Can I Remove Judicial Liens from My Home through Bankruptcy?
BEWARE: Judicial Liens (aka Judgment Lien) attached to your home or other real estate do accumulate interest at a rate of 10% per year in accordance to the State of California judgment rate. The 10% interest rate per year is calculated on the principal, costs of lawsuit, and interest that has accumulated so far. This will add up to a hefty sum over time if you do not act.
When a creditor filed a lawsuit and received a judgment against you, the creditor can levy your bank account, garnish your wages, or record an abstract judgment with your county recorder’s office in hopes that you own real estate in the county. Abstracts of judgment become liens against your home and such lien can pass through bankruptcy unaffected. For this reason, liens are different from debts. Debts can be discharged in bankruptcy unless they fall within certain categories of debts. A motion must be file to remove most judicial liens.
Bankruptcy Code section 11 U.S.C. 522(f) allows a debtor to remove judicial liens against your home if the liens impair the homestead or wildcard exemption that debtor claimed in his or her bankruptcy petition. This tool can be used in either Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.
The judicial liens will remain on your home even though you filed for bankruptcy unless you filed a motion. If you want to keep your home and you believe that you have been sued, it is recommended that you purchase a preliminary title report to determine if there is a judicial lien or judgment lien or abstract of judgment recorder with the county recorder’s office.
Other liens like statutory tax liens, mechanic’s liens, homeowners association liens, and lis pendens are not avoidable under bankruptcy code section 11 U.S.C. 522(f).
Because 11 U.S.C. 522(f) is a bankruptcy tool, you must file the motion during your bankruptcy case. After your bankruptcy case is closed, you must file a motion to request that the judge reopens your case to remove the judicial liens. The process can take 60 days. However, the judge can reject your motion to reopen the bankruptcy case.
It is your responsibility to let Muoi Chea Sacramento Bankruptcy Attorney know that there are judicial liens on your property. It is not Muoi Chea Bankruptcy Attorney responsibility to determine that there are judicial liens on your property.
If there is a judicial lien or an abstract of judgment recorded with the county recorder’s office and you do not own any real estate before bankruptcy filing, there is no real estate for the judicial lien to attached to and the balance of the debt will be discharged assuming the debt does not fall within certain nondischargeable debt categories. For more information call an experienced Sacramento bankruptcy attorney Muoi Chea with bankruptcy offices in Sacramento, Stockton, and Fairfield, California to provide debt relief in Northern and Central California, from Solano County to Stanislaus County Modesto California.