Bankruptcy is always a stressful experience and a complicated one. It often results in creditors filing liens against the client’s home, making it difficult or even impossible to sell until the liens are paid off. A Massachusetts lien release lawyer can make the process less painful by guiding you through your options, and it’s important to understand the steps you need to take to clear the liens in a bankruptcy situation.
Types of Liens in Massachusetts
First, a word about different kinds of lies. There are basically three kinds:
- Consensual Liens: This type of lien comes about when a homeowner gets a line of credit or a loan. So for example, when you get a home mortgage you agree that the bank has a lien on the home until the mortgage is paid off.
- Statutory Liens: in Massachusetts statutory law these are liens created that give rights to a party that provides some benefit to the homeowner. An example would be a Mechanic’s lien (a debt incurred when you hire someone to work on your home but then fail to pay them) or a tax lien. Unpaid property taxes often result in a tax lien. This type of lien has to be recorded with the county’s Registry of Deeds, to be enforceable.
- Judgment Liens: Like statutory liens, these must be recorded with the county’s Registry of Deeds after a court gives a creditor the right to attach the lien to the property because of a debt. The judgment lien stays with the property for twenty years even if the property is sold, if the lien isn’t paid off, by Massachusetts law. This applies to personal property as well as real estate, although the lien stays with the personal property for only thirty days.
Anyone placing a lien on property is obligated to let the property owner know about the lien.
Steps to Take to Clear Liens
There are a number of ways to clear liens:
- Obtain a payoff and pay the lien in full
- You can file with the court where the lien is recorded, called a Motion to Avoid Lien
- Avoid the lien in Chapter 7 or Chapter 13 bankruptcy. Chapter 13 may eliminate a second or third mortgage in certain circumstances
- Negotiate directly with the creditor to settle the lien for less than the amount owed
- Challenging the lien’s validity may be an option and will ultimately result in the court deciding if the lien is enforceable, but this step requires an attorney’s help
Once the lien has been resolved, the lienholder must file a release with the court to prove the debt was satisfied.
Get Help From an Experienced Bankruptcy Attorney
Bankruptcy is a complex situation, and if you feel you have no other recourse, you need a skilled Massachusetts bankruptcy lawyer to guide you through the process. At Logan A. Weinkauf, P.C., we specialize in bankruptcy, which allows us to make the process far less stressful. Contact us today for a consult to learn more.