Client has a discharged bankruptcy. Beneficial lien remains on the property alter BK.How to remove lien?

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Client has a discharged bankruptcy. Beneficial lien remains on the property alter BK.How to remove lien?

I am the realtor, the property is in short sale (closing in 10 days) Beneficial (Mann-Braken)filed a lien before the client filed BK. The BK was discharged on June 9, 2009. They refuse to remove this lien and are asking the lender to make them an offer. Is this allowed, they are preventing the sale of the property by refusing to remove the lien. The loan was a personal loan.

Asked on June 18, 2009 under Bankruptcy Law, California

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If the lien was placed on the property 90 days or more before the date that the bankruptcy was filed, it remains a valid lien on the property even though the debtor was released from personal liability from the underlying debt by virtue of the dishcarge.  You will have to deal with the lienholder before a sale takes place.  If the lien was placed against the property within90 days of the filing, then the property owner can make demand on the lienholder to release it.  If the lien holder fails to do so and the deal falls through they will open themselves up to a civil suit for damages.


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