Chapter 7 Question

What is the name of your state? Kansas

I purchased a van thru a company approximately like 3-4 years ago, I voluntarily let the van go back, they sold the van for not enough to pay off the loan and have attatched a lien against my home. My attorney says this is an unsecured loan, if I go with a chapter 7 instead of a chapter 13 can this be wiped off my record so the lien is dropped against my home? Or do I have a better chance of filing with a chapter 13?

[HomeGuru]

Originally posted by ksfamily
What is the name of your state? Kansas

I purchased a van thru a company approximately like 3-4 years ago, I voluntarily let the van go back, they sold the van for not enough to pay off the loan and have attatched a lien against my home. My attorney says this is an unsecured loan, if I go with a chapter 7 instead of a chapter 13 can this be wiped off my record so the lien is dropped against my home? Or do I have a better chance of filing with a chapter 13?

**A: first off, you do not have a loan but a lien as a result of a deficiency judgement. Secondly, the lien is recorded on title and therefore secured which makes the lienholder a secured creditor just the same as your mortgage lender but in a secondary position. Third and most importantly, filing BK ( 7 or 13) would not discharge the lien unless your property equity is lower than your first mortgage balance and the property is sold. Or under the same scenario you file a 7, declare homestead and your attorney knows the proper steps to make the lien unsecured and part of the discharge.