[CLBS] Perfection of medical indigency lien and the interplay with the automatic stay

[Tecla Druffel]

Hi all,

Yet another medical indigency lien question! Any help or guidance is
welcome!

My contact information is Tecla Druffel, 208-743-9569 or
tecla.druffel at gmail.com.

Thank you!!!
Tecla

John Doe receives medical care at Hospital X from 6/17 to 6/22.  John Doe
files for bankruptcy on 7/1.  Hospital X submits an application for
medically indigent benefits with John Doe's county on July 14.  The county
files a Notice of Lien and Application for Medically Indigent Benefits in
the county records department 7/21 (attempting to perfect the lien).  Does
the exception to the automatic stay provided by 11 U.S. Code § 362 (b)(3)
and § 546(b)(1)(A) apply *where a county perfects a lien for medically
indigent benefits after the bankruptcy filing date* where Idaho Code
31-3504(4) provides such lien, if recorded, shall have a *priority date* as
of the date the necessary medical services were provided?  Stated another
way, is Idaho Code 31-3504(4) a "generally applicable law" that permits
perfection of an interest in property to be effective against an entity
that acquires rights in such property before the date of perfection?

- 6/17/2008 - start date of care
- 6/22/2008 - end date of care
- 7/1/2008 - Filed for bankruptcy. Automatic stay in place.
- 7/14/2008 - Hospital fax filed the Uniform County Medical Assistance
Application.  Lien automatically attached to real and personal property
retroactive to 6/17/2008 (subject to automatic stay, if applicable)
- 7/21/2008 - County recorded an indigent medical benefit lien at 11:50:49
a.m.
- 7/21/2008 - County received notice of the bankruptcy filing.


11 U.S. Code § 362 (a) provides:

(a) *Except as provided in subsection (b) of this section*, a petition
filed under section 301, 302, or 303 of this title, or an application filed
under section 5(a)(3) of the Securities Investor Protection Act of 1970,
operates as a stay, applicable to all entities, of—
(1) *the commencement or continuation, including the issuance or employment
of process, of a judicial, administrative, or other action or proceeding
against the debtor that was or could have been commenced before the
commencement of the case under this title, or to recover a claim against
the debtor that arose before the commencement of the case under this title*;
(2) the enforcement, against the debtor or against property of the estate,
of a judgment obtained before the commencement of the case under this title;
(3) any act to obtain possession of property of the estate or of property
from the estate or to exercise control over property of the estate;
(4) *any act to create, perfect, or enforce any lien against property of
the estate*;
(5) *any act to create, perfect, or enforce against property of the debtor
any lien to the extent that such lien secures a claim that arose before the
commencement of the case under this title*;
(6) any act to collect, assess, or recover a claim against the debtor that
arose before the commencement of the case under this title;
(7) the setoff of any debt owing to the debtor that arose before the
commencement of the case under this title against any claim against the
debtor; and
(8) the commencement or continuation of a proceeding before the United
States Tax Court concerning a tax liability of a debtor that is a
corporation for a taxable period the bankruptcy court may determine or
concerning the tax liability of a debtor who is an individual for a taxable
period ending before the date of the order for relief under this title.

11 U.S. Code § 362 (b) and (b)(3) provide:

(b) The filing of a petition under section 301, 302, or 303 of this title,
or of an application under section 5(a)(3) of the Securities Investor
Protection Act of 1970, does not operate as a stay—
(3) under subsection (a) of this section, of *any act to perfect*, or to
maintain or continue the perfection of, *an interest in property to the
extent that the trustee’s rights and powers are subject to such perfection
under section 546(b) of this title* or to the extent that such act is
accomplished within the period provided under section 547(e)(2)(A) of this
title;

11 U.S. Code § 546(b)(1)(A) provides:

(1) The rights and powers of a trustee under sections 544, 545, and 549 of
this title are subject to any generally applicable law that—
(A)* permits perfection of an interest in property to be effective against
an entity that acquires rights in such property before the date of
perfection*; or

Idaho Code Section 31-3504(4) provides:

(4)  Upon application for financial assistance pursuant to this chapter an
automatic lien shall attach to all real and personal property of the
applicant and on insurance benefits to which the applicant may become
entitled. The lien shall also attach to any additional resources to which
it may legally attach not covered in this section. The lien created by this
section may be, in the discretion of the county commissioners and the
board, perfected as to real property and fixtures by recording a document
entitled: notice of lien and application for financial assistance, in any
county recorder’s office in this state in which the applicant and obligated
person own property. The notice of lien and application for financial
assistance shall be recorded as provided herein within thirty (30) days
from receipt of an application, and such lien, if so recorded, *shall have
a priority date as of the date the necessary medical services were provided*.
The lien created by this section may also be, in the discretion of the
county commissioners and the board, perfected as to personal property by
filing with the secretary of state within thirty (30) days of receipt of an
application, a notice of application in substantially the same manner as a
filing under chapter 9, title 28, Idaho Code, except that such notice need
not be signed and no fee shall be required, and, if so filed, *such lien
shall have the priority date as of the date the necessary medical services
were provided*. .  .