What do you do when you discover a judgment lien long after you filed bankruptcy?
Your bankruptcy case is closed.
You’re recovering nicely.
Then you find there’s a judgment lien on your house that you didn’t know about.
And the law says that liens survive a bankruptcy case, unless the bankruptcy court orders otherwise.
Is there anything you can do to get rid of the lien?
Most likely, yes.
Can the lien be avoided
The debtor (that’s you, the person who filed the bankruptcy) can ask the bankruptcy court to void a lien on their property if
- The debt existed when the bankruptcy case was first filed
- The lien is a judgment lien
- The property to which the lien attaches was claimed exempt
- The property had too little value to pay any senior liens, the judgment lien, and your exemption
Let’s look at each requirement for an avoidable lien, found in Bankruptcy Code 522(f).