LEIN on Property, In Bankruptcy. Please Help. Closing Soon.

I did not know if this was a topic for the legal section, or the pre-foreclosure, so I listed in both. I hope no one gets mad. :slight_smile:

I am hoping someone can give me some help with this one.
I am buying a house from a lady that recently had a bankruptcy. There is a lein on the home from Bennificial for a personal line of credit (unsecured debt) in the ammount of $8000. The account was clearly included in her bankruptcy, but Bennificial got a judgement on the property before she filed BK. The title company says I got to pay it unless it is removed. The lady’s lawyer says he can get it off, but wants to charge her $700 to do it. She doesn’t have any money, so that means I have to pay it. I don’t want to have to pay an additional $8000 for the property to make sure I get the closing costs back that I am paying on behalf of the seller. Is there a way I can get it off with out paying the lawyer?

Howdy Ron:

The debt was secured by the judgment lien prior to her filing for BK protection. Secured debt does not go away automatically because of a BK. It attaches to the property. You may be able to get them to settle for less but they will have to be dealt with to get a release. The debt could have been"wiped out" if they had not gotten the judgment.

Thanks Ted.
What is the best plan of attack to get them to settle?

Howdy Ryan:

I am afraid to offer too low when I deal and usually end up leaving money on the table. Just the last deal I did I bid $26K on a defaulted $36K loan and got a yes in hours. It was a first lien on a run down house but I know I could have done it cheaper, but it still works for me. I am pretty sure you can get it for 50% so you may try 20% first, maybe just the $700 you were going to pay the attorney. Keep in mind I am not an attorney so no legal advice. It has to be a win deal for all involved even if someone is losing money at least they get some and sooner. LOL