Avvo Legal Answers by Attorney Tim Theisen

As a contributor to Avvo Answers, Attorney Tim Theisen provides legal advice relating to his practice areas of consumer bankruptcy & debt, and family law.

Q: How do I remove a lien from my property title?

My husband and I had a business that went bankrupt, along with ourselves back in 2004. We lost everything and should have let the house go with it, but because we had young kids, we did not want to relocate with everything going on so we held on…

A: Timothy’s Answer

It’s unclear to me what type of lien this is – it’s either a judgment lien or a mortgage lien.
If it’s a judgment lien, there is a fairly simple process you can go through to get the judgment deemed discharged in light of the bankruptcy, which would then remove the lien. But it’s my understanding that under title standards, judgments are only valid for 10 years, so if it is a judgment lien, you probably shouldn’t have to go through that anyway if you have an underwriter to understand things.

If it’s a mortgage lien, even though your personal liability may have been discharged, there isn’t a simple way you can get that removed. If your house is still worth less than what you all on the first mortgage, you might be able to get it removed by way of filing a chapter 13 and doing a lien strip.

You should figure out what type of lean this is, and then talk to a good attorney.

Looking to stay in the property for hopefully another 3 months or so…

I am currently in the 4th month ‘postponement’ cycle. May 1st (sheriff sale) is the last Day to get current on the mortgage with June 1 as my scheduled move out date. It is very feasible that I will be able to come current with the arrears, however, a couple more months would give my family time to help me pay. My question is this- and I’ve had trouble finding a concrete answer- ” does/would a ch 7 postpone the sheriff sale ‘again’ 2-3 more months & if so, would the lender (TCF) be required to let me become current if I have $.

Timothy’s answer

A chapter 7 would stop the sheriff sale, and the mortgage company would not be able to recommence a new foreclosure until the stay expires, which is usually 90 days unless they move to lift the stay, which happens less than 20% of the time. Even after the 90 days, it’s usually another 3 to 6 months before you end up back in foreclosure. So if that’s all the time you need to catch up (keeping in mind the reinstatement figure will increase with every month’s payment, not to mention additional interest & fees) then a 7 might be the way to go. There’s more to the analysis than that, but that answers your question.

How can I get a bank to remove me from a mortgage/HELOC after a divorce?

How can I get a bank to remove me from a mortgage/HELOC after a divorce? My ex-owns the property, per our final decree, and the debt is causing my credit rating to plummet. The bank is refusing to remove my name.

Timothy’s answer

If your ex is making the payments, that shouldn’t affect your credit, so I presume they are not.
The simplest thing to do is to pay it off and ask your ex to pay you back. Your other options are even less attractive. If your ex isn’t making payments, you can ask the family court to grant some sort of relief, including ordering a sale, if the decree provides for such a remedy, and there is equity. You could ask your ex to refinance, but that may not be feasible either if their credit is poor and there is more than an 80% loan to value ratio.

Will the trustee take back the money I used to pay a co-signed student loan off in a chapter 7 case?

I recently paid off a student loan over the last year in the amount of $4000. My dad is a co-signer on it. I was recently served with a lawsuit and will very likely be filing chapter 7. Are my student loan payments considered “preferential” because my dad co-signed on the loan? I’m very confused because I never paid any money to my dad – it was to my loan servicer and it was from my money. But I read on the internet that my paying back this loan could “benefit an insider” though. I’m confused.

Timothy’s answer

I would not anticipate this would happen. Your dad didn’t benefit from the student loan in the first place, so even though you relieved his debt load, I don’t think even the most aggressive trustee would try to pursue this.

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