(Video) HOW DO I GET RID OF JUDGMENTS AFTER A CHAPTER 7 BANKRUPTCY DISCHARGE?

Posted by Wesley Scott on October 24, 2018 at 1:50 PM
Wesley Scott

shutterstock_2377672835Yes, Chapter 7 bankruptcy can typically discharge most judgments. However, there are exceptions, such as child support and alimony. To ensure your judgment is discharged, consult with a bankruptcy attorney in your area. They can help you understand the specific rules and procedures in your state.

Filing for Chapter 7 bankruptcy in Minnesota provides individuals with a fresh financial start by discharging many unsecured and unpaid debts. However, many people wonder what happens to judgments entered against them before filing for bankruptcy. While a discharge wipes out most personal liabilities, it does not automatically remove a judgment lien from your property.

By consulting with a Chapter 7 bankruptcy attorney, you can learn details about how to get rid of judgments after a Chapter 7 bankruptcy discharge and specific strategies you can use under Minnesota law. Plus, some basics are useful.

 

Filing for Chapter 7 bankruptcy to discharge credit card debt and avoid wage garnishment from outstanding debt judgments.

Filing for Chapter 7 bankruptcy to discharge credit card debt and avoid wage garnishment from outstanding debt judgments.

 

Wrapping Up Chapter 7 Bankruptcy

Unfortunately, when you receive a Chapter 7 Bankruptcy discharge, state and public records are not automatically erased. When you receive a discharge in Chapter 7 Bankruptcy, the public record needs to be cleaned up. The judgments you received on pre-petition debt, before your bankruptcy filing, still linger in the public records as debts owed even after you receive your discharge.

Your credit could still be linked to several types of dischargeable debt, such as:

  • Credit cards

  • Personal loans

  • Medical bills

  • Student loan debt

 It’s true that the judgment creditor cannot collect on the judgment after discharge without violating federal law. But, that likely will not be the problem you will face. Instead, you are going to try and procure credit at some point and that judgment will come back to haunt you. The potential lender will say everything looks good, except this judgment on the public record.

This is why it is very important, in whatever state you live in, to clean up the public record after you file bankruptcy and get a discharge. Most states have a process to remove judgments that are “void” as a result of a Chapter 7 Bankruptcy discharge. The process in most states will cost you a nominal fee and is fairly straight forward to do. It is important to do this immediately after discharge so the matter is placed behind you for good.

 

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How to Get Rid of Judgments

When a judgment is entered against you, it becomes a legal debt that creditors can pursue. After a Chapter 7 bankruptcy discharge, most debts included in the bankruptcy will be eliminated, meaning creditors can no longer try to collect from you personally. However, judgments may still show up on your credit report, and if a lien was placed on your property, that lien can survive the bankruptcy.

One of the most effective ways to remove a judgment lien is through lien avoidance. Under Section 522(f) of the Bankruptcy Code, a debtor can avoidd a judgment lien if it impairs an exemption to which they are entitled. The process is described in more detail below.

 

Non-dischargeable Debt and Judgments After Chapter 7

While Chapter 7 bankruptcy discharges many debts, certain types of debt are considered nondischargeable, which means they will remain even after your bankruptcy is complete. Common examples of nondischargeable debt include child support, alimony, certain tax obligations, and student loans. If the judgment against you is related to one of these non-dischargeable debts, bankruptcy will not eliminate the debt, and the creditor may continue pursuing collection efforts.

Judgments related to fraud, willful injury, or certain criminal actions are also often considered nondischargeable. In these cases, the creditor may still be able to enforce the judgment after your bankruptcy discharge. It’s important to review your specific situation with a bankruptcy attorney to determine whether the judgment you face is related to a dischargeable or non-dischargeable debt.

 

Automatic stay in bankruptcy halting collection efforts from creditors seeking to garnish bank accounts or seize assets.

 

What If a Judgment Hasn’t Been Entered Yet?

If a creditor has filed a lawsuit against you but hasn’t yet obtained a judgment by the time you file for Chapter 7 bankruptcy, the automatic stay that goes into effect can temporarily halt the legal process. The automatic stay prevents creditors from continuing collection actions, including lawsuits, foreclosures, and wage garnishments.

In this scenario, the creditor will be unable to secure a judgment while the bankruptcy case is pending. Once your Chapter 7 case is discharged, the debt associated with the lawsuit may be eliminated, preventing the creditor from obtaining a judgment at all.

