Removing Liens From Your Home in bankruptcy is possible if you do the the right thing. Many people who end up filing bankruptcy don’t consider filing until they are under suit by a creditor. It’s generally best to file bankruptcy before creditors file lawsuits, but most people consider bankruptcy an absolute last resort. For many debtors, the prospect of suffering wage garnishment before the bankruptcy files is the most serious issue. For homeowners, however, there is another issue to consider: liens.
Removing Liens From Your Home
When a creditor successfully sues a debtor, they have a few different options for collecting judgments. The most common is a garnishment. This is where the court orders the debtor’s employer to withhold a portion of the debtor’s pay on every check to pay the creditor. If the debtor owns a home, the creditor can also obtain a lien against the property. A lien is a claim against the property itself. Basically, it says that in order for this property to be sold or transferred, the creditor must be paid. They can receive payment either before the sale or after the sale, but they require payment regardless. In many cases, debtors don’t even know that the lien exists until they try to sell the house.
Motion to Avoid Liens on Your Home
There is a fix for this problem. It is a Motion to Avoid Lien. First, if you are contemplating bankruptcy, own a home, and are under suit by a creditor, inform yourself. Contact your county’s land records department and have them look for any liens against your property (other than your mortgage). If you do have judgment liens against your property, let your attorney know before the case files. Making sure that your attorney knows about the liens will save you time, money, and headaches in the future. Once your attorney knows about the liens, he or she can plan to have the bankruptcy court remove them with a document called a “motion to avoid lien”. This is separate from the basic bankruptcy process, which is why it is so important for the lawyer to know beforehand that he or she will need to take action.
If your bankruptcy completes, and you become aware that there is a lien against your property, that is still fixable. Your attorney can ask the court to reopen the case, and after the court grants that request, he or she can file the motion to avoid lien, just as if it had been done during the normal bankruptcy period. The downside to this approach is time and money. Reopening the case and filing the motion takes at least four weeks and the court charges several hundred dollars to re-open a case, not including the cost of your attorney’s time and efforts.
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If you own a home and are considering filing a bankruptcy consider removing liens from your home in bankruptcy. Our Tulsa bankruptcy lawyers have helped thousands of people just like you get a successful bankruptcy filed. Regardless of the question we can help you. Call us today or read through our bankruptcy attorneys blog for more information. We can help 918.739.8984