What happens if you have a judgment against you in bankruptcy?

What happens if you have a judgment against you in bankruptcy?

However, if the creditor has lien rights against your property, you might—or might not—be able to get rid of the lien in the bankruptcy case. A judgment lien that survives bankruptcy may make it difficult for you to sell or refinance your property later. Most people end up with a money judgment after a creditor files a lawsuit for an unpaid debt.

Can a judgment lien be removed from a bankruptcy?

For more information, read Nondischargeable Debts in Chapter 7 Bankruptcy. Obtaining a bankruptcy discharge may give you little comfort if the creditor’s lien can still attach to your assets, such as your house. There is a way, however, that you can get rid of the judgment lien in your bankruptcy. It is called lien avoidance.

What happens to credit card debt when you file bankruptcy?

If a creditor gets a judgment against you and the debt is dischargeable in a Chapter 7 bankruptcy, filing for bankruptcy will wipe out a creditor’s ability to collect. Judgments, however, can create a lien on your property. And liens don’t go away in bankruptcy automatically.

Can a lawsuit be discharged in Chapter 7 bankruptcy?

fraud committed while in a position of trust, such as embezzlement while acting as a trustee or guardian. If the judgment doesn’t relate to these categories, and the creditor doesn’t object to your discharge, then you can discharge the lawsuit judgment in Chapter 7 bankruptcy (but a lien still might remain—more below).

Can you file bankruptcy if you are sued by a creditor?

If you’ve been sued by a creditor because you can’t pay your debts, filing bankruptcy will stop the lawsuit. You can also file bankruptcy after you’ve already lost the lawsuit and a judgment has been entered against you.

Can a bankruptcy stop a lawsuit from proceeding?

Filing for bankruptcy will stop collection lawsuits from proceeding to judgment, and, in some cases, will take care of debt liability that’s been reduced to a money judgment. Skip to Main Content Find a Lawyer

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