Will BK clear utility bill?

[itsdavetime]

I have a utility (water/sewer) bill, which has around a $600 balance on it. A lien has been filed against the home. Will chapter 7 wipe out the debt owed to the utility company and remove the lien? (The utility was included as a creditor).

Thanks

[HHM]

Yes and no.

Yes, it will wipe out your personal liability to the debt.
No, it will not remove the lien.

Sorry.

[itsdavetime]

How would I remove the lien?

[newbie2]

How would I remove the lien?

When you sell the home the lien would come out of any proceeds. (It will come up on the title / lien search)

Or you could pay it to have it removed prior to that if you wish.

[HHM]

Sorry to say, bottom line, you will need to pay it to remove it. These utility liens often times take priority over your 1st mortgage (that is a question of state law). There is no mechanism in chapter 7 to strip or cram down such a lien.

[itsdavetime]

If the BK will discharge the amount owed, why would I pay?

When you sell the home the lien would come out of any proceeds. (It will come up on the title / lien search)

Or you could pay it to have it removed prior to that if you wish.

[newbie2]

If the BK will discharge the amount owed, why would I pay?

As I said above, when you sell the home you will be paying it. You asked how to remove the lien. Only way to remove it is to pay it, either now or later when you sell.

[DebtHater]

As has been said, the discharge releases you from the liability. If you ever want to sell your house the lien must be satisfied. If you pass prior to selling the house then your estate will have to satisfy the lien.

[dumpinmydebt]

Yes, the lien will stay on the house until it is paid. The BK has nothing to do with the lien.

[patchessl]

what about lien foreclosure?

Alrighty! This is one of the questions I came here looking for insights on.

OK, so the chap 7 removes personal liability for the debt.

The lien remains. What if the utility decides to exercise it's right to foreclose for non-payment? Any one know if they can still do that after discharge or do they have to wait for the sale of the property?

If you pay the regular monthly bills does the portion filed on just linger in lien until you sell?

Does the debt accrue interest in the interim?

Do the utilities attorneys fees survive the chap 7? (Those are why it's sky high now)

Looked high and low for Washington state law on this and no luck yet (found the statute giving them right to foreclose).

Thank you, spent last 5 days reading and so far this site is uber-helpful!

[HHM]

Alrighty! This is one of the questions I came here looking for insights on.

OK, so the chap 7 removes personal liability for the debt.

The lien remains. What if the utility decides to exercise it's right to foreclose for non-payment? Any one know if they can still do that after discharge or do they have to wait for the sale of the property?

If you pay the regular monthly bills does the portion filed on just linger in lien until you sell?

Does the debt accrue interest in the interim?

Do the utilities attorneys fees survive the chap 7? (Those are why it's sky high now)

Looked high and low for Washington state law on this and no luck yet (found the statute giving them right to foreclose).

Thank you, spent last 5 days reading and so far this site is uber-helpful!

That is more of a question of state law than bankruptcy law. At a minimum, they would need to wait until after discharge or file a Motion to Lift the Automatic Stay (not likely over $600).

[trigabyte1]

I would be very surprised if the utility decided to foreclose to satisfy the lien. First, the costs would be more than the amount they would recoup. Plus, they'll probably have to fight it out with your mortgagee(s) as they would much rather see you continue to pay your mortgage and get the interest.

Second, in many states a non-mortgage lien cannot be used to bring about foreclosure. For example, when a municipality brings sewer service to a new area people either pay to get connected or they get connected by the muni and have a lien placed on their property. I've never seen anyone forced into foreclosure by one of those liens.