If you have received a judgment against you and you own real property, such as a house, it is very likely that you have had a judgment lien put against your house. A lien is a notice attached to your property that states that you owe a creditor a certain amount of money. When a lien is placed on your property, it shows up on the title to the property. To some, this may not seem like a big deal; why would it matter if a lien shows up on your property title? The reason why placing a lien on a property should be important to someone is that to be able to sell or refinance the property, one must have a clear title. The only way to clear the title of the lien is to pay the lien off in full. Because of this, creditors know that putting a lien on the property is an almost guaranteed way to collected the money that they are owed.
Many people assume that if they file for bankruptcy, all debts that they owe will be taken care of; they will no longer be responsible for paying off the creditor that they owe. Unfortunately, though, judgment liens survive a bankruptcy, meaning they will still be on your house even after you file. Because of this, there are some important steps a debtor should take regarding liens on their property if they are considering filing for bankruptcy. If you have received a judgment against you from one of your creditors, and you own real property (such as a house) it is likely you will have a judgment lien on your house. One of the easiest ways to tell if you have a lien on your property is to obtain a copy of your title; any lien that is on your property will be listed on your title. If you find that you have a lien on your property, it is best that you inform your attorney right away.
A judgment lien will survive a bankruptcy, meaning even though your personal liability to pay the debt will go away, your property’s liability will not. This means if you wish to sell your property post-filing your bankruptcy, you will still have to pay the lien before you can sell the property. However, in some cases, your attorney may be able to assist you with “avoiding the lien” through your bankruptcy case. By doing this, your attorney would be able to calculate if you would be able to get rid of the entire lien or part of it through your bankruptcy case. This would ensure that if you decided to sell your property in the future, your title would be clear, and you wouldn’t have to pay off any liens to do so.
If you would like more information about avoiding judgment liens through your bankruptcy, contact a St. Louis Bankruptcy attorney today!