Many debtors who are filing for Chapter 7 or Chapter 13 bankruptcy have one or more liens on their personal assets. The most common questions about liens during bankruptcy are 1) What is a lien? and 2) Can filing bankruptcy get rid of a lien? To answer the first question, a lien is a legal interest of a creditor in a particular asset. For example, a lender who has loaned a debtor money to buy a car, has a lien on the vehicle. Filing bankruptcy does not remove any existing liens (including a lien on a car) unless the judge orders the removal of a lien. But, what a bankruptcy will do is eliminate the debtor’s personal responsibility to repay the loan/debt. In the case of a car, the lien holder can still repossess the vehicle after the bankruptcy has been discharged; but the lien holder cannot force the debtor to pay any of the remaining loan balance before or after the car has been auctioned.

If you have a lien against your wages or a bank account speak with a bankruptcy attorney to find out what actions, if any, can be taken to negotiate the removal of these liens.

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