Bankruptcy and Liens In some situations, your may file bankruptcy and have the debt discharged and still have a lien on the property to manage. When this occurs, you will need to take extra steps to get the lien removed.

Can a unsecured creditor put a lien on a house?

For an unsecured creditor who is not a contractor that performed work on the home, the first step that must be taken is getting a judgment against the debtor. Someone who is owed money is generally not able to just put a lien on property without first securing a judgment.

Can a lien be put on a property without a judgment?

Someone who is owed money is generally not able to just put a lien on property without first securing a judgment. Securing a judgment requires the creditor to sue the debtor.

Can you sell a house with a lien on it?

The property owner will not be able to sell the property or have it refinanced while a lien is against it. When the judgment debtor tries to sell the real property, he or she will be unable to finish the sale while the title is clouded. In order to sell the property, the debtor may decide to pay the judgment creditor off.

What happens if you have a lien on Your House?

When you file for bankruptcy, you are filing for relief from the debts you have accumulated. But that only takes care of the debts. If you carry liens into bankruptcy, they are treated differently. For instance, you carry a lien on your home as collateral in case you default.

How long does it take to file a judgment lien after bankruptcy?

However, typically, the creditor does not file an objection and, after the 17 day period has expired, the debtor’s attorney submits a proposed order for the judge to review and sign. The entire process usually takes less than a month and can be accomplished with modest attorney fees.

Do you need to file a motion to avoid a lien?

If you filed for Chapter 13 rather than Chapter 7, avoiding a lien also requires a motion. The process is similar; you must establish to the court’s satisfaction that the value of the property is not sufficient to cover all encumbrances against it.