One of the most powerful tools for achieving a truly fresh start through bankruptcy is the debtor’s power to avoid (nullify) certain liens on his or her assets. The power to avoid liens modifies the general bankruptcy rule that liens pass through a bankruptcy unaffected. Specifically, unless liens are avoided, the discharge only eliminates the personal liability of the debtor, not the liability of the property that is subject to a pre-petition lien.
Lien Avoidance Under 11 U.S.C. §522(F)
There is a common misconception that a bankruptcy discharge automatically results in the removal of judgment liens. Lien avoidance is not automatic. The debtor has the burden to file a lien avoidance action under 11 U.S.C. §522(f). If such an action is not filed all liens on the debtor’s property, even if exempt, generally survive the bankruptcy. Both the bankruptcy courts and New Jersey state courts have the power and authority to remove liens upon proper application.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
