Legal Question in Real Estate Law in Maryland
Liens on Real Property
In 1984, I purchased a home in Prince Georges County Maryland. In 1990, I filed a partition for Chapter 13, Wage-earner, bankruptcy. In the plan I listed all creditors that I owed money to at the time of filing with the U.S. Bankruptcy court. I was assigned a trustee and a bankruptcy repayment plan was developed and subsequently approved by the court. However, at the time of filing my bankruptcy, several creditors (which were listed in the plan) had already gone to court and received a judgement against me and I now realize my property. Recently, I was attempting to refinance my home when the title company reported that 3 liens were listed in the county court records against my house. My question is this "When I filed for a chapter 13, listed all creditors (including the 3 previously stated) and they were notified of my plan by the court, are the liens they obtained still current? Does my bankruptcy have priority over these judgements? And, should they have been removed after completion of my bankruptcy repayment plan? Please Advise.
1 Answer from Attorneys
Re: Liens on Real Property
The basic principle to understand is that liens do survive bankruptcy unless they are avoided by court order.
Your lawyer probably should have scheduled these creditors as secured and paid them off in the plan. If they filed proofs of claim as being unsecured, they have probably waived their liens. However, if they did not file proofs of claim, their liens are likely still valid.
There may be ways these liens could have been avoided, and you may be allowed to reopen your case to try to avoid them. In particular, they may be avoidable to the extent they impair an exemption. Further, if the liens are secured by property other than or in addition to your principal residence (at the petition date), you may be able to avoid all or part of the liens to the extent they exceeded your interest in the property. If only secured by your principal residence, they cannot be avoided on this ground unless MAYBE if one or more of the judgments is not secured by ANY equity in the property.
You need to consult with a lawyer experienced in bankruptcy law. Many lawyers file a lot of bankruptcies without fully understanding the intricacies of the process, and your situation is an example of what can easily happen.
Daniel Press
Chung & Press, P.C.
6723 Whittier Ave., Suite 302
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