I Have a Judgment Lien on My home in Walker, MN

Most of the time, it is a wonderful thing to have equity in your home.  There is a sense of pride in it and it can be considered an investment that will someday pay off.  Sometimes, though, the fact that you have equity in your home is like blood in shark infested water.  If you have an unsecured debt (such as a credit card) that went unpaid and a creditor received a judgment, that creditor could put a judgment lien on your home.  That means if you sell your home, that creditor could get a portion of the equity in your home. Is there any way to protect the equity in your home in Walker, Minnesota?  Do you have any options for getting rid of the debt and the lien? How do you fix this and get your life back?

What impact does a judgment lien have?

Sometimes before you sell your home, the title company will require any liens to be removed before the sale can take place.  You may not be planning to sell your home anytime soon, but at some point, in the future, you know that you would want to and you are trying to get things in order and prepare for that process.  The judgment lien is one thing you know is a possible hindrance. You want to be proactive, but you are not quite sure what to do, how to get started, or what options you have other than just paying the underlying debt.

What are the other possible impacts?  How can a creditor collect on the judgment lien on your home in Walker, Minnesota?  The creditor likely will not force the sale of your home. If the home is used as your primary dwelling, the creditor can only collect on the amount (after other primary debts like mortgages are paid) that is not exempted by the homestead exemption (a fixed dollar value in statute-currently $390,000), which makes forcing the sale of your home an unattractive one for the creditor.  What about after you voluntarily sell? Can the creditor collect the proceeds to satisfy the judgment? So long as you use the proceeds to purchase a new home within a year, the proceeds do not lose their homestead exemption. What does this mean? It means that if you use the proceeds from the sale to purchase a new home within a year, the creditor cannot collect the proceeds to satisfy the judgment.  Can the creditor then attach the lien to your new home? Yes, that is a possibility.

Can I file bankruptcy to get rid of the judgment?

Paying the debt is a possible option to get rid of the judgment lien.  Perhaps the creditor would be willing to negotiate a settlement. But there are ramifications for that at tax time so if that is a viable option for you, it is best to speak with an attorney first.  But what happens when paying off the debt is not a possibility? Is there any other way out? There is! You may want to consider a Chapter 7 bankruptcy, depending on the rest of your financial situation.  It can alleviate not only the stress of the judgment lien, but other unsecured debts as well. The actual bankruptcy gets rid of the underlying debt and then we can focus on getting rid of the judgment.

At Kain & Scott, we make the bankruptcy process as painless as possible.  It starts with a free consultation with one of our attorneys. After that, we pull your credit and asset report for you and put together a draft petition and schedules (the documents that get filed with the bankruptcy court).  That’s right, you do not get sent home with a bunch of worksheets to fill out and bring back. You come in for a two-hour appointment called a Review and Sign appointment, which is where we go over everything in the petition and schedules with you to ensure everything is complete and correct before it is filed.  After this appointment, your petition is usually filed within three to four business days. Filing is the action that stops collection efforts by creditors. You do need to complete two credit counseling courses (one before you file and one after), which you can complete either online or over the phone.

Approximately four to six weeks after filing you will have what is called a 341 meeting (or more affectionately known as a “meeting of the creditors”).  Creditors do not usually show up to this meeting. Your attorney is with you and you meet with the bankruptcy trustee, who is just a neutral attorney that oversees your bankruptcy case.  The trustee will ask you questions based on information in your petition and schedules to verify that the information is true and correct. The meeting lasts from five to ten minutes. The location of the meeting depends on the county where you live.  

If you have filed a Chapter 7, you usually get your notice of debt discharge about two months after your 341 meeting.  

After I get rid of the debt, does the lien go away?

The debt goes away, but there is an extra step to get rid of the judgment and the lien.  I bet you are wondering how much Kain & Scott charges you for that service. I think you will like the answer—NOTHING!  That sounds like music to your ears I bet. The judgment and the lien can be taken care of as part of Kain & Scott’s FREE 90-day Credit Repair Program.  The only cost to you would be the actual cost of the judgment removal. There are no attorney fees involved. In addition to the relief from the judgment and lien, you will be provided with other valuable tips and tricks to repair your credit post-bankruptcy FOR FREE.

The road to judgment-free life begins with a call to Minnesota’s Nicest Bankruptcy Firm, Kain & Scott.  You can contact us by phone at 800-551-3292 or via our online chat at www.kainscott.com.  Don’t wait to get your life back, call us today!

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Kain & Scott, P.A.
211 4th Street South
Brainerd, MN 56401
218-822-3300