagee.”). Under a title theory, the creditor is permitted to enter the land upon default, but in lien states, the creditor is required to foreclose in order to obtain a right of possession. In Arizona, creditors secured either by a mortgage or a deed of trust have no right of possession pre-foreclosure. See ARS 33-703.

A deed of trust conveys legal title in real property to a third party—the trustee—to secure the performance of a contract. A.R.S. §§ 33–801(8), –805; Snyder v. HSBC Bank, USA, N.A., 873 F.Supp.2d 1139, 1153 (D.Ariz.2012). The trustee holds legal title until the loan balance is paid or the security reclaimed. See A.R.S. § 33–801(8), (10); Hatch Cos. Contracting, Inc. v. Ariz. Bank, 170 Ariz. 553, 556, 826 P.2d 1179, 1182 (App.1991) (explaining “deed of trust ‘conveys’ the trust property to a trustee who holds the property for the benefit of the beneficiary designated in the deed of trust”). In the interim, the trustee holds only “bare legal title—sufficient only to permit him to convey the property at the out of court sale.” Eardley v. Greenberg, 164 Ariz. 261, 264, 792 P.2d 724, 727 (1990) (quoting Brant v. Hargrove, 129 Ariz. 475, 480 n. 6, 632 P.2d 978, 983 n. 6 (App.1981) (internal quotations omitted). A deed of trust is therefore “ ‘[i]n practical effect … little more than a mortgage with a power to convey upon default,” ’ id. (quoting In re Bisbee, 157 Ariz. 31, 34, 754 P.2d 1135, 1138 (1988)), and the two are treated similarly. See Brant, 129 Ariz. at 480, 632 P.2d at 983 (agreeing with reasoning in Hamel v. Gootkin, 20 Cal.Rptr. 372, 374 (App.1962), that it would be unrealistic to treat deeds of trust differently from mortgages, in determining whether a deed of trust defeated a joint tenancy, where the two “perform the same basic function”).

Although the beneficiary under a deed of trust, like a mortgagee, may have an interest in the property itself, the fact remains he has no interest in the title. See Saxman v. Christmann, 52 Ariz. 149, 154, 79 P.2d 520, 522 (1938). “Such encumbrancers cannot maintain an action to quiet title, for they have no title.” Id.; see also Berryhill v. Moore, 180 Ariz. 77, 88, 881 P.2d 1182, 1193 (App.1994) ( “[A] mortgagee’s interest does not attach to the title. Rather, it attaches to the land. Thus, under Arizona law, a mortgagee cannot bring an action to quiet title because the mortgagee has no title.”) (internal citations omitted).

Biel Properties, LLC v. CRG Partners, II, LLC (2015 WL 1605657) (April 9, 2015).

Pence v. Glaze, 1 CA-CV 02-0520, 1/29/04: A layman who files what may be an invalid deed of trust on a debtor’s residence because the deed of trust was not signed by the debtor’s spouse who jointly owned the residence cannot be liable for filing an invalid lien under ARS Section 33-420(a) unless the layman knows or has reason to know the deed is invalid. Such knowledge cannot be presumed on the theory that every person is presumed to know the law.

Does interest in property have priority over recorded judgment?

Cecelia M. and Randall Lewis v. Ann and Ray C. Debord October 6, 2014 – 2 CA-CV 2014-0004 –
Whether a judgment creditor may satisfy his or her judgment by executing on the judgment debtor’s real property that was transferred to a subsequent purchaser after recordation of the judgment pursuant to A.R.S. § 33-961(A) but before attachment of the information statement required under A.R.S. §§ 33-961(C) and 33-967(A). Here, the Debords acquired their interest in the property in July 2012.But the Lewises did not attach an information statement to their recorded judgment until August 2013. Because the Debords acquired their interest in the property before the Lewises complied with § 33-967(A), the Debords’ interest in the property has priority over the Lewises’ judgment lien.  Accordingly,the Lewises cannot satisfy their judgment by executing on the Debords’ property.  The trial court therefore did not err in granting summary judgment in favor of the Debords. See Ochser, 228 Ariz. 365, ¶ 11, 266 P.3d at 1065;Pi’Ikea, 234 Ariz. 284, n.7, 321 P.3d at 454 n.7

Pacific, et al. v. Castleton, et alDecember 27, 2018 – 1 CA-CV 17-0667 – Whether a judgment creditor may attach a judgment lien to homestead property, or whether it may execute on its judgment only by way of a forced sale of the property under Ariz. Rev. Stat. section 33-1105.


Section 33-964 thus establishes the general rule that a recorded judgment does not become a lien on homestead property. See also Union Oil Co. of Ariz. v. Norton Morgan Commercial Co., 23 Ariz. 236, 245 (1922) (holding that “no lien shall be permitted to attach to the real property claimed as a homestead”).

