Does bankruptcy eliminate liens?

Yes, bankruptcy can eliminate liens during a Chapter 13 bankruptcy filing in Oklahoma. A lien is a legal claim used to secure a debt, meaning an attached property would be used to pay off the debtor’s debt. During a Chapter 13 bankruptcy, a debtor can reduce or eliminate a lien if the value of the property securing the debt is less than the total amount of the debt. This can be done by filing a motion with the court called a lien avoidance action. The motion requests that the court order the creditor to remove the lien and reduce the balance due to the amount of the debt, which allows the debtor to keep their property. Any remaining debt on the lien can be paid through the Chapter 13 repayment plan. Bankruptcy does not always eliminate liens, however. Liens attached to real estate such as mortgages must be paid in full through the repayment plan and the lien can only be eliminated once the repayment plan is complete. Liens can also be attached to personal property, such as a vehicle, and these cannot be eliminated through bankruptcy.

Related FAQs

What will happen to my co-signers if I file for bankruptcy?
What types of debt can be discharged through bankruptcy?
How do I convert my bankruptcy case from a Chapter 7 to a Chapter 13?
How do I know if I qualify for a repayment plan?
How do I know if I qualify for a Chapter 7 bankruptcy?
What is the difference between secured and unsecured creditors?
What are some alternatives to filing for bankruptcy?
What are the consequences of filing for bankruptcy?
How long does it take to file for bankruptcy?
What is creditor reaffirmation?

Does bankruptcy eliminate liens?

Related FAQs

Related Blog Posts