Filing for bankruptcy can offer powerful financial relief, but it doesn’t always solve every issue automatically. If a creditor has placed a judgment lien on your home, you may still need to take additional steps even after receiving your bankruptcy discharge.

In this post, we explain how to remove a judgment lien after bankruptcy and protect your home’s title.

What Is a Judgment Lien?

A judgment lien is created when a creditor wins a lawsuit against you and records that judgment against your real property, such as your house. This lien gives the creditor a legal right to collect from the proceeds if you sell or refinance your property.

Even if you discharge the underlying debt through bankruptcy, the lien itself can survive and remain attached to your home—unless you actively remove it.

Does Bankruptcy Automatically Remove Judgment Liens?

No. A bankruptcy discharge wipes out your personal liability for the debt, but it does not automatically eliminate a recorded judgment lien. If the lien is not removed, the creditor could still enforce it against your property in the future.

To fully protect your home, you need to file a motion to avoid the judgment lien during your bankruptcy case.

How to Remove a Judgment Lien Through Bankruptcy

The Bankruptcy Code allows you to avoid (remove) a judgment lien if it "impairs" your right to a homestead exemption—the amount of equity in your home that is protected from creditors.

Steps to Remove a Judgment Lien:

1. Identify Any Judgment Liens:
   Check your title records and credit report to see if any liens exist against your home.
2. Consult with Your Bankruptcy Attorney:
   Inform your attorney about any judgment liens early in your bankruptcy process.
3. File a Motion to Avoid Lien:
   Your attorney will file a motion to avoid the lien in bankruptcy court, showing how the lien affects your exempt equity.
4. Serve the Creditor:
   The creditor must be officially notified and given a chance to object.
5. Obtain Court Approval:
   If the court agrees, it will issue an order removing the judgment lien.
6. Record the Court Order:
   Finally, you must record the court’s order with your county recorder’s office to clear your home’s title.

When Should You File a Motion to Avoid a Lien?

Timing is critical. You have an opportunity to file the motion during your bankruptcy case—preferably before your discharge is entered and your case closes. If you forget (or don’t learn about avoiding liens until after your case is closed) reopening a bankruptcy case later to file the motion is possible but can cost more to reopen your case and complete the lien removal process that way.

Why Is It Important to Remove a Judgment Lien?

If you fail to remove a judgment lien:

• It can cloud your title, making it difficult or impossible to sell or refinance your home.
• The creditor could obtain payment out of your home sale proceeds, even though the underlying debt was discharged.

By properly avoiding the lien, you ensure that your home’s title is clear and fully protected under bankruptcy law.

Protect Your Fresh Start After Bankruptcy

If you are filing for bankruptcy and own a home, checking for judgment liens should be part of your bankruptcy strategy. Removing a judgment lien requires legal know-how, but it’s crucial to protect your most valuable asset—your home.

Limitless Law PLLC can help you:

• File the necessary motions to avoid liens
• Guide you through the entire bankruptcy process
• Make sure your fresh start is truly complete
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Need help protecting your home after bankruptcy?
 

Call Limitless Law PLLC at 360-685-0145 or click here to learn more about working with our firm.

This blog post is for informational purposes only and does not constitute legal advice. If you have questions about your own legal rights and options, please contact the knowledgeable team at Limitless Law PLLC to schedule a strategy session with our attorney. Call 360-685-0145 or click here to learn more.