Dear Dr. Don,
I have a lien on my house. What can I do?
There are different types of liens that can be placed on a property. The Internal Revenue Service can place a tax lien on the property. Unpaid property taxes can also generate a lien on your property. Also, a contractor can place a mechanic's lien on it to ensure payment for work performed on the property. A judgment lien is created by a court ruling that gave a creditor the right to place a lien on your property for an unpaid debt. Even homeowners associations have been known to place a lien on a property for unpaid association fees.
To remove the lien, you need to settle the lien holder's claim on the property. They will then release the lean. How big a hassle this process is depends on the type of lien and the lien holder. Whether you need to work with an attorney to accomplish the release depends on the type of lien and your willingness and ability to satisfy the lien holder's claim on your property. Most mechanics liens and judgment liens won't result in foreclosure. But some liens, like those for unpaid property taxes, can trigger foreclosure.
You didn't mention whether the lien was part of a bankruptcy process. Bankrate's bankruptcy adviser Justin Harelik has written about getting liens released post-bankruptcy on debts that were discharged in bankruptcy. Also, Bankrate's tax adviser Judy O'Connor has written about the IRS treatment of tax liens.
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