I filed a CH. 7 bk and it was discharged 6 months ago. Citibank is a debtor (the got a judgement against me in court) that was discharged. Now I'm trying to short sell my house and the Title company says the lien is still against the house even though is was discharged against me. Is there any circumstance that will allow the debt to be discharged against the home also. This debt is making it impossible to short sale.
If you had the assistance of an experienced bankruptcy attorney, you would have been informed that a recorded abstract of judgment survives your discharge. You can reopen your case and file a motion to avoid the judgment lien pursuant to 11 USC 522(f). You will be better off hiring a BK attorney to do this.
This is a very confusing aspect of bankruptcy that your attorney should have explained to you. Your Chapter 7 discharge serves to relieve you of paying the promissory note that you signed when you bought your house. The lien, however, is not a dischargeable debt (or a debt at all, really); rather it is a security interest that the lender has in the property. That is not removed in a Chapter 7 proceeding so the lien is still there.
A short sale is, by definition, the sale of the house for less than what's owed. After your discharge, you owe zero so it doesn't really make sense to me why you're selling short.
My comment here does not create an attorney client relationship with you. I am a debt relief agency. I help people file for bankruptcy under the United States Bankruptcy Code.
You have been discharged of the debt ... but the judgment lien was not removed. The good news is: you simply have to reopen the case and "avoid" (remove) the lien. The bad news is: this may take longer than the buyer is willing to wait.
I agree with my colleagues.
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Chapter 7 Bankruptcy Attorney
Since you're getting out of the house, you could let the house go into foreclosure since the debt has been discharged, the creditors who have liens on the property cannot go after you for a deficiency. Not sure why you need a short sale. But the only way to get that done now is to either ask Citibank to release the lien (they might agree) or motion to reopen the case & then motion to remove the lien. This will involve money & time so you want to be sure it's in your best interest to proceed with short sale. If you did not hire an attorney to handle the bankruptcy case, now is a good time to get one. If you did hire one, lien avoidance could have been excluded from the scope of representation, check the attorney/client agreement. Typically attorneys charge extra for this step.
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Chapter 7 Bankruptcy Attorney
I am assuming that the reason you are short selling the home is that you are going to make some financial profit from it in some way? Otherwise, why would you do it?
If you want to go forward with the short sale, the only way to get rid of the abstract judgment lien tied to your property is to file a motion to reopen your case, then file a motion to avoid the lien. The motion to reopen the case has a fee attached to it, and whoever is preparing the motions will most likely charge you as well. Make sure that you weigh the costs/benefits when deciding whether to go forward with this short sale (and whether the buyer is willing to wait that long)
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As the other attorneys have mentioned, you should have filed a 522f motion to also the remove the lien on the house. Once the creditor secured his judgment as a lien against your property, while the debt to you personally is eliminated, the debt now stuck to your house is not eliminated. Did you mention to your attorney who prepared your case that the judgment had become a lien? Regardless, as another attorney pointed out, you can reopen your case however since it is a bit more involved, I would recommend you get an attorney for that.