How can I get a second lien on a home released by the bank? It was included in a bankruptcy three years ago.

Asked over 1 year ago - Gilbert, AZ

I am not paying on this lien. Bankruptcy was discharged three years ago. How can I get the bank to release the lien?

Attorney answers (6)

  1. Hamid Jabbar

    Contributor Level 13

    4

    Lawyers agree

    Answered . I agree with the prior answer. Chapter 7 discharges the debt, but the lien remains. You can either negotiate for a lien release with the second lienholder, usually for a lump sum payment. Or, you may be eligible to file a Chapter 13 to strip the lien.

    This answer is for informational purposes only. This answer does not constitute legal advice, create an attorney-... more
  2. Dorothy G Bunce

    Pro

    Contributor Level 20

    4

    Lawyers agree

    1

    Answered . You can see if the lender will settle this for a lump sum of cash or you see if you are eligible to lienstrip in a Chapter 13. Although the debt was discharged, the lien remains as as good as gold and the lender is entitled to foreclose if you don't pay and can get paid in full, with accrued interest & penalties, when you sell or refinance the property. Hope this perspective helps!

  3. Steven W Zachary

    Contributor Level 17

    2

    Lawyers agree

    Answered . The bank will not release the lien and you have to be careful that the equity is not so high that it invites the bank to begin foreclosure or trustee sale proceedings against you. They are likely standing down because there is no way for them to receive a recovery on the house if they start an action against you. It might have or in the future might likely change. The other thing is that you cannot sell the house without addressing this issue. If you have a lump sum of money you might be able to call the bank and ask what they will take to issue a lien release. You might want to talk with the lawyer who helped you with your BK to see if she/he will give you direction.

  4. Diane L Drain

    Pro

    Contributor Level 15

    2

    Lawyers agree

    Answered . As was mentioned a chapter 13 would be your best bet to release the second mortage. That assumes the property is worth less than the debt of the first lender. Property values are beginning to increase in Phoenix so you should consider talking to an experienced chapter 13 attorney as soon as possible.

    A chapter 13 bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step. I am attaching a link to some free videos that explain how bankruptcy works. Most Arizona consumer bankruptcy attorneys offer a free consultation about the basics of bankruptcy.

    Please take time to educate yourself about bankruptcy and to determine which attorney is the best to assist you in the process. Don’t assume the attorney is being completely honest about their experience and capabilities. Check them out. Avoid the attorneys who advertise on TV or profess a 100% success rate in their Internet ads. It costs hundreds or thousands of dollars for these ads and someone has to pay for them – the clients. These attorneys mass produce the work and do not offer the client the hands on assistance that is necessary in a well-planned bankruptcy. Normally these firms assign all or most of the work to paralegals and the client rarely talks to an attorney.

    When interviewing the attorney ask them how long they have practiced bankruptcy law. Ask what percentage of their practice is focused on consumer work. Ask whether they are experienced in both chapter 7 and chapter 13 cases. Ask the attorney for references. Ask about their policy of returning phone calls. They should be committed to answering specific questions about your situation and help you understand your options. If, after talking with them you are still confused about the issues you raised, find another attorney. Check them out with the various ranking sources: such as www.AVVO.com, and the State Bar. An attorney is should be your guide through this process. They should educate you, be there to assist you in how to avoid pitfalls and help you plan for your future after bankruptcy. There are hundreds of “bankruptcy” attorneys in Arizona. Of those just a few will fit the criteria set forth above. Again, bankruptcy is a very complicated process and you want to use an attorney who will be there when you need them.

    IF YOU FOUND THIS ANSWER "HELPFUL" or "THE BEST ANSWER," PLEASE MARK IT SO AS AVVO AWARDS THE ATTORNEY POINTS. All attorneys providing answers on this site are donating their time and not financially compensated.

    This firm is in the business of helping people and companies file for bankruptcy protection. Therefore, the... more
  5. Diane L Gruber

    Pro

    Contributor Level 18

    2

    Lawyers agree

    Answered . I agree with Mr. Jabbar and Ms. Bunce. The lien was not removed from the title of your house. Sorry.

    Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662.... more
  6. Madhu Kalra

    Pro

    Contributor Level 14

    1

    Lawyer agrees

    Answered . If the 2nd lien on your home is not secured, you would need to file chapter 13 bankruptcy to be able to strip the lien from the propert with the specific order of the bankruptcy judge.I would recommend that you contact an experienced bankrutpcy lawyer in your area, to assist you with lien stripping of 2nd deed in chapter 13. Good Luck.

    Madhu Kalra Kalra Law Firm 23720 Arlington Avenue, Ste 5 Torrance, Ca 90501 (310) 325-9012

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