Filing bankruptcy will wipe out unsecured debts, such as credit cards and medical bills, but if you fall behind on payments these creditors can sue you and sometimes they get a lien against your property. Liens are not automatically discharged when you file bankruptcy, so your lawyer must take additional steps get the lien cancelled. Your lawyer can file a motion to avoid the lien so that you can keep your property. If the lien is not avoided, there will be a cloud on your title preventing you from selling your home unless the debt is paid.
The most important exception to this rule is that voluntary liens cannot be avoided. The most common type of voluntary lien arises when you take out a mortgage and give the lender a deed of trust on your property. In this situation, the bank is able to foreclose on your home if you fail to pay your mortgage. The mortgage company only agreed to lend you money because you pledged your house as collateral. For this reason, Congress has decided that those liens cannot be avoided.
As usual, the government has decided that taxes deserve special treatment, so tax liens cannot be avoided either.
The most common type of lien that can be avoided is a judicial lien. A judicial lien arises when a creditor sues you for an unpaid debt and gets a judgment. The creditor can then file the judgment in the chancery court land records. Simply filing bankruptcy will not make this lien go away, but your lawyer can file a motion to avoid the lien if you can show that the property is exempt. In Mississippi you can exempt $75,000 in equity in real estate, $30,000 in a manufactured home, and $10,000 in personal property. If you decide to file bankruptcy, make sure your lawyer knows if there is a lien against any of your exempt property.