Judgement creditor obtained an arbitration award which was subsequently turned into a judgement, which was then turned into a lien. Creditor is now trying to force sale of my home to collect judgement.
Creditors used fraudulent documents (forged signatures, switched attachments to emails) to obtain award. The fraudulent paperwork is obvious once legitimate paperwork is shown side by side--also have a sworn affidavit from signatory attesting that signature is not theirs.
Will I be able to make a motion based on Equitable Subordination to relegate judgement creditors claims to the "bottom of the barrel"? Or would it not apply in this instance?
Sadly, long past statue of limitations date to appeal arbitration, but hopeful bankruptcy court, as one of equity, may look at the fraudulent docs.
The problem is the judgment. Your situation would be a stretch of the "equitable subordination" doctrine. But to know, we would need more context about the creditor and debtors in this situation. If this situation is just a run of the mill creditor that obtained a judgment in due course of collecting a debt, ES wouldn't normally apply. The problem I think you have is that the fraud was something that "could have" been found out and raised at the time of the underlying case. You are going to run into judicial estoppel. Which basically means, you had your chance and you blew it. Bankruptcy court doesn't normally give either a debtor or creditor another bite at the apple for the "underlying merits" case. You would need something more than the fraud. When you read the cases on ES, the main issue is whether the creditors action harmed the interest of other creditors.
If you are going to raise the issue, you will need some case law "on point" to the circumstances here.
Here is an ABA article on the topic.
http://www.americanbar.org/content/dam/aba/publications/rpte_ereport/2010/february/rp_murray.authcheckdam.pdf
Attorney Berkus has done a great job talking about the equitable subordination doctrine, which, as he indicates, is probably not a great argument for you given the facts you indicate here. I'd just point out, though, that the bankruptcy code has some "tools" for avoiding liens such as this one. Whether or not you can avoid this lien on those theories depends on some facts that you haven't mentioned here, such as the value of your house and the exemptions that you have available. It would be a very good idea to consult with a local bankruptcy attorney to get an idea of those options.
andra A Kuhn Esq.Chapter 7 Bankruptcy AttorneyConcord, NH ·
I agree with the other answers. You will have huge hurdles trying to undo the judgment. But you may be able to avoid it if it impairs your homestead exemption. It would be a good idea to talk to experienced local counsel as to whether bankruptcy is for you and whether you can void the lien.
