How Long Does a Lien Stay on a Property

[stellac1776]

My question involves collection proceedings in the State of: Indiana

Back in 2015 and 2016 we were sued for unpaid credit card debt. There was no way we could work out any payment plan, had no money, only asset was house and property it sat on. So the companies put liens on the property and house.

None of them have ever tried to collect on the debt. We are in our 70's and would like to sell the house and find a smaller place. Someone told us that liens can only stay on property for so many years. Have heard 5, 7 and 10. Is this true in INdiana and if so, how many years and how do you get the lien released? Thanks.

[Zigner]

After a brief bit of Google-fu, it appears that a judgment is valid for 20 years in Indiana (and renewed), but a lien can only be utilized during the first 10 years. Having said that, why not use the money from your house to pay the debt you owe?

[stellac1776]

Judgment was against husband only and the property is under joint tenants with rights of survivorship as we were not married at the time. But, we can't find a buyer who will commit to buy with the liens on it and we can;t pay the liens off. We don't have the money. We tried to refinance and get money to pay them but no one will refinance with the liens on them. It is a catch 22.

What do you mean it "can only be utilized during the first 10 years"?

We are looking at bankruptcy Chapter 13/

[Zigner]

Judgment was against husband only and the property is under joint tenants with rights of survivorship as we were not married at the time. But, we can't find a buyer who will commit to buy with the liens on it and we can;t pay the liens off. We don't have the money. We tried to refinance and get money to pay them but no one will refinance with the liens on them. It is a catch 22.

That's strange, because if there is enough equity in the house, lenders (and buyers) would generally be willing to let this be handled through escrow.

What do you mean it "can only be utilized during the first 10 years"?

It appears that the lien can only be used as a method of collection during the first 10 years that the judgment is in effect.

[stellac1776]

That's strange, because if there is enough equity in the house, lenders (and buyers) would generally be willing to let this be handled through escrow.

What does that mean?

The whole thing was strange because at the time my husband was retired and on social security and I was disabled. I was not part of the judgment against him. We were not even aware of 2 of the lawsuits, went to the one and tried to do a payment plan but judge would not, and were never aware of the liens until we tried to refinance the house to pay the IRS>

And we have a mortgage on the house.

[Zigner]

That's strange, because if there is enough equity in the house, lenders (and buyers) would generally be willing to let this be handled through escrow.

What does that mean?

The whole thing was strange because at the time my husband was retired and on social security and I was disabled. I was not part of the judgment against him. We were not even aware of 2 of the lawsuits, went to the one and tried to do a payment plan but judge would not, and were never aware of the liens until we tried to refinance the house to pay the IRS>

And we have a mortgage on the house.

Let's use made-up numbers as an example:

Value of house: $300,000
Tax liens: <$20,000>
Judgment liens: <$45,000>
Mortgage: <$50,000>

If you subtract the lies and the mortgage from the value of the house ($300,000 - $20,000 - $45,000 - $50,000), then you end up with $185,000 left over. That is your equity in the house. So, if someone came in tomorrow and offered you $300k for the house, then, through escrow, the debts would be paid and you'd walk away with $185k (minus the various fees that go along with the sale of a property).

The same with refinancing. You shoudl be able to refinance those debts in to your mortgage. The problems there are that you really can't afford any higher mortgage payment than you are paying now, and your credit is subpar. Because of that, the bank probably won't want to do a refinance for you.

[pg1067]

we can't find a buyer who will commit to buy with the liens on it and we can;t pay the liens off. We don't have the money. We tried to refinance and get money to pay them but no one will refinance with the liens on them. It is a catch 22.

That doesn't make much sense. The whole point of selling or refinancing would be to get rid of the liens. In the other thread you started (unnecessarily), you wrote that, between the credit card judgment liens, tax liens, and the mortgage, the property is encumbered to the tune of $75,000. What is the fair market value of the property? My guess is that you're having a hard time finding a buyer or getting the lender to refi because the property value is too low relative to the liens and/or because of your limited income.

[adjusterjack]

We are in our 70's and would like to sell the house and find a smaller place. Someone told us that liens can only stay on property for so many years. Have heard 5, 7 and 10. Is this true in INdiana and if so, how many years and how do you get the lien released? Thanks.

If the liens are still enforceable then the way you get them released is by paying the debts.

But, we can't find a buyer who will commit to buy with the liens on it and we can;t pay the liens off.

That doesn't make any sense. You write a purchase contract contingent on the liens being paid out of the equity, assuming there's enough equity to pay them and leave you with some money. Real estate agents and title/escrow companies know all about that.

How much is the house worth?
What's the mortgage balance?
How much is the total of judgment debts?

[pg1067]

What's the mortgage balance?
How much is the total of judgment debts?

In the OP's other thread, he/she wrote that the credit card debt is $10k and implied that the mortgage (which the OP is not currently paying) is $45k (and that there's a lien for $20k in unpaid taxes).

[adjusterjack]

Saw that. Would help to know what the house is worth.