Key Takeaway
Bankruptcy discharge doesn't eliminate judgment liens on property - important considerations for personal injury attorneys and no-fault insurance practitioners.
This article is part of our ongoing no-fault coverage, with 271 published articles analyzing no-fault issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
I always joke around with my plaintiff friends that should you sue my clients, I will be the first person on the ECF system to file an appropriate bankruptcy petition. If you represent real people with real problems, you will have given some advise on how to protect them from unsecured judgment creditors. But, it is important to know that an unsecured judgment creditor can become a quasi -secured judgment creditor when that judgment lien attaches to real property your client owns. An 11 USC 522(f) motion needs to be made in bankruptcy court to void the lien. The failure to do this can spell grave disaster.
I mention this because I came across this interesting case. One of our local 7 trustees was involved in this litigation – probably too late, as you can see herein:
Nelson, L.P. v Jannace, 2011 NY Slip Op 06373 (2d Dep. 2011)
“ discharge in bankruptcy is a discharge from personal liability only and, without more, does not have any effect on a judgment lien” (Matter of Acquisitions Plus, LLC v Shapiro, 7 AD3d 957, 958; 11 USC § 524). Judgment liens and other secured interests ordinarily survive bankruptcy (see Carman v European Am. Bank & Trust Co., 78 NY2d 1066; McArdle v McGregor, 261 AD2d 591; Bank of N.Y. v Magri, 226 AD2d 412; see also Farrey v Sanderfoot, 500 US 291, 297). Moreover, a creditor need not object to the debtor’s discharge in bankruptcy in order to preserve its lien, since the discharge does not affect the lien (see Carman v European Am. Bank & Trust Co., 78 NY2d 1066; McArdle v McGregor, 261 AD2d 591).
When the defendants received discharges in bankruptcy, their personal liability to the plaintiff on the judgment was discharged (see 11 USC § 524 ). However, the defendants did not meet their burden of establishing that the liens on their real property were invalidated or surrendered in the bankruptcy proceedings or set aside in an action brought by the receiver or trustee.
Accordingly, they were entitled only to a qualified discharge (see Debtor and Creditor Law § 150; Carman v European Am. Bank & Trust Co., 78 NY2d 1066; Bank of N.Y. v Magri, 226 AD2d 412; Matter of Leonard v Brescia Lbr. Corp., 174 AD2d 621). “A qualified’ discharge, as distinguished from an unqualified discharge, serves as notice to third parties that, notwithstanding the debtor-owner’s discharge in bankruptcy, the property may, nonetheless, still be burdened by liens” (Carman v European Am. Bank & Trust Co., 78 NY2d at 1067).
Anyway the point is if you meander too far outside your comfort zone, be really careful where you step.
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Legal Update (February 2026): Since this 2011 post, federal bankruptcy laws and procedures may have been modified through legislative amendments, updated federal rules, or changes in trustee practices. Additionally, New York state judgment lien procedures and exemption statutes may have evolved, potentially affecting lien avoidance strategies under 11 USC § 522(f). Practitioners should verify current federal bankruptcy provisions and corresponding New York state law requirements when advising clients on judgment creditor protection strategies.
Legal Context
Why This Matters for Your Case
New York's no-fault insurance system, established under Insurance Law Article 51, is one of the most complex insurance frameworks in the country. Every motorist must carry Personal Injury Protection coverage that pays medical expenses and lost wages regardless of fault, up to $50,000 per person.
But insurers routinely deny valid claims using peer reviews, EUO scheduling tactics, fee schedule reductions, and coverage defenses. The Law Office of Jason Tenenbaum has handled over 100,000 no-fault cases since 2002 — from initial claim submissions through arbitration before the American Arbitration Association, trials in Civil Court and Supreme Court, and appeals to the Appellate Term and Appellate Division. Jason Tenenbaum is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.
His 2,353+ published legal articles on no-fault practice are cited by attorneys throughout New York. Whether you are dealing with a medical necessity denial, an EUO no-show defense, a fee schedule dispute, or a coverage question, this article provides the kind of detailed case-law analysis that helps practitioners and claimants understand exactly where the law stands.
About This Topic
New York No-Fault Insurance Law
New York's no-fault insurance system requires every driver to carry Personal Injury Protection (PIP) coverage that pays medical expenses and lost wages regardless of who caused the accident. But insurers routinely deny, delay, and underpay valid claims — using peer reviews, IME no-shows, and fee schedule defenses to avoid paying providers and injured claimants. Attorney Jason Tenenbaum has litigated thousands of no-fault arbitrations and court cases since 2002.
271 published articles in No-Fault
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Apr 24, 2019Common Questions
Frequently Asked Questions
What is New York's no-fault insurance system?
New York's no-fault insurance system, codified in Insurance Law Article 51, requires all drivers to carry Personal Injury Protection (PIP) coverage. This pays for medical expenses, lost wages (up to $2,000/month), and other basic economic loss regardless of who caused the accident, up to $50,000 per person. However, to sue for pain and suffering, you must meet the 'serious injury' threshold under Insurance Law §5102(d).
How do I fight a no-fault insurance claim denial?
When a no-fault claim is denied, you can challenge it through mandatory arbitration under the American Arbitration Association's no-fault rules, or by filing a lawsuit in court. Common defenses to denials include challenging the timeliness of the denial, the adequacy of the peer review report, or the insurer's compliance with regulatory requirements. An experienced no-fault attorney can evaluate which strategy gives you the best chance of overturning the denial.
What is the deadline to file a no-fault claim in New York?
Under 11 NYCRR §65-1.1, you must submit a no-fault application (NF-2 form) within 30 days of the accident. Medical providers must submit claims within 45 days of treatment. Missing these deadlines can result in claim denial, though there are limited exceptions for late notice if the claimant can demonstrate a reasonable justification.
What no-fault benefits am I entitled to after a car accident in New York?
Under Insurance Law §5102(b), no-fault PIP covers necessary medical expenses, 80% of lost earnings up to $2,000/month, up to $25/day for other reasonable expenses, and a $2,000 death benefit. These benefits are available regardless of fault, up to the $50,000 policy limit. Claims are paid by your own insurer — not the at-fault driver's.
Can I choose my own doctor for no-fault treatment in New York?
Yes. Under New York's no-fault regulations, you have the right to choose your own physician, chiropractor, physical therapist, or other licensed healthcare provider. The insurer cannot dictate which providers you see. However, the insurer can request an IME with their chosen doctor and may challenge the medical necessity of your treatment through peer review.
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About the Author
Jason Tenenbaum, Esq.
Jason Tenenbaum is the founding attorney of the Law Office of Jason Tenenbaum, P.C., headquartered at 326 Walt Whitman Road, Suite C, Huntington Station, New York 11746. With over 24 years of experience since founding the firm in 2002, Jason has written more than 1,000 appeals, handled over 100,000 no-fault insurance cases, and recovered over $100 million for clients across Long Island, Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, the Bronx, and Staten Island. He is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.
Jason is admitted to practice in New York, New Jersey, Florida, Texas, Georgia, and Michigan state courts, as well as multiple federal courts. His 2,353+ published legal articles analyzing New York case law, procedural developments, and litigation strategy make him one of the most prolific legal commentators in the state. He earned his Juris Doctor from Syracuse University College of Law.
Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
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