I Received A Discharge Of All My Debts, So Why Is There Still A Lien On My House?
By Douglas Jacobs, California Bankruptcy Attorney on Mar 8, 2008 in Bankruptcy Practice and Procedure, Benefits of Bankruptcy, General Bankruptcy Information, Life After Bankruptcy
It’s frustrating. You went through the process, complied with everything your lawyer and the bankruptcy trustee said to do, and there’s still a lien on your home. The debt was discharged. Even the credit report shows it was included in the bankruptcy. But the lien is still there.
Well, there are three types on liens that can attach to your property: consensual, legal and judicial. Consensual liens are those which you have agreed to put there – mortgages, lines of credit, that sort of thing. Legal are the liens that attach by operation of law – property taxes, improvement bonds (in some areas) and personal taxes. A judicial lien is one which attaches after someone gets a judgment against you after a law suit.
You can get rid of any lien by paying it. In fact, that is the only way to get rid of a consensual lien (unless you give up the house or property). You can get rid of a judicial lien after the debt is discharged in bankruptcy if the lien is unsecured or impairs an exemption you have in the house.
Legal liens are different. If the tax is paid, the lien will be released. Even if the tax is discharged (or compromised) the lien won’t go away unless the taxing authority agrees to release it or until ten years have passed. So the lien can sit there on your property for years even though you no longer owe the debt!
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