Liens on my Home, will they be removed in Bankruptcy?

In brief, the liens will almost certainly delay or prevent the sale of your home. As well, while it may be possible to remove the liens, you will need to hire a lawyer.

The main thing to understand is that liens survive the bankruptcy process unless special action is taken with the court. In a  Chapter 7 for example , while your creditor debt was discharged, your liens were not. You will need an attorney, familiar with the process in your state, to remove the liens.  The American Bankruptcy Institute says so, too.

Some  liens are  the removable kind, but not all are. If the lien is a judgment resulting from credit card debt, it may be removable if the equity in your house is not too great. If you have too much equity, then the lien might have to be paid before you can sell the property.

A mechanic’s lien, on the other hand, is not removable at all, even if you have limited equity in your home.

For example, a home repair company placed a lien on my client’s property after placing aluminum siding on the house and never receiving payment in full for the work. If my client sells the property before paying off the lien, the lien will be paid at the time of the sale and the appropriate amounts credited to the home repair company.