What happens to judgments after bankruptcy?
Bankruptcy does not eliminate judgments, however. Unpaid debts that have been declared insolvent may still be subject to judgments. These judgments can be from service vendors, credit card companies, or even car and mortgage lenders. Creditors can use judgments as leverage to garnish wages and take assets. Fortunately, bankruptcy provides strong tools for dealing with these debts.
The most common way to protect your personal property is to pay off your judgment as soon as possible. However, this can be difficult. In some states, a judgment is a lien on your property. It attaches as a lien on all of the property you owned at the time of filing for bankruptcy. This means that if you sell a house or property, you might be unable to sell it for a profit. Luckily, there are some exemptions that allow you to protect your property during bankruptcy.
A lawsuit can also result in a judgment. However, this does not affect the dischargeable debts. Judgments can be discharged if the underlying debt is dischargeable in bankruptcy. However, a judgment may not be dischargeable if a creditor files an adversary proceeding in bankruptcy court to keep its right to collect the debt despite bankruptcy.
A judgment is a public record, which means it is a statutory lien on the property you own. This lien is a common source of problems for homeowners because it prevents them from selling property. Whether or not you sell the property will determine whether or not the lien is released by the bankruptcy. The only way to avoid this lien is to file a motion with the bankruptcy court during the bankruptcy process. This motion must be supported by your facts and circumstances, and the judge's decision will ultimately determine if you can be discharged from the judgment.
If you have any questions or in need a Bankruptcy Attorney, we have the Best Attorneys in Utah. Please call this law firm for free consultation.
Ascent Law LLC
8833 S Redwood Road Suite C
West Jordan UT 84088
(801) 676-5506
