How do I get a lien released against my home since I was in bankruptcy?
Full Question:
Answer:
The answer will depend in part on the terms of the divorce decree. In a divorce, the judge typically assigns the debts of the parties in the final property settlement. I am unable to determine who is responsible for payment of the debt creating the lien. If it was assigned solely to you, it is possble it may have been discharged in bankruptcy or qualified for an exemption. If you decide to pay off the lien, a release of lien form may be filed in the land recorder's office that will remove the lien from the property. I am unable to determine if an error was made in the bankruptcy that would justify an appeal. I suggest you contact a local attorney who can review all the facts and documents involved.
When you file bankruptcy, you are required to fill out quite a few bankruptcy papers. Among these are Schedule C, which is a form where you list the property you are claiming should be exempt.
Both federal and state laws provide exemptions for certain property that a debtor is allowed to claim as exempt. What property is eligible for exemption status varies from state to state; however, some states allow you to choose whether to use the federal exemptions or your state's exemptions. After a person files bankruptcy, certain exemptions may apply to prevent a creditor from claiming the debtor's property.
The State of New York has exempted the property below from seizure by the bankruptcy court to pay creditors:
§ 5206.
Real property exempt from application to the satisfaction of
money judgments.
(a) Exemption of homestead. Property of one of the
following types, not exceeding fifty thousand dollars in value above
liens and encumbrances, owned and occupied as a principal residence, is
exempt from application to the satisfaction of a money judgment, unless
the judgment was recovered wholly for the purchase price thereof:
1. a lot of land with a dwelling thereon,
2. shares of stock in a cooperative apartment corporation,
3. units of a condominium apartment, or
4. a mobile home.
But no exempt homestead shall be exempt from taxation or from sale for
non-payment of taxes or assessments.
(b) Homestead exemption after owner's death. The homestead exemption
continues after the death of the person in whose favor the property was
exempted for the benefit of the surviving spouse and surviving children
until the majority of the youngest surviving child and until the death
of the surviving spouse.
(c) Suspension of occupation as affecting homestead. The homestead
exemption ceases if the property ceases to be occupied as a residence by
a person for whose benefit it may so continue, except where the
suspension of occupation is for a period not exceeding one year, and
occurs in consequence of injury to, or destruction of, the dwelling
house upon the premises.
(d) Exemption of homestead exceeding fifty thousand dollars in value.
The exemption of a homestead is not void because the value of the
property exceeds fifty thousand dollars but the lien of a judgment
attaches to the surplus.
(e) Sale of homestead exceeding fifty thousand dollars in value. A
judgment creditor may commence a special proceeding in the county in
which the homestead is located against the judgment debtor for the sale,
by a sheriff or receiver, of a homestead exceeding fifty thousand
dollars in value. The court may direct that the notice of petition be
served upon any other person. The court, if it directs such a sale,
shall so marshal the proceeds of the sale that the right and interest of
each person in the proceeds shall correspond as nearly as may be to his
right and interest in the property sold. Money, not exceeding fifty
thousand dollars, paid to a judgment debtor, as representing his
interest in the proceeds, is exempt for one year after the payment,
unless, before the expiration of the year, he acquires an exempt
homestead, in which case, the exemption ceases with respect to so much
of the money as was not expended for the purchase of that property; and
the exemption of the property so acquired extends to every debt against
which the property sold was exempt. Where the exemption of property sold
as prescribed in this subdivision has been continued after the judgment
debtor's death, or where he dies after the sale and before payment to
him of his portion of the proceeds of the sale, the court may direct
that portion of the proceeds which represents his interest be invested
for the benefit of the person or persons entitled to the benefit of the
exemption, or be otherwise disposed of as justice requires.
(f) Exemption of burying ground. Land, set apart as a family or
private burying ground, is exempt from application to the satisfaction
of a money judgment, upon the following conditions only:
1. a portion of it must have been actually used for that purpose;
2. it must not exceed in extent one-fourth of an acre; and
3. it must not contain any building or structure, except one or more
vaults or other places of deposit for the dead, or mortuary monuments.