What is a lien??
A Lien is an interest in real or personal property which secures a debt. A judgment lien is a court ruling that gives a creditor the right to take possession of a debtor’s real property if the debtor fails to fulfill his or her contractual obligations.
What happens when a creditor receives a lien
The creditor can have a writ issued to have your property levied and sold to pay the debt, if you do not have any superior liens such as mortgages.
In most states, a debtor could file valid declaration of homestead after levy on execution, as long as declaration was filed prior to execution sale. If the property is not levied, then the lien remains on the property and continues to accrue interest. The lien will have to be paid for before the home is sold.
Avoidance of the lien
In Bankruptcy a Debtor could avoid creditor’s lien to extent that it impaired his homestead exemption rights under 11 USC 522 (f). When When granted, a “522 Motion” strips away the judgment lien, and transforming the resulting debt from a secured debt to an unsecured debt. In a chapter 7 bankruptcy this means this debt can be wholly discharged. However, in a chapter 13 the debt will be paid in accordance to the plan and eventually discharged after the completion of the plan.