EXCESS EQUITY (consensual secured debts + homestead) IN HOMESTEAD CAN BE JUDICIALLY FORECLOSED UNDER § 33-1105

See In Evans v. Young, 135 Ariz. 447, 453 (App. 1983), and Grand Real Estate, Inc. v. Sirignano, 139 Ariz. 8, 13 (App. 1983); see also In re Rand, 400 B.R. 749 (Bankr. D. Ariz. 2008) (clarifying that a recorded judgment does not create a lien on property subject to homestead even when the value of the property exceeds the amount of the homestead. “It remains the case that both the homestead statute and the judgment lien statute both conceive of the ‘homestead’ as being the real property, not the equity value of such real property.” 400 B.R. at 754); and In re Glaze, 169 B.R. 956, 966 (Bankr. D. Ariz. 1994)


  • 33-964 establishes the general rule that a judgment lien does not attach to homestead property, and that homeowners hold their homestead property free and clear of judgment liens. See A.R.S. § 33-964(B). Although it is true that once a lien has attached, it “runs with the land,”, but in this case the judgment lien never attached to the Home in the first place.


  • When a homestead exemption is abandoned by a conveyance of the property, the judgment lien does not re-attach to the property upon the sale. See Sec. Tr. & Sav. Bank, 29 Ariz. 325, 332 (1925).
  • 33-1104(A)(3) a homeowner “may remove from the homestead for up to two years” without abandoning the homestead exemption. Sepics’ departure from the Home shortly before its sale did not constitute an abandonment.
  • Because of the protection afforded by the homestead statutes, the Judgment never attached as a lien to the Home. Therefore, the Sepics conveyed the Home free and clear of the Judgment.

CONCLUSION: For the foregoing reasons, we affirm the entry of an injunction enjoining a Sheriff’s sale of the Home.  Read opinion

Tax liensDaystar vs Maricopa County Treasurer (Az Ct App, Div One 5-6-04) good review of tax liens statutes and governing law.

Attorney General’s  re predatory lending and other scams.

10/2017 – Turtle Rock III Homeowners Assoc. v. Fisher (No. 1 CA-CV 16-0455) (October 26, 2017) opinion here.  The Arizona Court of Appeals held That homeowners associations (“HOAs”) must have a written, promulgated schedule of fines in order to impose them against members, and the HOA must be able to prove that the fines are reasonable.

In this case, the HOA sought to impose a $25 per day fine against a homeowner for violations of the CC&Rs. The HOA was successful in the trial court, but the homeowner appealed. The Court of Appeals reversed, finding for with the homeowner. “Without competent evidence of a fee schedule timely promulgated demonstrating the fine amounts and the appropriateness of such amounts, monetary penalties are per se unreasonable.” Even if a written fee schedule existed, however, the HOA still had the burden to prove the fines were reasonable. A.R.S. §33-1803(B)

CONCLUSION: HOA’s must have a written fine schedule for violations of CC&Rs and a basis to prove the fines are reasonable in order for them to be enforceable.

Equitable lien for community resources used to pay pre-marriage sole and separate debts: If community funds are used to pay on separate property, the spouse has a community property interest.  There is a formula in the decision.

Drahos v Rens (PR for Drahos), No. 2 CA-CIV 5501 (Ct App., AZ, Div 2, 12/13/83) In Arizona, property owned or acquired by either spouse prior to marriage is separate property and does not change its character after the marriage except by agreement or operation of law. A.R.S. § 25-213. Sellers v. Allstate Insurance Company, 113 Ariz. 419, 555 P.2d 1113 (1976); Kingsbery v. Kingsbery, 93 Ariz. 217, 379 P.2d 893 (1963). Therefore, a residence which is separate property does not change its character because it is used as a family home and mortgage payments are made from community funds. In re Estate of Sims, 13 Ariz. App. 215, 475 P.2d 505 (1970); Schock v. Schock, 11 Ariz. App. 53, 461 P.2d 697 (1969). Because Mr. Drahos acquired his residence before marriage and took title solely in his own name, the property clearly is, as the trial court recognized, his sole and separate property, even though the couple resided there and mortgage payments and repairs were allegedly made with community funds. The community, which contributed capital to the separate property, is nevertheless entitled to some form of compensation. Honnas v. Honnas, 133 Ariz. 39, 648 P.2d 1045 (1982); Lawson v. Ridgeway, 72 Ariz. 253, 233 P.2d 459 (1951); Hanrahan v. Sims, 20 Ariz. App. 313, 512 P.2d 617 (1973). The community has the right to an equitable lien against the separate property even though the character of that property has not changed. Stauss v. Stauss, 82 Ariz. *250 268, 312 P.2d 148 (1957); Lawson v. Ridgeway, supra; Potthoff v. Potthoff, 128 Ariz. 557, 627 P.2d 708 (App. 1981).

Decisions in this and other jurisdictions have disputed how to calculate the amount of the equitable lien. The Arizona Supreme Court has stated that when community funds are used to improve separate property, a value-at-dissolution formula which takes into account the enhanced value of the property should be utilized rather than an amount-spent formula, which is a simple reimbursement scheme. Honnas v. Honnas, supra; Lawson v. Ridgeway, supra. In this case it was only alleged that community funds were used to pay the mortgage and make repairs. There was no indication in the record that the increased value of the residence is in any way attributable to anything besides the general trend of rising real estate values. Therefore, we must determine whether the value-at-dissolution formula applies when community funds are used to benefit but not necessarily improve separate property. We believe that it should. The language in the Honnas decision is quite expansive.