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I saw on NBC news tonight that debt collectors are putting liens on the debtor home for medical debt. My question is if a person files bankruptcy wouldn't that just quash the lien . I just want to know. I realize this not what this board likes to here. I currently have no health insurance and no longer working.

Bankruptcy may, or may not, quash the lien. The thing about a lien on a house is that it doesn't need to be satisfied until the property that the lien is against changes hands, and no payments are required on the lien until the property changes hands. Because of that, a lien on a home, in and of itself, isn't always considered a debt that needs to be relieved by bankruptcy.

You would have a better chance of extinguishing the debt through bankruptcy if you filed bankruptcy before a lien was placed.

That said, if you have no income to protect, bankruptcy doesn't usually help much. Bankruptcy is best used as a tool to protect future income. It doesn't protect current assets, except for workplace retirement accounts that are protected by ERISA and the assets that your state allows - often some equity in a home, a car, and a set limit on IRAs. If you don't have any income and you've already spent down everything except the assets that are protected in bankruptcy, you're pretty much 'judgment proof'. Therefore, it doesn't usually pay to spend the money to go through the bankruptcy process.

AJ
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