Does bankruptcy eliminate liens?

In Kansas, bankruptcy can help individuals and businesses reduce their debts, but it does not eliminate liens. A lien is a legal claim to property that creditors can file to secure payment of debt. Liens attach to property owned by the debtor and can be enforced through foreclosure or repossession, depending on the type of lien. Under Chapter 7 and Chapter 13 bankruptcy, liens cannot be eliminated with a bankruptcy discharge. However, bankruptcy can help reduce certain types of liens. For example, with Chapter 13 bankruptcy, the court may allow you to reduce a lien on your home if the market value of your home is less than what is owed on the mortgage. If you have a secured loan, such as a car loan, you may be able to keep your property by staving off the lien holder by filing a Chapter 13 bankruptcy. This will allow you to make payments to the lien holder over a three to five year period and can result in a lower interest rate. Additionally, in a Chapter 7 bankruptcy, you may be able to reduce or eliminate a junior lien such as a home equity loan. This means the lien holder can be forced to accept a lower amount to settle the debt. In Kansas, bankruptcy can help reduce the burden of debt, but it will not eliminate liens. Generally, liens must still be paid off or settled in order to gain full ownership of the property.

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Does bankruptcy eliminate liens?

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