If you’re going to be filing for Chapter 7 bankruptcy and you still face liens on your house, you may be wondering what will happen to these added debts. The goal of Chapter 7 bankruptcy is to remove as much debt as possible, removing some of these debts can be more difficult when there are liens in place against your property. A bankruptcy filing won’t automatically remove the lien and it regularly comes down to voluntary and involuntary liens and the nature of what will remain in place after a bankruptcy.
Avoidable Liens
Bankruptcy law can require a debtor to remove liens from a property. Certain types of liens can be avoidable but they require legal action to remove them in a bankruptcy court. Here are some ways that liens can be removed!
The property the lien is out against is a homestead: under Florida law your home can have homestead protections as long as it’s your primary residence.
The lien is a judicial lien: a judicial lien is a lien that is ordered by the court’s judgment through a lawsuit.
If you have a lien that has been taken against your home in order to secure a mortgage or goods and services for the home it may be difficult for the lien to be removed under a chapter 7 exemption. Other liens which could also be difficult to remove could be items that were recorded before your home’s purchase such as for homeowners association dues as well as ongoing tax liens against your house. Filing a Chapter 7 bankruptcy can be difficult enough but if you are facing liens it’s important to seek legal assistance before moving forward.
This post was written by Trey Wright, one of the best bankruptcy lawyers in Tallahassee FL! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.
The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.
