Lien removal in Indiana can be a confusing process. Some liens in Indiana get put on homes through lawsuit judgments. Other liens can come on a property through tax debt or child support arrears. Liens can be removed from a property in Indiana only through a few methods.
The most simple way to remove a lien in Indiana is to simply to pay it off. A lien is a balance of money that must be paid before a property is sold. It simply attaches to your property like a mini-loan or mini-mortgage that must be eventually paid off. Lienholders usually will not force monthly payments or foreclosure. They simply wait patiently, knowing eventually that they will get paid.
To pay a lien by paying it off, you can contact the lien holder such as the IRS or a judgment creditor and get the balance for the payoff. When the lien is paid off, it will promptly be removed with a filing that states that the loan was fully satisfied.
Sometimes you can take legal action to remove a lien. You can petition a local court to reverse a judgment or contest a lien filing. The lien can many times be removed from the power of your local county court. Other times, you may be able to challenge government liens either through an administrative or full court filing. For instance, an accountant or tax attorney may be able to challenge the validity of the debt behind an IRS or Indiana Department of Revenue lien. If your attorney or accountant can challenge or settle tax debt through the administrative system, then your lien could very easily be removed.
Other times, Chapter 7 or Chapter 13 bankruptcy can be another powerful way to take legal action to remove a lien. In both Chapter 7 and Chapter 13, you can many times remove “judicial” liens. These are liens that attached to your real estate after getting a judgment in a lawsuit. If you do not have substantial amounts of equity in your real estate, then you can usually get rid of these liens simply through a Motion in your bankruptcy case. In Chapter 13, you can also get rid of mortgages that are completely “underwater” on your house. If your second mortgage lien is “wholly unsecured,” then you can many times remove the mortgage lien through taking legal action and then completing your Chapter 13 case.
Strangely enough, it is often relatively easy to get a lien creditor to take less than their full amount to settle out a lien. You can sometimes even settle certain liens for as little as 10-20% of the total balance. Even government units will sometimes agree to some parameters or a certain less-than-full-value pay-off amount to remove the lien. Liens have various levels of collection strength. They can be more or less collectible depending on your overall financial situation. If the lien’s collection ability is weak, they will be much more likely to settle for an amount smaller than the full lien value.