If you’ve had a creditor place a lien on your home or another piece of property, you’re certainly not alone. Here in Chicagoland and all across the country, homeowners face a variety of liens, stemming from judgments, unpaid taxes, contractor’s fees, and more.
In short, a lien is a mechanism that a creditor can use as legal claim to, or a charge against, your property, in order to secure payment or performance of an obligation from you, the debtor. With a property lien in place, a creditor may be able to seize the named asset as payment. In other cases, having a lien on your property puts a creditor in a position to take legal action against you, or claim their spot as “first in line” for payment if the property is sold.
In addition to running the risk of having your property seized, liens can cause other inconveniences, as well. For instance, liens are a matter of public record, and serve as a notice to other creditors that there are existing claims on your assets; this can make it significantly harder (or even impossible) for you to sell the property, or obtain new financing for a future purchase, until the lien is removed.
As a debtor facing the prospect of having a lien placed on your property, it’s important to understand all of your options — including the steps you can take to remove the lien.
So, what can you do as a debtor to have a property lien removed? While everyone’s circumstances will be unique, there are a few broad options to keep in mind — and discuss with an experienced legal professional:
Satisfying the Debt
Broadly speaking, one of the most effective ways to remove a lien is to pay the debt that is owed. You may be able to negotiate for a lower payoff amount, or be required to pay the debt in full. In either case, once you’ve paid the amount owed, you will then typically be required to complete and file some essential paperwork, including a release of lien form, signed by the lien holder and officially notarized.
Seeking a Court Order to Remove the Lien
If you have reason to believe that the lien illegitimate, or has been obtained through improper means (such as fraud, coercion, or bad faith), then you may be able to go to court in order to have a judge remove the lien from your property. This process can be complex and difficult to navigate, so it may be important to work with a knowledgeable local attorney to help ensure that you’re taking the proper steps.
Negotiating a Resolution With the Lien Holder
In some cases, you may be able to privately work out a settlement with the lien holder, whether through informal negotiations, mediation, or arbitration. It’s important to bear in mind that both parties will ultimately need to come to an agreement on terms — and be able and willing to abide by them moving forward. It may help to have a skilled negotiator on your side, such as an experienced local real estate or bankruptcy attorney.
Lien Avoidance In Chapter 7 Bankruptcy
In some cases, bankruptcy may be a viable path forward for those seeking a fresh financial start — including a practical way for discharging many different types of debt. Certain types of liens may be dischargeable in Chapter 7 bankruptcy thanks to a concept known as “lien avoidance,” allowing you to retain possession of your property. It’s important to bear in mind that not everyone will qualify for Chapter 7 bankruptcy; it’s also key to note that only specific types of liens may be lifted, and only then in certain circumstances. Consulting with a local bankruptcy attorney can help you gain more insight into your specific situation, and understand all of the options available to you.
Understanding All Of Your Options
Removing a lien can be a complex and time-intensive process — and it helps to go in with an experienced, professional partner on your side. A local real estate or bankruptcy attorney can help you understand the terms of your lien and offer guidance tailored to your specific situation, while also providing insight and support for the many other moving pieces that are sure to come up along the way.
For anyone seeking more information on understanding, addressing, or removing property liens, consulting with an experienced attorney may be a logical path forward. A legal professional can help demystify these key concepts and discuss specific, actionable solutions designed to suit your needs.
If you have any more questions about liens or any other aspect of bankruptcy, real estate, or personal injury law in Chicago, don’t hesitate to reach out to the attorneys and staff of the Gunderson Law Firm to continue the conversation. .
At the Gunderson Law Firm, our team possesses unparalleled expertise and insight, reinforced by years of experience and long-term connections throughout Chicago’s real estate, finance, and insurance industries. The Gunderson Law Firm represents a wide range of clients — individuals and companies, small and large, national and local — who turn to us for effective legal representation and informed, objective advice. Drop us a line online or by phone whenever you’d like to keep the discussion going.