When a creditor may not have a valid lien, Chapter 13 gives you a good way to defeat that disputed lien and the claim against your property.
Our last blog post dug into what happens when a creditor does not assert its rights in the lien it has against your property. Or it does so only after your Chapter 7 case is completed. We showed the advantages of dealing with this situation under Chapter 13.
But what if there’s a dispute about whether there is a valid lien? Today we’ll show how, again, Chapter 7 leaves you with some practical problems, while Chapter 13 provides a good solution.
The Creation of Liens on Your Property
There’s a big difference between a debt in which the creditor has a lien on your property and one in which it doesn’t. It’s the difference between the creditor having rights against that property and having none. It’s usually the difference between the creditor being able to take or repossess your property or not. In a Chapter 7 “straight bankruptcy” it’s the difference between having to pay part or all of the debt to keep your property vs. paying nothing.
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