I Received A Discharge Of All My Debts, So Why Is There Still A Lien On My House?

by Douglas Jacobs, Esq.

March 8, 2008

It’s frustrating.  You went through the process, complied with everything your lawyer and the bankruptcy trustee said to do, and there is 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 liens are the liens that attach by operation of law such as:  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, but your bankruptcy attorney will need to discuss with you the procedure and the motion needed to do that.

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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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.

Last modified: April 16, 2012