Dear Bankruptcy Adviser,
My ex-wife was sued by a hospital and the hospital put a lien on my house. The house was given to me as part of our divorce. She filed bankruptcy and included this debt, but did not have the lien removed. Can I do anything at this point?
This is a great question. This is a much more common issue than most people would think. As you are now learning, listing a debt in a bankruptcy case does eliminate one’s liability to pay on that debt. However, a lien placed against property prior to the bankruptcy filing has to be addressed in a separate motion while the bankruptcy case is still pending.
Here are the likely facts of your ex-wife’s case. Your ex-wife went to the hospital prior to the bankruptcy filing and did not pay the outstanding bill. The hospital sued her, obtained a judgment and placed a lien on this property.
She then filed bankruptcy, but failed to file a motion with the court that would have removed the lien. She likely had the right to do that and would have been successful, but she either did not know she had to or did not know that the lien existed.
The part for me to emphasize is that the divorce has nothing to do with this issue. As I have written many times before, the hospital had nothing to do with your decision to get divorced. Your wife was the owner of the property. She did not pay the hospital bill. The hospital sued her and placed a lien on her property. Simply because the family law court awarded you the house does not mean that your ex-wife’s creditors get left out.
There is a likely resolution to this issue. Your ex-wife needs to file a motion with the bankruptcy court to reopen her bankruptcy case and file a motion to remove this lien from the property. The process is not very complicated and she has grounds to reopen the case since she likely did not know of the lien prior to filing for bankruptcy protection. The court will more than likely allow her to reopen the case for the single purpose of filing a motion to remove the lien.
The entire process — to receive the court order reopening the case and then the next order removing the lien — would take approximately 45 to 60 days.
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More On Home Liens And Bankruptcy:
- Removing liens takes more than bankruptcy
- Will divorce release me from home lien?
- What to do if there's a lien on your house