Can I get a property lien removed during a bankruptcy case?

When an individual files for bankruptcy, they can discharge nearly all of their unsecured debts through a Chapter 7 proceeding. This includes credit card bills, past due medical payments and in some cases liens on their property. To obtain a lien avoidance Chapter 7 bankruptcy may be the best alternative. Before a lien can be placed upon property, the claimant must give proper notice to the debtor to let them know they are seeking to file a lien.

Bankruptcy As a Solution

Once a bankruptcy petition is filed, the court issues an automatic stay, which prevents creditors from taking any adverse action against the debtor. If someone wishes to file a property lien, the person filing for bankruptcy can file a motion to dispute the claim. Often times, credit card companies will try to obtain a judgment against someone when they fail to pay their bills. If they are successful in obtaining such a judgment, a lien may be placed upon their property. However, many states allow bankruptcy petitioners to list exemptions, which allow them to keep certain property excluded during the proceeding. Many states have a homestead exemption that allows the person to protect a certain amount of equity in their home. This means that a judgment can be removed if the lien impairs the homeowner’s ability to claim the maximum allowed under the state or federal homestead exemption. Most unsecured liens can be removed through the bankruptcy process.

Seeking Advice From a Bankruptcy Attorney

Choosing to file for bankruptcy is a big decision and one that can impact your future for quite some time. Therefore, it’s best to speak with a qualified bankruptcy attorney before filing a petition. Your lawyer can review all of the debts you may be struggling with and make a recommendation that best suits your specific situation.