A lien against your property in Texas means that you can lose your home if you are unable to pay off your debt. If you have a lien on your property, you may wonder if bankruptcy can help you remove the lien and save your house.
Bankruptcy does provide relief from many forms of debt. However, liens present a special situation, and the law, therefore, treats them differently. You may be able to remove the lien when you file for bankruptcy, but it depends on a number of factors. Also, unfortunately, you may still lose the house.
Type of lien
According to SF Gate, one of the factors that determines whether you can remove a lien in bankruptcy is the type of lien. Tax debt is one of the few types that bankruptcy cannot discharge, and it can be very difficult to remove a tax lien against a property as well. If your situation meets very specific criteria, it may be possible to remove a tax lien with Chapter 7 bankruptcy. Generally speaking, though, you can expect a tax lien to remain even after bankruptcy discharges your debts.
Perfection of the lien
When it comes to paying off debt, the law requires a Chapter 7 bankruptcy trustee to go in a certain order. In some circumstances, a lender must go through the process of perfecting a lien to give it top priority. While not guaranteed, there is a chance that the trustee could throw out the lien against you if it is not perfected and there is not enough money left over to pay it off after paying the secured debt. Unfortunately, whether or not a lender perfects the lien is completely out of your hands.
The information in this article is not intended as legal advice but provided for educational purposes only.