Lien question after discharge

[capamando]

Hello,

I was talking to a friend who is considering Chapter 7 and the issue of liens came up. As far as I know, once you are discharged you are no longer responsible for what you owe on your mortgages (unless you reaffirmed) however, the lenders can put a lien on the property. What I was not aware of is that credit cards companies can do the same.... is this accurate? One more thing..... can the credit cards cos. or any other lender that were part of the Chapter 7, put a lien on a different property or a newly acquired property not related to the one they have an intererest in?

Thank you for your help

[newbie2]

Hello,

I was talking to a friend who is considering Chapter 7 and the issue of liens came up. As far as I know, once you are discharged you are no longer responsible for what you owe on your mortgages (unless you reaffirmed) however, the lenders can put a lien on the property. What I was not aware of is that credit cards companies can do the same.... is this accurate? One more thing..... can the credit cards cos. or any other lender that were part of the Chapter 7, put a lien on a different property or a newly acquired property not related to the one they have an intererest in?

Thank you for your help

First a couple of definitions: The mortgage is the document you signed upon closing that puts the lien on the home. The note is the document you signed that promised to pay the payments.

In a Chapter 7 the note (debt) is discharged on any secured debt that you don't wish to keep paying (unless you redeem, which I strongly recommend you don't.) The mortgage (the lien) remains, but the lenders only recourse is to foreclose upon that specific property. And no, no lender (credit card company, etc) can put a lien on anything else you own.

[capamando]

Thanks Newbie2,

I understand.... but to be clear.... credit cards companies etc. can place a lien on your property even if you were discharged..... but not on a different property or asset?

First a couple of definitions: The mortgage is the document you signed upon closing that puts the lien on the home. The note is the document you signed that promised to pay the payments.

In a Chapter 7 the note (debt) is discharged on any secured debt that you don't wish to keep paying (unless you redeem, which I strongly recommend you don't.) The mortgage (the lien) remains, but the lenders only recourse is to foreclose upon that specific property. And no, no lender (credit card company, etc) can put a lien on anything else you own.

[HHM]

Credit cards can only place a lien once they have a judgment. Then they must file a judgment wherever it is appropriate to do so to have a lien, usually the county recorders office to lien real estate and secretary of state office for your state to lien personal property.

That is a relatively rare tactic.

If, at the time of fling bankruptcy, the credit card company has no lien, it cannot later get one. Once the debt is extinguished in BK, it is gone. Also, even if the CC company had a lien, in 99% of cases, the lien can be quashed in the BK. Judgment liens can be avoided (that is the technical term) in BK.