Bankruptcy?

Question

I am a nj resident and I own a home that is appraised at $320,000. I have a mortgage of $240,000 and a judicial lien of $60,000 on the home. They are forcing a foreclosure because of the judicial lien and I want to somehow get rid of the lien. Should I file for bankruptcy. NOt sure if Chapter 7 will help because the judicial lien is a secured claim. Also, not sure if Chapter 13 will help because I will have to pay back the $60,000 and max they allow is 5 year repayment plan and so I will have to pay $1000 each month. Any way around this? Do they allow me to pay less than $60,000 if I file CHapter 13? Can I get rid of the lien in Chapter 7? ANy help is really appreciated. Thank you.

Answer 1

I agree with Ray and Just Carl, you should contact an attorney to handles bankruptcy in New Jersey.

http://www.nacba.org/attorneyfinder/search.php?l=nj

Bankruptcy should be you last resort to stop the foreclosure from taking place. Depending on the time when the foreclosure is set, you may want to try to refinance your house to pay the lien off, you have enough equity in the house.

http://www.assetprotectionbook.com/NJ_Schick_2004.htm

http://www.njb.uscourts.gov/chambers2/burns/04gb001p_00-15864_03-13458_James-Allen.pdf

http://www.nywb.uscourts.gov/decisions/jcn/42_In_re_EVAUL.pdf

Answer 2

Your question can only be answered by a qualified and experienced bankruptcy lawyer that practices in the state of New Jersey. Every state has its own laws on bankruptcy. It sounds like you have enough equity in the home to pay that $60,000 lien so the court may recommend selling the home and paying the lien or getting a home equity loan on the amount owed for the lien. It doesn't make sense to file for bankruptcy on $60,000 with a $320,000 home. Perhaps it's time to reduce your lifestyle to a more liveable scale and invest in your future. There are millionaires out there living in modest homes, driving older cars, and wearing Kmart clothes. It's the people who look rich that are financed to the max. Take a look at your situation and bail out of things you don't need. You may be able to sell some assets, reduce some liabilities and start fresh with a life more suited to your income. Bankruptcy is not always the answer to debt problems... peristence is!!!

Answer 3

Section 522(f) of the Bankruptcy Code does allow for the removal of a judicial lien in a Chapter 7 case if the lien impairs your homestead exemption. You may also be able to remove the lien in a court-approved Chapter 13 repayment plan.

You MUST consult local bankruptcy attorney who knows bankruptcy and the homestead exemption laws for your state. Filing bankruptcy will NOT automatically remove this lien and you must follow the proper procedures. Most attorneys will give a fee initial consultation.