How to Remove a Judgment Lien from your property
November 5th, 2009, 4:47 pm
Many homeowners have found themselves in the position of owing money on a debt which they simply can not pay back, or have been sued by someone and failed to respond to the law suit. When this happens, the Plaintiff often will attempt to collect on their judgment by putting a lien on the homeowner’s property. Many of my bankruptcy client’s have come to me with just such a situation. This becomes an issue after a consumer’s unsecured debts have been discharged in bankruptcy. The reason is simple; the homeowner has a lien against their house post bankruptcy and they do not owe any money to the lien holder.
After a Chapter 7 discharge, a debtor may avoid a judicial lien by motion to the Court. To the extent lien impairs an exemption to which the debtor otherwise would have been entitled under the Bankruptcy laws. As a result, the bankruptcy court will grant a Chapter 7 debtor’s motion seeking to avoid a judicial lien if debtor’s equity in the property is less than the amount protected under the Massachusetts Homestead Act, which currently stands at $500,000 in value for the land and building, M.G.L. c. 188 § 1, and when the creditor’s lien fully impaired the debtor’s equity in the property. In re Lyons, 355 B.R. 287 (2006).
So what is the gist of all of this legal speak? When the collateral has no value, the creditor has no claim against it because it will be treated as unsecured, and thus the debtor may discharge that lien.
Thomas C Galgana Sr said,
January 8th, 2010, 10:19 am
I filed Chapter 7 and read the above information. I have a Judical lean on my prorerty. I also have a homestead that was placed on my property 1 day before they filed there case against me. I went through the bankruptcy chapter 7 thinking that i would remove there lean but they contested it and they still remain as a lean holder claiming frud. My question to you is there any action i can take to clear this lean? I have a first mortage of $250,000.00 and a second mortage of $225.000.00 total $475,000.00 and the City aprise my home at $388,000.00…. where does my values fit into you thoughts…can i remove the lean as unsecured because of no collateral value?
info said,
January 8th, 2010, 10:28 am
As you do not identify what state you are in, the laws and rules of your state may vary with those of Massachusetts. I would contact a local bankruptcy attorney and ask for their advise. However, one thing you may want to do is find out if you have received a discharge in your bankruptcy and if so, file an action in your land court or similar state court.
tracy piligian said,
March 18th, 2010, 3:39 pm
I too have a similar question. I reside in Massachusetts, and a homestead protection act has been on our property since 1998. A credit card company recently placed a lien against our property. I am curious, are they able to do this with the homestead in place? I thought that the homestead was to protect against unsecured lenders placing liens against property? Thanks in advance for any information you can lend.
info said,
March 19th, 2010, 9:48 am
Tracy,
The Massachusetts Homestead Act will protect the equity you have in your home up to the value stated under the law at the time. However, that does not necessarily negate the ability of a judgment creditor to place a lien and wait out the issue of equity or a sale date. There are several remedies available to you and you may want to speak to an experienced bankruptcy attorney about those.