Unsecured lien holder preventing sale of real estate??

[psantos]

I just posted another ? If my business partner, has a judgement against him for an unsecured lien. Apparently he is prevented from selling an investment property? Since the judgement is against him. If he files chap 13, will he be allowed to sell the house? The lien is just about what he will net from the sale!! He feels there is no use selling it now to satisfy the creditor, in such a dismal market. He might just hold onto the property for a few years till the market picks up?

[justbroke]

You're talking about a judgment lien. You can have this lien avoided if it impairs an exemption (11 USC 522). You would have to file a motion to avoid lien, and claim the grounds whereby it impairs an exemption available to the debtor.

After successfully avoiding the lien, the would then motion the court to sell property free and clear of liens. However, any proceeds will probably be sucked up by the Trustee and sent to... yes, you guessed it... unsecured creditors. Guess who is now an unsecured creditor? The voided lien.

If you don't avoid the lien and it is attached to property, it will be paid as a secured lien in the Chapter 13 (11) Bankruptcy.