How to Block or Prevent a Lien on Your Home

Judgment Liens

1). Pay all creditors with judgments against you in full. Creditors can file a property lien to recover a money judgment in some states. Ask for signed releases showing you paid in full for all judgments.
2). Negotiate with judgment creditors. Some creditors may accept less than the amount due to satisfy the judgment, preventing a lien filing. Get any reduced payment agreement in writing before paying the creditor and ask for proof of payment in full.
3). File bankruptcy in the district court with jurisdiction over your home. Chapter 7 allows you to wipe out debt, while you must make a repayment agreement with creditors in Chapter 13. Court rules determine which type you must file. You can typically include money judgments in a Chapter 7 filing or on a Chapter 13 payment plan. Creditors cannot file a lien against your home while you have a stay against creditor actions, as granted in a bankruptcy filing.

1). Ask for lien, labor and supply waivers from the contractors. The waivers prevent the contractor and subcontractors used for work and supplies from filing a mechanic's lien. For example, a subcontractor may file a mechanic's lien if not paid by the general contractor, even if you paid the general contractor in full.
2). Pay for all work done to your home in full. Ask for receipts for all payments to the contractor.
3). Contact the contractor if you cannot pay in full. Some contractors will accept written payment agreements if you already made partial payment to avoid legal expenses.

1). Pay all taxes in full. Both property and income taxes accrue interest and penalties if not paid on time.
2). Contact the tax authority as soon as you know you cannot pay in full. Property tax collectors and income tax agencies typically have repayment agreements available for persons experiencing financial difficulty. Request a repayment agreement. Check the agreement before signing to ensure you can make the payments.
3). File bankruptcy in the district court with jurisdiction over your residence. Tax collectors cannot file a lien against your home while a creditor stay is in effect, but special exemptions sometimes apply to federal and state tax collectors. You may have to pay income taxes in full even if you file Chapter 7. Property tax collectors typically do not receive special treatment in a bankruptcy, and the debt is included in the discharge.