Legal Question in Bankruptcy in North Carolina
I live in North Carolina. My Chapter 7 bankruptcy was discharged in 2004 and I then purchased a new home in 2006. I am now selling my home and the title insurance co. says that the debtors from my bankruptcy can file a lien against the property and are refusing to issue title insurance. Why should this be since I didn't even own the home at the time the bankruptcy was discharged?
1 Answer from Attorneys
The answer to your question as presented is No they cannot. All debt held by a creditor that has notice of filing,(except domestic relations, some taxes, student loans) is discharged. It is, in fact a violation of the automatic stay for a creditor to record or pursue a lien against your after acquired property. If a creditor had a lien prior to filing, the lien must be avoided on the property that you held during the bankruptcy. It does not attach to after acquired property. Tell the title insurance person to contact the home office and the lawyer should be advising them to review the decision.