Many debtors would like to know the answer to this question. Does a bankruptcy case automatically remove liens against property? The short answer is no. Other than the automatic stay, there is really nothing that is automatic within the confines of a typical bankruptcy case. In fact, when it comes to liens, everything stays in place until such time that an attorney or debtor takes action to try and remove the lien.
For example, let's take a look at liens within a Chapter 7 bankruptcy case.
Chapter 7: Debtors can avoid some involuntary liens (excluding alimony or child support) if an exemption is applicable. Additionally, debtors have the opportunity to remove some voluntary liens under the provided exemptions. An exemption is an allowance of property that a debtor can keep free and clear from any right, title or interest of creditors.
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In the case of a judgment lien on the debtor's homestead, the lien may be removed if the lien impairs the debtor's homestead exemption. Each state has its own exemption amount. Thus, consult with an experienced bankruptcy attorney before attempting to have the lien removed. Further, the process must take place within the confines of a bankruptcy court hearing. It cannot be done outside of the bankruptcy case.
Further, the process of avoiding or removing a lien is one that will require legal maneuvering. I would not attempt to remove a lien without the efforts of an experienced attorney. With regard to real estate, the debtor may need to acquire a market evaluation.
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