Legal Question in Bankruptcy in Virginia

Fallout from Bankruptcy

Does a valid lien on a piece of property pass to a third party in a chap 7 bankruptcy? In other words, if you sell something to someone and it has a lien and then you go bankrupt does that lien pass on to them. I thought they did not pass to third parties such as bankruptcy trustees.


Asked on 4/24/08, 9:26 am

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Fallout from Bankruptcy

A lien stays attached to the property, and passes through the bankruptcy. So if you sell an asset that is subject to a lien, with few exceptions the lien stays with the asset, and your bankruptcy does not affect the lienholder's right to proceed against the asset.

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Answered on 4/24/08, 10:23 am


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