## Facts

- A creditor obtained a state-court judgment for unpaid professional services owed by the debtor.
- After judgment, the state court issued a writ of attachment that created a judicial lien on the debtor’s logging equipment and on real property in Newport, New Hampshire.
- The writ of attachment was issued January 18, 2007, and recorded January 19, 2007; the lien amount was $43,723.14.
- The debtor owned a 50% interest in the real property; the remaining 50% was owned by the debtor’s mother.
- The debtor filed a Chapter 13 petition on April 5, 2007—76 days after the attachment was recorded.
- The debtor and the Chapter 13 trustee filed an adversary proceeding and moved for summary judgment to avoid the judicial lien as a preferential transfer under 11 U.S.C. § 547(b).

## Issues

1. Whether recording the post-judgment attachment was a “transfer of an interest of the debtor in property” to or for the benefit of a creditor under 11 U.S.C. § 547(b).
2. Whether the transfer was “for or on account of an antecedent debt” owed before the transfer.
3. Whether the debtor was insolvent at the time of the transfer, including the effect of the § 547(f) presumption of insolvency within 90 days before filing.
4. Whether the transfer occurred within the 90-day look-back period under § 547(b)(4)(A).
5. Whether the lien enabled the creditor to receive more than it would have received in a hypothetical Chapter 7 liquidation if the transfer had not occurred.
6. Whether summary judgment was proper because there was no genuine dispute of material fact as to the § 547(b) elements.

## Decision

- The court granted the debtor’s and trustee’s motion for summary judgment.
- The court held that the recording of the writ of attachment constituted a transfer creating a judicial lien for the benefit of a creditor.
- The court found the lien secured an antecedent debt and was recorded within 90 days of the bankruptcy filing.
- The court applied the § 547(f) presumption of insolvency and found the creditor did not rebut it with evidence.
- The court concluded the lien improved the creditor’s position compared to a hypothetical Chapter 7 distribution, satisfying § 547(b)(5).
- The judicial lien was avoided as a preferential transfer under § 547(b).

## Legal Principles

- A judicial lien created or perfected by recording a post-judgment attachment can constitute a “transfer” of an interest of the debtor in property for purposes of 11 U.S.C. § 547(b).
- A transfer that secures payment of a preexisting obligation is “for or on account of an antecedent debt” under § 547(b)(2).
- Under 11 U.S.C. § 547(f), the debtor is presumed insolvent during the 90 days preceding the petition date; the creditor bears the burden of producing evidence sufficient to rebut the presumption.
- A lien that elevates a creditor from unsecured to secured status may satisfy § 547(b)(5) when it enables the creditor to recover more than it would as a general unsecured creditor in a hypothetical Chapter 7 liquidation.
- Summary judgment is appropriate in an avoidance action when material facts relevant to the § 547(b) elements are undisputed and the movant is entitled to judgment as a matter of law.

## Conclusion

The court avoided the creditor’s judicial lien as a preference because the undisputed record showed that recording the attachment within 90 days of the Chapter 13 filing secured an antecedent debt while the debtor was presumed insolvent and materially improved the creditor’s recovery relative to a Chapter 7 liquidation.


In re Pysz, No. 07-10705-MWV, Adv. No. 08-1013-MWV, 2008 WL 2001753 (Bankr. D.N.H. May 7, 2008)