Could Filing Bankruptcy Eliminate Liens On Houses?

A lot of homeowners these days find themselves owing a lot of money and unable to pay it back. There are homeowners that find themselves faced with a lawsuit and fail to respond to the lawsuit. When such things happen, the creditors or banks or plaintiffs would try getting their money back by putting a lien on the house. So now the question is, would filing for bankruptcy remove the lien on the house? First of all, a bankruptcy filing does have the potential to remove most of your debts. Most of the time, a bankruptcy filing would eliminate the obligations that led to lenders filing a lien on your house in the first place. You have to understand though, that a lien could not be removed even after you have filed for bankruptcy. So even though you are not legally required to pay off the debt that led to the lien, the lender can still take your property.

There are actually three ways that liens come about. Buying secured property is one of the ways you can come about a lien. A common example of secured properties include houses and cars. This means that when you take out a car loan or a mortgage, the lenders are going to have a lien on the said property. And because there is a lien on the property, the banks or creditors have the right to foreclose on the property. Through court judgment is another way you can come about a lien. You could avoid the judgment lien if the lien is attached to the property which you can exempt when you file for bankruptcy. The court would require additional paperwork though, to remove records of the lien.

The type of lien that you are going to have difficulty removing even when you file for a bankruptcy is a tax lien. Usually, you could not get a lien on these back taxes that were discharged on a bankruptcy filing unless the back taxes are three years old. Keep in mind that you are going to have to do sufficient research on the details or the process of filing a bankruptcy to remove the lien on your house and if you can manage it, get legal advice. This way, you can guarantee that you are not going to make mistakes when you are filing for bankruptcy and that you are not going to make mistakes when going about filing documents which you may regret later on or cause even more difficulties than the ones you already have.