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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2900
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I have a secured lien on a property that a guy has filed bankruptcy,

Customer Question

I have a secured lien on a property that a guy has filed bankruptcy, however he is planning on keeping that particular house to live in and letting about six others go, along with several cars. I am the second on the property and he has named me in the bankruptcy and also has two other claims from his lawyers on this property that were not there when we signed the promissary note. Can he charge off my debt and still keep the house? Can his lawyer put a large third on it to block my ability to purchase if we go to forclosure?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 years ago.
You cannot collect on the debt unless it is reaffirmed. However, your lien can still remain on the property, so you can get paid once they sell or refinance. Liens are paid in the order they are put on, so yes, he could grant a lien to his attorney. This in no way blocks your ability to purchase. If the attorney lien is valid (and it should be assumed as so otherwise the bankruptcy trustee may be interested in it) then that may remain as well.

You could foreclose the loan, but you would need to pay off the first, and pay off any other liens once your lien is accounted for if there are enough proceeds, however, costs to foreclose can get pretty pricey.