I filed for bk and it was finalized. I was not aware there was a lien on the home so I didn't address it at the time of the BK. The BK was a chapter 7 and it eliminated all of my personal debt, including the debt that is associated with the 3 liens. I can no longer afford my home, so I moved out and I am trying to short sell it. I owe $410,000 and the house is valued at $275k. The bank has approved the short sale at $250k because of the condition of the house. However now the liens are delaying the process. How do I go about removing the liens on the home when the debt has already been discharged in BK proceedings.
Family Law Attorney
Get your bankruptcy attorney to contact the lien holders, if they have not released the liens they may be in violation of the law.
Every legal matter is fact specific, and there are often nuances in every case. This is intended for comment only, and does not create an attorney client relationship.
I respectfully disagree with attorney Hill. While the underlying personal obligation was extinguished by your discharge, the judgment liens survive. You will have to reopen your case, file motions to avoid the judicial liens. This will require the services of an experienced BK lawyer. You can contact me or any other AVVO BK lawyer for further details.
You will have to reopen your bankruptcy case and file a motion to avoid the liens unless the creditors will voluntarily release them for a short sale. You might determine that it is better just to let the bank take over the property either by a deed in lieu or nonjudicial foreclosure. Your real estate agent will disagree (the agent wants to protect commissions) but there no equity in the house to protect. You might get more bang for your buck by simply staying put until the bitter end. Your credit is already ruined.
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Chapter 7 Bankruptcy Attorney
What kinds of liens are they? Some kinds of liens can be removed, such as judgment liens. Other kinds cannot be removed & must be paid off or settled. Hope this perspective helps!