If you have a lien on your property, then a bankruptcy is an effective way to eradicate this and help you to get back on track without these liens standing on your way. It is important to note that lien removal is not an automatic privilege with bankruptcy. Lien removal is also not mandatory, meaning that some people can keep all liens on their property even when they are filing for bankruptcy. Instead, individuals who want to eliminate liens are required to request this service to the bankruptcy court.
A judgment lien is a court order that can only be imposed on your property after you are sued and the plaintiff wins money against you. In most states, the judgment creditor will then have to record the judgment by filing it with the county or state. Liens can attack to property that you acquire later on. For example, if you buy an additional home in the future, then the lien may come into place.
In some cases, you may be able to eliminate a lien on your property without paying anything to the creditor. This will only be permissible on certain types of exempt property. Normally, when the lien is eliminated you are permitted to keep the property without paying anything more to the creditor. This can be an effective way to eliminate debt and still be able to gain a hold on your property.
You can also get rid of a lien by redeeming property. This happens when you pay the creditor with the lien the amount of the lien or the current replacement value of the property that the lien concerns. The courts normally require that a person who takes this legal action pay the lesser expense (the amount of the lien or the replacement value of the property.) Individuals can also eliminate these pesky liens by surrendering their property to a creditor, but oftentimes this is a last resort as it causes the individual to lose the property that the lien was placed against.
If you don't eliminate a lien, then this lien will survive your bankruptcy and the creditor has the right to take your property or force its sale if you fall behind on payments to that creditor. Normally, courts are very liberal about allowing a debtor to come back to court and file a motion to avoid a lien. If you bankruptcy case concludes and you realize that you forgot to dismiss your lien at the time, then you may be able to reopen the bankruptcy and get the lien removed.
If the property is valuable, then the creditor that has the lien in your property will probably repossess the item if you don't keep your payments current. If the property is a title or ownership document and a creditor does not try to gather the property during the time that you are making payments, then there may be consequences at the time that you try to sell the property. Sometimes, at this time, the lien must be paid out of the proceeds after the property is sold.
In some cases, the creditor who has a lien on your property can seize the property if it is declining in value and it is obvious that you aren't taking steps to keep it during the bankruptcy. The creditor will need to approach the court in this situation, and the bankruptcy court has the ability to grant or deny the request to seize the property prior to the end of the bankruptcy.
If you would like to remove a lien from your property, automobile, or another possession, then you may want to talk with a local bankruptcy attorney in your area. With the right attorney there to help you, you may be able to satisfy your lien and avoid having this burden on your properties.