Property laws and individual finances are incredibly complex areas. It is important to know at least some of the technicalities involved with them, however, particularly if you are going through a bankruptcy case. This is because bankruptcy affects both personal finance and property. It is very likely that you will also come across the concept of ‘property liens’ during the process of bankruptcy. A property lien is a type of protection or security that is granted to someone who you owe money to, meaning that they effectively own a little piece of your property. Liens are placed on properties to protect other people, which means they can be incredibly inconvenient for you. Your finances will be far more complicated and making sure you once again gain some degree of financial control is much harder as well.
If you do need to find a way to reorganize your finances or to find some other sort of financial relief, it is very important that you speak to an attorney who can help. Perhaps filing for a Chapter 7 or a Chapter 13 bankruptcy may be suitable for you, enabling you to start afresh in a sense. Perhaps other financial solutions are more applicable to you. You must, however, speak to an expert to make sure things don’t get any worse.
How Does a Lien Affect Bankruptcy?
There are lots of different types of liens in existence, many of which can be placed on a property. State laws will determine which types of debts can and cannot be added to a lien. As such, there are also many different types of liens themselves and filing for bankruptcy will be affected by this in different ways. Some of the liens you may come across include:
- Bail bond liens, which were placed on your property when you had to post bail.
- Child support liens, in case you have not paid your back child support.
- Code enforcement liens, which means that any of the part of your building or property is not up to code.
- Consensual liens, which means you have agreed with someone whom you owe money to, to place a lien on your property.
- Equitable liens, which are liens on the equity in your property meaning creditors will be entitled to it.
- Nonconsensual liens, which means you owe someone money and they have placed a lien on your property in order to make sure that they will eventually receive their money.
These are just some of the different types of liens that can be placed on your property. All of them are designed to make sure someone whom you owe money to will eventually get paid. They may be happy simply to leave the lien in place, making sure they get paid eventually, or they may actually force you to sell the property so that you make your payments. It is also possible that you didn’t even know your property has liens on them. Luckily, a title search will quickly tell you whether any are in place.