Written by Avvo Staff

How to remove a property lien

You'll need to file a lien release form in order to sell or transfer your property.

A lien release form can remove a property lien, or a claim a creditor has against your property for a debt you owe. If you have a lien against your property, you don't necessarily have to forfeit your property. You have several other options.

Property lien removal process

A lien against your property will prevent you from selling it until that debt is paid. Here are the steps to take to remove the claim of the lien holder against your property.

  1. Make sure the debt the lien represents is valid. If you don't believe you owe the debt to which the lien is attached, you may want to consult with an attorney.

  2. Pay off the debt. If the debt is valid, pay the creditor in full. If you work with an attorney, you may be able to negotiate a lower payoff amount.

  3. Fill out a release-of-lien form.You can often find lien release paperwork online. If not, try the county clerk's office or an attorney, if you have one.Make sure the form includes your name, the lien holder's name, proof and amount of the debt paid, and a description and address for the property.

  4. Have the lien holder sign the release-of-lien form in front of a notary. The lien holder needs to sign the document in the presence of a notary public.

  5. File the lien release form. You'll usually file the lien release at the county recorder's office, at which point it becomes public record. You may have to pay a small fee to file.

  6. Ask for a lien waiver, if appropriate. A lien waiver is a document from a contractor showing that you have paid for the work in full and waiving all future lien rights of the contractor in the work or equipment.

  7. Keep a copy. You'll want to have a copy of the release form for your records.

Other ways to avoid or remove a lien

You don't necessarily have to forfeit your property or pay off the associated debt to remove a lien. Other options for removing or avoiding a lien include:

  • Running the statute of limitations. States place limitations on how long a lien is good for as well as how long a lien holder has to file suit, such as with a mechanic's lien. For example, in Virginia, a contractor must file suit within 6 months of recording the lien. Similarly, a judgment lien in California lasts only 10 years, but creditors have the option of renewing the lien if unpaid.

  • Private negotiations. You may be able to work out a settlement with the lien holder in arbitration, mediation, or informal negotiations. For instance, the creditor may agree to lift the lien in exchange for higher monthly payments.

  • Court order. If you believe the lien exists due to bad faith, coercion, or fraud, you may be able to obtain a court order lifting it.

  • Lien stripping. According to Justin Charles Valencia, a Nebraska bankruptcy attorney, this is "a process available in Chapter 13 bankruptcy that canremove junior liens(second or third mortgages) from your real estate, making the debt 'unsecured.'"

  • Lien avoidance. You may be able to avoid judgment liens against your home or car in Chapter 7 bankruptcy if all of the following are true:

    1. The lien is a result of a money judgment issued by the court.
    2. You are eligible to claim an exemption in all or part of your equity in the property.
    3. The lien would result in the loss of some or all the property if sold.

How an attorney can help

An attorney can assist you at several points in the lien removal process. For one, an attorney can help you complete the appropriate lien release form and file the paperwork with the court properly. Additionally, an attorney can negotiate with the lien holder on your behalf for a potentially lower settlement.

If you have a lien on your property, forfeiture and repayment are the only 2 possibilities. You may be able to avoid or remove the lien on your own or with the help of an attorney.

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