Is it possible to strip property liens that were discharged in a Chapter 7 bankruptcy? 10 Answers as of March 03, 2011

To complicate matters even further, the house is co-owned by husband and wife who are separated/divorcing (friendly terms) and only the wife went through ch.7 and is now in ch13. They are desperately trying to sell the property, repay the primary mortgage and walk away w/some equity.

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Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
The facts of your situation are not clearly expressed in your question. It is possible to strip judicially imposed liens in a Chapter 7. These are judgment liens that have attached to real property that is property of the bankruptcy estate. You refer to "property liens that were discharged in a Chapter 7 bankruptcy." I do not know what you are referring to. For an answer that takes into account your specific facts and circumstances, call me.
Answer Applies to: California
Replied: 3/3/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
This question is a little unclear. If a judgment lien was removed in the chapter 7, it is gone. If it is a second mortgage you are talking about both parties need to be in Chapter 13 to get that done - but when that is done it is done because the property has no equity. Thye should consult a lawyer. go to NACBA.ORG to find one near you.
Answer Applies to: California
Replied: 3/2/2011
Law Office of L. Paul Zahn
Law Office of L. Paul Zahn | Paul Zahn
Generally, no. While I have seen some case law which suggests that it may be possible strip liens from a residence, the general rule is that lien-stripping is only allowed in chapter 13 cases.
Answer Applies to: California
Replied: 3/2/2011
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
Most courts have held that this is not appropriate.
Answer Applies to: California
Replied: 2/28/2011
Judith A. Runyon, Esq. Attorney at Law
Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
No, it is not possible.
Answer Applies to: California
Replied: 2/28/2011
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    If judgment against wife, must avoid lien in the 7.
    Answer Applies to: Alabama
    Replied: 2/28/2011
    William C. Gosnell, Attorney at Law
    William C. Gosnell, Attorney at Law | William C. Gosnell
    Yes, it is possible.
    Answer Applies to: Tennessee
    Replied: 2/28/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Generally the value of the house has to be less than the balance of the first lien (first deed of trust). All that was discharged in the Chapter 7 was the personal liability of the wife to pay the second. She does not need to worry about having to pay the second loan if the house is sold in foreclosure or there is a short sale. However, the lien is not removed or stripped in Chapter 7. The house is still subject to the lien for the balance of the second or junior deed of trust which secures the note for the second loan.

    It sounds like in her case it would be impossible to remove the lien for the second loan since she thinks she might have some equity in the property. The second loan will have to be paid in full for her to be able to sell the house or the second loan holder has to accept less than what is owed in a short sale (in which case she would get nothing out of the sale).
    Answer Applies to: California
    Replied: 2/28/2011
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    If a person has discharged a lien in a chapter 7 but the lien remains secured on real property, then a chapter 13 can help to discharge the debt.
    Answer Applies to: California
    Replied: 2/28/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Can strip property liens in Chapter 13 only if value of house is proven to be less than the first mortgage. Then all junior liens can be stripped. Read In Re: LAM. Thank you.
    Answer Applies to: California
    Replied: 2/28/2011
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