Commercial liens are an important part of secured transactions. They give a lender the right to seize a part of property that belongs to a borrower, in case of default. This usually has a negative effect on the credit report of the borrower. So, in order to keep their report clean, they can either fight to dismiss the lien or erase bad credit after their home has been foreclosed.
As a property owner, it is important that you know how to successfully avoid liens. This means ensuring that the person, for example a bank, who placed the lien on your property no longer has a right to it. The only way through which this can happen is through judicial determination. This is because a lien is a legal document that gives the holder a right to your property.
Even though it is not easy to avoid non-judicial or voluntary liens, you can avoid the judicial ones. You can do this through chapter 7 or 13 bankruptcy. This means that most of the heavy lifting is done by your bankruptcy lawyer.
Therefore, before proceeding, inquire from your lawyer if you qualify for the homestead exemption in your state. This is not available in every state. It basically allows you to keep your home and build your life again from scratch. This ensures that everything is not stripped off you in a bankruptcy court.
It is the best way you can completely avoid commercial liens. If you do not qualify, take the next step. Contact an appraisal expert and have the value of your property determined. Note down the amount you owe the lender and any other debts you might have. Forward these details to your bankruptcy lawyer as proof that the market price of the property is less than all your debts. This way he or she can file a motion dismissing any liens against your property.
However, if all your claims get dismissed you do not have to worry. All that is left to do is to erase bad credit. This is because, due to the foreclosure your report will show that you were unable to pay back a loan and that will lower your credit score. It normally takes seven years for a foreclosure to be removed from a credit report. So, you can wait it out. If you are not comfortable with that, you can petition the lender to remove it or argue that it is an error. Both cases are not easy, so you will have to put in it all you got.