Avoidance of Lien Law and Legal Definition

Avoidance of lien is the act of obtaining a release from the effect of a lien, judgment or security interest in property, often in connection with exempt property under the Bankruptcy Code. In some cases, a lien, although enforceable under the state remedies system, may nonetheless be avoided in bankruptcy. The following is an example of a statute governing avoidance of liens:

Avoidance of lien. The property affected by any lien deemed voidable under paragraph (b) of subsection (1) of this section and subsection (5) of this section is discharged from the lien, and that property and any of the indemnifying property transferred to or for the benefit of a surety shall pass to the liquidator, except that the court may on due notice order the lien to be preserved for the benefit of the estate and the court may direct that a conveyance be executed which is adequate to evidence the title of the liquidator.