“An Aurora Colorado lien is a legal right granted by the owner of the property, law or otherwise acquired by a creditor. A lien serves to guarantee an underlying obligation, such as the repayment of a loan. If the underlying obligation is not satisfied, the creditor may be able to confiscate the asset that is the subject of the lien.”
However, no one wants to lose their money including lenders. The risk of loss is especially great when the loan involves a big purchase like a car or a house. Lenders mostly minimize this risk by requiring the borrower to agree to relinquish the property under the lien to the lender. The creditor will be able to take the purchased property or another agreed property and sell it at auction publicly. It’s used to pay down the outstanding loan balance.
In most cases, if the auction price is less than what it’s owned then the borrower will remain responsible to pay for the outstanding balance of the debt. It is a deficiency of balance.
Important Terms of Liens
Here are following some other important terms you should know:
- Secured Debt. When a creditor has a lien guaranteeing payment of a loan, the obligation is a secured debt.
- Unsecured Debt. By distinguish, an unsecured debt, such as a credit card balance, is one in which the borrower is not required to guarantee payment by putting up the property.
- Collateral. The property guaranteeing a debt – collateral. The creditor’s lien interest in the collateral exists until the borrower pays off the debt balance. The lien gives the creditor the right to repossess or foreclose on the collateral if you don’t make payments when the payments are due.
Types of Liens
- Voluntary liens are deeds of trust, mortgages, and home equity lines of credit; a borrower normally grants liens to secure a loan are Voluntary Liens.
- Judicial liens arise from judgments in lawsuits called the judicial liens.
- A statute creates statutory liens in the law; property tax liens and tax liens are the most common statutory liens.
Chapter of Liens
The only liens can be stripped in Bankruptcy Chapter 7 are judicial liens that impair an exemption the debtor is otherwise entitled too. In bankruptcy Chapter 13, a reorganization chapter, every kind of lien can reduce to the value of the collateral to which it attaches. On principal residences, there is an exception in protecting mortgage liens.
Value of the Collateral in Liens
The power to strip liens in bankruptcy designed to ensure that the debtor gets a measure of exempt property and that liens that are worthless at the filing of the case are eliminated. The value of the lien looks at the market value of the property personal or real to which it attaches, and the amount of any liens that attached to the property before the lien evaluating for stripping in the Liens.
How Do Liens Affect You in Aurora Colorado?
A lien on your house in Aurora Colorado means that you can’t sell the property until the lien removal. You could also be restricted from obtaining a mortgage or a home equity loan in the future. In short, order, we can say that your property can be subject to legal liability. It means that your house sells out and the takings used to pay off your debt. This Can negatively affect your credit, which makes it almost impossible for you to sell the property or get approval for a home equity loan. If you need any assistance regarding the removal of Liens then contact an experienced bankruptcy attorney in Aurora Colorado.
How to File a Lien Aurora Colorado?
You can file a lien statement in the Aurora county clerk’s office and the county recorder’s office. According to legal, law “CRS 38-22-109,” the lien statement must contain the name of the owner of the property, the name of the person claiming the lien, a description of the property and the amount owed. This document must be notarized. Seek the assistance of bankruptcy attorney to file a lien in Aurora Colorado.
How to Remove a Lien Aurora Colorado
A lien against your property will prevent you from selling it until the debt is paid in total. Here are the following steps to take to remove the claim of the lien holder against your property.
- You make sure the debt the lien represents is valid.The Attached lien if you don’t believe you owe the debt then you may consult with an attorney.
- You pay off the debt.If the debt is valid then pay the creditor in full payment. If you work with an experienced attorney, you may be able to negotiate a lower payoff amount payment.
- You should fill out a release-of-lien form.You can find lien release paperwork online. If not, try the county clerk’s office or an attorney.
- Have the lien holder should sign the release-of-lien form in front of a notary.The lien holder should sign the document in the presence of a notary public.
- You should file the lien release form. File the lien release form at the county recorder’s office, at which point it becomes public record. You may have to pay a small fee to file this lien release form.
- Ask for a lien waiver, if appropriate.A lien waiver is a document from a contractor showing that you have paid for the work in full and waiving all future lien rights of the contractor in the work or equipment.
- You should keep a copy.You will want to have a copy of the release form for your records at the end.
If this all seems too confusing simply request a free consultation with Barry Arrington.