Lien Avoidance

Avoidance of liens refers to using bankruptcy powers to remove a lien from property so that the former lienholder loses rights to sell that collateral to pay the debt.

Glossary Terms: 
Discharge
Judgment
Judgment Lien

Frequently Asked Questions

Our frequently asked questions also address Lien Avoidance:

Can bankruptcy help if I pledged my household goods as collateral?

Sometimes, a financing company will ask a borrower to sign papers pledging various household property (such as furniture, televisions, and appliances) as collateral to secure a new loan. Done properly, the creditor then has a legal right to demand turnover of the existing household property if the loan goes unpaid.

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Blog Posts

We have discussed Lien Avoidance in the following posts on our bankruptcy blog:

Avoiding Judgment Liens with Bankruptcy

Jan 3, 2012

A judgment is effective as a lien against all of the judgment debtor's real property in the county of the judgment or any other county where the judgment has been transcribed into the official records. The lien is effective both with respect to property owned at the time of the judgment, as well as property acquired after the judgment. A bankruptcy discharge will void the future application of a judgment, preventing it from attaching to property acquired after bankruptcy. However, a discharge does not itself get rid of an existing judgment lien.

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