WHAT HAPPENS IF A CREDITOR PLACES A LIEN ON YOUR HOME?
There are time limits on how lengthy a lien can be placed on your property in several places. The lien may be lifted if the creditor does nothing and you still haven’t paid the bill. When a line finally runs out of time, though, what happens?
In most jurisdictions, judgment liens expire after a certain period. That’s because these liens are obligatory rather than optional. You and the creditor have a set amount of time from the lien filing date to the expiration date to agree on the lien. Creditors may request additional extensions of the lien in various states. However, creditors may need to initiate foreclosure proceedings before the statute of limitations expires in jurisdictions that do not allow such extensions. The lien’s effectiveness is thus prolonged throughout the litigation with help from a bankruptcy attorney.
In the absence of timely foreclosure or enforcement, a lien may be lost forever as a means of collecting on the obligation it secured. If the lien’s term has ended, the creditor must release it. The debtor risks incurring additional charges from the creditor in the form of penalties, fines, and interest. Attorney may assist you in having a lien removed from your property if it has not already been done so.
Lien: What Is It?
A creditor’s allegation that you owe them a lien piece of evidence money on your property or asset. Placing a lien on the property makes it security for the debt. If you default on your loan payments, the lender may exercise their legal right to foreclose and sell the property.
When you allow permission for a lien to be placed on your property freely, such as when you get a mortgage from a bank, that lien is called “consensual.” When a creditor takes legal action for nonpayment.
Tips For Removing A Lien
You may be unable to sell or otherwise dispose of an asset or piece of property with a claim against it until you resolve the difficulties that gave rise to the lien. Instructions for canceling a lien are as follows.
Repay Your Financial Obligations
Paying off a lien on an asset or property is the quickest and easiest way to get rid of it. To remove the lien from your property once you have paid the payment in full, you must file a Discharge a Lien form showing the obligation has been paid.
Discuss Terms With The Lender
A reasonable compromise can be reached with the creditor if both parties are willing to negotiate. Formal or informal processes like mediation and arbitration can be used to facilitate negotiations.
Obtain An Order From A Judge
You might ask a judge to remove a lien if you got it by dishonesty (such as fraud, bad faith, or coercion). However, you’ll need evidence.
Declare Bankruptcy Under Chapter 7
Judicial liens can be eliminated in a Chapter 7 bankruptcy. If you qualify, you can use it to get the lien removed from your property or asset.
A Lien Must Be Allowed To Expire Before It May Be Released.
You may also choose to let the time limit on your claim expire. In other words, after the term has run its course, the creditor will no longer be able to demand payment.
Eliminating Financial Obligations
The quickest and easiest way to get rid of a lien is to pay off the debt to which the lien is attached. However, this option may be out of reach unless you possess the resources to pay off your entire debt. Therefore, you may need to try the remaining possibilities, which can be difficult.
But you don’t have to go through this alone. An attorney will investigate your lien status thoroughly and then write to your creditor to request a settlement. They can also have the creditor sign a release from the Lien form they prepare. After they help you renegotiate the lien, you’ll be able to remove it and protect your property.