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Unperfected/unrecorded lien -- can trustee sell?

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    Unperfected/unrecorded lien -- can trustee sell?

    I've got weird one maybe nobody has come across yet. Just found out that a property in my 13 plan (that I'm to sell) was supposed to be secured by a line of credit that I thought was on another family property altogether. By some strange course of events, the creditor never actually recorded the final deed of trust to effectvely perfect the lien on this particular parcel. The property is in California. Does anyone have any opinions as to whether I will have problems transferring title when the title search most certainly finds this discrepancy? Quick opinion by an attorney in CA said the trustee would most likely be able to treat the creditor just like any other unsecured creditor -- and sell ahead of their claim. (Since there was no recorded lien at the time I filed two years ago.)

    Thought this one might be food for thought for a few people.

    #2
    If the lender failed to perfect its lien it is nothing more than a general unsecured creditor. You and/or the Trustee will be selling the property under 11 USC 363. It will be sold free and clear of all liens with the proceeds to attach to those liens (if perfected). The net-net after payment of all costs will be paid to the general unsecured creditors. If you are otherwise a 100% Plan then you do not necessarily need to sell the property.

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