What if the delinquent owner files an bankruptcy after we bought his tax lien cert?!

[Terry S.]

Hi BP:

I have been reading all these tax lien certificate investments and some random thoughts just came up. 

What if the delinquent original owner files an bankruptcy, chapter 7 to be exact, after the lien is sold to investor? 

I understand the lien will not be forgiven even after his bankruptcy, but from what I have read, if the property is the primary residence of that delinquent owner, it can't be foreclosed on. And for a lot of folks went behind on their taxes and had to file bankruptcy, it's quite possible that there is no other asset they have left to redeem the lien either. 

So in that case, as investors holding his tax lien, is it like holding a blank IOU, where we know the lien, which means our money, will always be there attached to the property not removed, but quite possibly still we won't be able to get it back any time soon, even if it eventually comes back?

Anyone knows if my understanding is correct? Seems like tax deed is a much cleaner way to go in terms of investment, unfortunately NJ is tax lien state :(

Thanks for any advice.........