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.

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Does bankruptcy eliminate liens?

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