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Can I have judgment liens that was prior to a BK removed 3 years after discharge in TN ?

New Market, TN |

I did not reaffirm my 1st or 2nd mortgage when we were granted a BK discharge . 3 years later the bank has still not foreclosed and we are talking with them about moving back into the house and modifying the loan ; however I have several judgments from a past business that total about $ 150 , 000 that were included in the BK . The home has been vacant for over 3 years and has been vandalized . At this point probably worth $ 120 , 000 , my 1st is $ 240 , 000 , my 2nd is $ 80 , 0000 . I am trying to negotiate with the 1st and 2nd to come to a settlement amount to release their liens , but need to know if I can get the judgment liens removed this late after the BK discharge ? Or should I try to settle for pennies on the $ ? I'll have to put about $ 20S in the home just to live there .

Attorney Answers 3

Posted

I recommend that you consult a local bankruptcy attorney on this, but I have seen this done before. Even though the case is closed, you can file a motion to reopen and see judgment liens. A local attorney will be able to examine the facts of your file to determine if actually qualify for removal of the liens.

First, the firm is a debt relief agency according to the U.S. Bankruptcy Code. We help people file for bankruptcy. We also do other stuff and we do it well, but Congress wants me to post this notice. Second, nothing on this site is legal advice. You are not my client unless you enter into a written agreement signed by you and me.

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Diane L Gruber

Diane L Gruber

Posted

If memory serves me, you have to be living in the house now AND claim that the judgment lien impairs your homestead exemption. I would not bother, but do run it my a locak BK attorney.

Carl H Starrett II

Carl H Starrett II

Posted

That's an issue that I'm not sure has been raised on an appellate level, at least not the 9th Circuit to my knowledge. The statute only talks about the liens impairing an exemption that the debtor could have claimed as oppose to an exemption that the debtor actually did claim. I know some of the local BK judges in my district do believe that claiming the exemption is necessary. There might also be something besides a homestead exemption that might be available. However, the intricacies of the applicable code sections and applicable circuit law are best discussed with a local attorney.

Posted

You quite possibly can, but it will not be a piece of cake. Reopening the case shouldn't be that hard, but you're going to have to establish the value of the property at the time of the filing, which was some time ago. That can be done, but it puts another wrinkle in this. Depending upon the amount, you might be better off settling with them for pennies on the dollar, but even then the attorney will probably be able to do better than you could on your own, so you really want to consult with a bankruptcy attorney on this one.

Todd Mannis, Esq.
Calabasas, California

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Asker

Posted

I appreciate the advise. My BK attorney has retired or I would go see him. I will find another. Thanks again

Posted

It is a pretty simple thing to reopen a bankruptcy to remove the judgment liens if you know what you are doing, but the process isn't cheap. Your plan makes no real economic sense based on the information you provided and I have to wonder why you want to pour good money after bad right now. Hope this perspective helps!

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Asker

Posted

You are absolutely right...financially it makes no sense, we will never get the money back out of the house; however, due to the bank not foreclosing for the past three years, we are unable to obtain another mortgage for at least another 3 years...so there's another $63K gone in rent. But the biggest thing is emotional for my wife and children. Things are alot better financially now and I don't mind loosing a little money on the deal, but just don't want to go overboard. I really appreciate everyone's advice.

Dorothy G Bunce

Dorothy G Bunce

Posted

Why not look into a short sale instead? I bet if your Wife started looking at other properties that cost you much less she'd find something that would make her happy. As a married man, you have to know that women like to change their minds! Happy Valentines Day!

Asker

Posted

We did find another house, and that's when we found out that BOA had not foreclosed on one of our old ones. Wouldn't I still have the 3 year clock ticking from the time of the short sale?

Dorothy G Bunce

Dorothy G Bunce

Posted

Not necessarily, because the short sale isn't a foreclosure. In order for a short sale to go through, you might still have to lay out the bucks to remove the lien, but at least you don't have to throw away the money on repairs.

Asker

Posted

Excellent point, I will explore that avenue a little further, before doing anything else. Thanks again.

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