Statutory liens survive bankruptcy. Chapter 7 may still be able to help in various ways and be your best solution.
Statutory liens on your home cannot be gotten rid of in bankruptcy like judgment liens often can. So it’s important to know what they are.
Sometimes life simply dishes out some bad luck. A bad car accident. A serious illness. Bankruptcy turns these lemons of life into lemonade.
Execution liens on your home are like judgment liens, “avoidable” in bankruptcy. But only if the underlying debt can be discharged.
Here’s an example showing why a judgment lien on your home is dangerous, and how bankruptcy can solve this problem.
Bankruptcy can do more than forever discharge your debts. It can undo some bad creditor actions, like a recorded judgment lien on your home.
A judgment lien effectively converts a debt that was secured by nothing into one secured by your home.
If your liability dispute with your creditor spills into your Chapter 13 case, the bankruptcy court may be a good forum to fight it out.