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Elizabeth Prentice
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
Satisfied Customers: 174
Experience:  Managing Attorney for one of the largest consumer bankruptcy firms in America.
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Our atty filed a motion to reopen our bankruptcy case that

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Our atty filed a motion to reopen our bankruptcy case that was closed in 2003. There is a lien on our home that was never avoided that we just discovered during a refinance. The old bankruptcy attorney did not complete the motion to avoid. This lien is accruing interest. The judge denied the motion to reopen the case. What can we do? we will not be able to sell our home.
I am a bankruptcy attorney and I would be happy to assist you. Typically, a judge will permit you to reopen the case to avoid the lien. However, if the Judge denies the motion, as in your case, the Court is essentially deeming the lien to be valid and it must be repaid. There are three (3) options now available to you. The first is that you obtain a copy of the lien from your county recorder's office and contact the person or company listed on the lien. Their phone number or address should be listed on the lien. Explain that the debt was discharged in your bankruptcy and that you need them to remove the lien. State that you would be more than happy to show them a copy of Schedule F or D, which is where the lien was listed in your bankruptcy, as well as a copy of your discharge. I suggest you also state that you would be happy to even fill out the paperwork and have pay to have the Release of Lien document filed. You can even suggest that you will file it yourself. There is a 50/50 chance that the creditor will agree to do this, depending on how knowledgeable the creditor is, since they don't have to.

Your second option to negotiate with the lien holder to pay the lien off and then have them remove it. The third option is to negotiate with the lender to have them release the lien in exchange for receiving proceeds from the sale of the property. In both cases you can negotiate to lower the amount of the lien and reduce interest.

I hope my answer has assisted you and that you will leave me a positive rating! Please feel free to request me by name, should you have any questions in the future.
Elizabeth Prentice and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 4 years ago.

Our atty initially contacted the lienholder bank,(the lien was for siding). They did not respond to our attorney. He is currently researching the option of filing with the state court for additional cost to us. Is this a realistic option?

The state court option can be costly. Also, there is no guarantee your suit will be successful. Your attorney fees and the cost of the suit may end up exceeding the cost of the actual lien. This is something to consider. Although the lender has not yet responded to your attorney, give the creditor some time. It would be better to negotiate with the lender than initiating a state court law suit. Further, the state court judge may dismiss the Complaint, since the matter was addressed in your bankruptcy. A state court judge does not have authority to discharge a lien that was already addressed in bankruptcy and he may refer it back to the federal bankruptcy judge. Further, the only option which you will be able to discharge the lien in state court is if the mechanics lien was improper per state court law. It does not sounds like it was, since it was for an improvement on the property. Therefore, a state court action would likely not be successful and would ended up costing you money that you could have put toward paying the creditor to remove the lien. So I would advise the attorney or you to attempt to negotiate with the lender to remove the lien. Although you have an attorney, you are not precluded from contacting the lender yourself. Be aggressive in calling the lien holder, daily if necessary to get a response, that is listed on the recorded lien. Although the bank may hold the lien, the actual person on the recorded document may be an attorney or some other entity. This is the person that needs to be contacted.

I hope my answer has assisted you and that you will leave me a positive rating! Please feel free to request me by name, should you have any questions in the future.