liens on property

June 11th, 2009 by Questions

Do unsecured creditors, credit cards, put liens on real estate after a specific time fame of non-payment by the debtor, or is this creditor strategy used during the bankruptcy procedure? Or, are liens against owner occupied and/or rental real estate `erased` by the bankruptcy process?

Posted from: Ontario


One Response to “liens on property”

, A licensed trustee said:

No one may simply place a lien on your property, excpet the government for non-payment of taxes. Every other creditor must take you to Court and obtain a Judgment against you. Once they have a Judgment, it will be registered with the Sheriff so that should your home be sold the funds will be paid to the Sheriff to pay off the Judgment.

If/when you file for bankruptcy or a proposal the Judgments are no longer enforceable. The debts don’t go away until you have completed the bankruptcy or proposal, but the Judgment can’t be paid out anymore.

This can get confusing – your best bet is to contact a trustee in your area directly and ask them about this.

Please post a follow up comment below:

(Note: comments are reviewed by moderators and then posted after approval. In addition, due to high volume some of the comments might not be posted.)