There are 2 ways of dealing with this, depending on the amount of equity you had in your home on the date you filed for bankruptcy in 2012. You could avoid the liens if your homestead exemption was "impaired" by them. That means if the equity in your home, disregarding the other liens, was equal to or lower than the homestead exemption you could claim, the judicial liens would reduce your equity below the maximum homestead exemption, or "impair" your homestead exemption. This requires re-opening your bankruptcy case and filing a motion to avoid the liens. The other alternative is to obtain permission from the judicial lienholders to release the liens in an agreement to repay them from the proceeds of the refinance. Since property values in most areas have increased since 2012, you might have gained enough equity to pay off the liens in the refinance. Consult an experienced bankruptcy lawyer to evaluate your options.
Answered on Jul 26th, 2017 at 6:41 AM