What Is A Judgment?
When you owe creditor money and are unable to pay the creditor, the creditor must take you to court before they can levy your bank accounts or garnish your wages. When a lawsuit is initiated against you, you should be served with a Summons and Complaint. If you do not respond within a set period of time or appear at the hearing set for your case, a default judgment will be issued against you. The creditor can then take this judgment and pursue garnishments or levies. To stop these actions, the judgment must either be satisfied or discharged in a bankruptcy. Even if these steps are taken the judgment can still continue to cause you difficulties. To avoid the continued negative financial consequences these judgments can create, the judgment will need to be either released or removed.
Why Should You Have A Judgment Removed?
When a person files a bankruptcy and they have a creditor who has obtained a judgment against them, the debt underlying the judgment is discharged through the bankruptcy. However, the judgment itself will remain. No creditor can collect upon the judgment, but the judgment will still continue to exist on the county record. The judgment will still be reported to credit bureaus as unreleased. In addition, if a person were to attempt to sell an asset such as a home, the judgment will interfere with the sale of the property. Oftentimes, a title company will refuse to clear the title for a home when the owner has a judgment against them.
Can A Judgment Be Removed?
1. Was the debt discharged though the bankruptcy?
Make sure that the debt in question was actually discharged through the bankruptcy. A debt must have been included in the bankruptcy for it to have been discharge. Sometimes debts are not discharged through a bankruptcy. This most often happens when a creditor objects to the discharge of their debt. Make sure that there were no objections to the discharge of that debt. In addition, certain types of debt can not be discharged through a bankruptcy. For example, back child support can not be discharged through a bankruptcy. If a judgment were to stem from this type of debt, the judgment can not be removed.
If you were in a Chapter 13, you can not receive a discharge until your plan has been completed. A judgment can not be removed if a discharge has not been issued. You will have to wait until your plan is completed before you will be able to remove any judgments issued against you.
2. Was the debt properly scheduled in the bankruptcy petition?
Make sure that the creditor was properly listed in the bankruptcy. If the creditor was not listed and the debt existed before the case was filed, the case will need to be reopened and the creditor will need to be added.
3. Was the Judgment entered before the Bankruptcy was filed?
If the judgment was entered before the case was filed, a judgment must be removed via the judgment removal process. If it was entered after the case was filed, the judgment should be removed by the creditor. A judgment entered after a bankruptcy case was filed on a debt which existed prior to when the case was filed, should be handled in a different way. Contact your attorney to handle this situation. It should be the creditor’s responsibility to remove a judgment in these circumstances.
Removing a judgment can be a tedious and frustrating undertaking. If you find that you need assistance in removing a judgment, we can help.