Photo by Sven Brandsma on Unsplash. The mortgage foreclosure moratorium extension can be helpful. But it doesn’t help with judgment and tax liens on your home. Bankruptcy does so. Last week we wrote about the ongoing foreclosure moratorium and the related mortgage forbearance opportunities. We discussed how bankruptcy can hugely increase the practical benefits of this for you and your … Read More
Remove a Judgment Lien from Your Home
One great benefit of bankruptcy is the ability to remove a judgment lien from your home. It’s almost as helpful as writing off that debt. The Problem, and the Bankruptcy Solution Do you have a judgment lien on your home? If so, the debt on that judgment is secured by whatever equity you have in your home. The debt … Read More
Chapter 7 with a Current Mortgage But Other Liens
Here are 3 more Chapter 7 scenarios when you are current on your home mortgage but have other liens on your home. Our last blog post was about situations in which Chapter 7 works well enough in the following 3 debt situations: Second or third mortgages Property taxes Income tax with a lien recorded on your home In general, … Read More
Execution and Judgment Liens
Execution liens on your home are like judgment liens, “avoidable” in bankruptcy. But only if the underlying debt can be discharged.
The Undoing of a Judgment Lien
Here’s an example showing why a judgment lien on your home is dangerous, and how bankruptcy can solve this problem.
Release a Judgment Lien from Your Home
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 is Dangerous
A judgment lien effectively converts a debt that was secured by nothing into one secured by your home.
Undoing a Judgment Lien
A judgment lien turns an unsecured debt into one secured by a lien on your home. Bankruptcy can undo that, and write off the debt.
Secured Debts Treated Like Unsecured Debts in Chapter 7
A secured debt can be handled like an unsecured debt if you surrender the collateral, “avoid” a judgment lien, or just keep the collateral.
“Avoiding” Judgment Liens on Your Home
Both Chapter 7 and Chapter 13 can wipe away judgment liens. But doing so under Chapter 13 can be better when used with its other benefits.
Stop a Creditor from Turning its Unsecured Debt into a Secured One
Because of Chapter 13’s much more powerful automatic stay, its ability to prevent judgment liens and tax liens is extremely valuable.
Secured Debts
Creditors with secured debts often have much more leverage against you than with unsecured debts.
Removing a Judgment Lien from the Title to Your Home
The potential ability to get rid of judgment liens from your home’s title is an impressive benefit of bankruptcy.
Stopping a Judgment Lien from Hitting Your Home
Letting a creditor get a judgment against you is dangerous, for a lot of reasons. One of the biggest dangers is a judgment lien on your home.
Judgment Liens that Can Be “Avoided”
Bankruptcy can’t get rid of most creditor liens on what you own. But judgment liens that can be “avoided” on your home are an exception. Our last blog post was about judgment liens, why they are so dangerous, and how both Chapter 7 and 13 types of bankruptcy can deal with them. Today’s blog post explains what determines whether a … Read More