Selling property and my 50% partner has a lein

[Doug Peters]

We own a townhouse in Indiana.  it is a 50/50 partnership with a friend/colleague.  We have been in the process of selling it.  It was to close last month (now delayed to this weekend) but during the process, the title company found out that my partner has a personal lien against her.  It was from another townhouse that she owned (on her own) on the same street that she lost to foreclosure about 10 years ago.

What we have learned is that since the lien is just on her name it should not affect us.  But both of us are listed on the loan as co-borrowers.

The payoff amount of her lien ($56K) is more than the total profit that we will probably end up with.  I am new to this type of situation.  As it seems the title company has to pay the lien before we see any of the money, right?

But also an attorney told her that since the lien is her personal lien that 50% of the profit of the sale that is due to us should not be affected.  Does that sound right?  Has anyone seen anything like this before?  

Also, if the lien cannot be fulfilled 100% can they stop us from closing and thus I don't get my 50% even?  

Is there anything she can do on her end?  Will the bank (BofA) be open to taking some money ( her share is probably about $22K) instead of $0 if they stop the property from closing?

Thanks in advance