Lien Avoidance

A lien is a claim by a creditor to the property of a debtor. It is designed to assure payment or other satisfaction of a debt. If a person cannot repay his or her debt (or refuses to do so), the lien allows his or her property to be foreclosed on and then sold to provide the necessary compensation to the creditor.

Certain liens that could be collected upon without a bankruptcy filing might be avoidable through provisions of the Bankruptcy Code. This can help a bankrupt individual keep some of his or her property and make it easier for him or her to have a fresh start after filing is complete. While lien law can seem complex and confusing, a New Orleans bankruptcy lawyer from Kervin & Young, LLC can help you determine if some liens in a case can be avoided or reduced.

Liens That Impair Exemptions

In bankruptcy, a debtor is entitled to claim certain property or assets as exempt. This means that a lien that cuts into the value of an exempt asset might be possible to avoid. Some important points on exemption are:

• Chapter 7 bankruptcy usually results in a “no-asset case.” For example, debtors may be entitled to keep items that are necessary for day-to-day living.
• Exemption laws are not the same in every state.
• Retirement savings are frequently exempt (as of 2005, all IRAs are exempt up to $1 million in every state).

Some liens are unavoidable, depending on the type of bankruptcy case and category of the lien in question.

Contact Us

Filing for bankruptcy is stressful, but the New Orleans bankruptcy attorneys at Kervin & Young, LLC can make it a little easier by helping you get a fresh start. Contact us at 504-599-5906 to start the process and find out what assets you are entitled to keep.