Will Chapter 13 help with debt NOT discharged in Chapter 7 because of default judgmen

[ONEMOBROKEHO]

I'm in a horrible pickle. I hope SOMEONE/ANYONE out there can help me. My husband and I filed a Chapter 7 BK. One of our creditors filed a Complaint to Determine Dischargeability (only against my husband) for a business debt my husband owed. Ultimately the Court entered a default judgment against my husband; don't ask -- bad advice. The creditor has now placed a lien on our home -- co-owned by my husband and me. My question is this: can I (not a party to the non-dischargeability action) now file a Chapter 13 BK, either by myself or with my husband, and include this debt to have the lien removed from our house? Or does the fact that they put the lien on the house already now prevent me from discharging the debt in a chapter 13? I don't know if it matters, but our house has no equity. To anybody kind enough to read all of this, understand it and respond, THANK YOU. We just barely survived the Station fire, and now this!

[justbroke]

can I (not a party to the non-dischargeability action) now file a Chapter 13 BK, either by myself or with my husband, and include this debt to have the lien removed from our house?

No, you can't remove liens unless they impair an exemption. If your State non-bankruptcy law provides a decent Homestead Exemption, then you can file a homestead exemption and have the lien quashed. The Chapter 13 by itself doesn't do that. You would have to file a complaint or contest matter challenging the lien or the extent of the lien's impairment on an exemption.

(If you are indeed in the "Biggest little State in the Union"... they passed a new law in 2004 increasing the homestead exemption from $150K to $200K.)

Or does the fact that they put the lien on the house already now prevent me from discharging the debt in a chapter 13?

You may be able to discharge the debt. However, you can't just get rid of a lien. All liens survive bankruptcy with very few exceptions. I think this is all moot anyhow. You have no equity (as you stated), so there is no money. Plus, if you are in that New England State... then the homestead exemption is $200K.

We just barely survived the Station fire, and now this!

Wow, sorry you were there. I love that little State.