However, if the debt is nondischargeable, the creditor may resume the lawsuit after the court order for bankruptcy discharge. Filing for bankruptcy early in the lawsuit process can be a strategic way to prevent a judgment from being entered.

 

Lien Avoidance in Minnesota: A Critical Step

A crucial tool for getting rid of judgment liens in Minnesota is lien avoidance. A judgment lien can attach to your property, typically your home or other real estate, even after your personal liability is discharged in bankruptcy. This lien could interfere with your ability to sell or refinance your property, making it essential to take steps to remove it.

In Minnesota, you can avoid a judgment lien if it impairs an exemption you’re entitled to under the homestead exemption laws. Minnesota’s homestead exemption allows debtors to protect up to $450,000 of their home’s value from creditors. If the judgment lien reduces this exemption, you may be able to avoid the lien.

To do this, a motion must be filed in bankruptcy court, requesting the lien be removed based on its impact on your exemption rights. This involves an adversary proceeding in a bankruptcy case, a litigation matter that concludes with a court ruling. Working with a qualified bankruptcy attorney is strongly recommended to ensure success.

 

Secured creditor reviewing a bankruptcy filing to determine the impact on money judgments.

 

Reach Out to a Chapter 7 Bankruptcy Lawyer in Minnesota

If you’re dealing with judgments even after your Chapter 7 discharge, you don’t have to face it alone. LifeBack Law Firm, P.A. can help you eliminate those burdens and protect your assets.

For a free consultation with an experienced bankruptcy attorney, visit us online or call 844.277.9650 today. Our team is here to provide you with the legal support you need to make a fresh start in Minnesota.

 

FAQs About Getting Rid of Judgments After Chapter 7 Bankruptcy Discharge

Does a judgment against you ever go away?

Yes, a judgment can eventually go away, but it typically depends on state laws and the type of debt. In Minnesota, judgments are valid for ten years and can be renewed for another ten years if the creditor takes action.

However, after a Chapter 7 bankruptcy discharge, the personal liability for most judgments is eliminated, meaning creditors cannot continue collection efforts against you personally. That said, if the judgment has created a lien on your property, you may need to pursue lien avoidance to fully remove its impact.

How to stop judgment collection?

Filing for Chapter 7 bankruptcy is one of the most effective ways to stop judgment collection. Once you file, an automatic stay goes into effect, immediately halting any collection activities, including wage garnishments, bank levies, and lawsuits.

After your debts are discharged through Chapter 7, creditors cannot pursue collection for most judgments. If a lien has been placed on your property, you may need to take additional steps, such as filing for lien avoidance, to remove it entirely.

Can a Chapter 7 discharge be reversed?

In rare cases, a Chapter 7 discharge can be reversed or revoked by the bankruptcy court. This usually occurs if the court finds that the debtor committed fraud or failed to disclose significant assets during the bankruptcy process.

Creditors may also petition for a revocation of the discharge within a specific period after the bankruptcy case is closed. To avoid the risk of discharge revocation, it's critical to provide honest and accurate information throughout your bankruptcy case.

Can you get judgments removed from your credit report?

Yes, after a Chapter 7 bankruptcy discharge, you can request that the judgments discharged in your bankruptcy be updated on your credit report to reflect that they have been eliminated. However, a judgment can remain on your credit report for up to seven years, even if it is no longer enforceable.

If the judgment was related to a lien, additional legal steps may be required to remove the lien itself. Contact the credit bureaus and provide documentation of your bankruptcy discharge to have your credit report updated.

Does bankruptcy void judgments?

Bankruptcy does not automatically void a judgment, but it does discharge the personal liability associated with many types of judgments. This means creditors cannot collect on the debt after the discharge.

However, if the judgment created a lien on your property, that lien may still exist even after bankruptcy. To remove it, you will need to file for lien avoidance in bankruptcy court. Bankruptcy does not eliminate judgments tied to nondischargeable debts like child support, alimony, or certain taxes.

 

Secured creditor reviewing a bankruptcy filing to determine the impact on money judgments and nondischargeable debts.

 

Talk to a Chapter 7 Attorney About Filing Bankruptcy

This overview answers the question, How do i get rid of judgments after a Chapter 7 bankruptcy discharge? However, you will certainly need additional information and personalized details to help you make informed decisions.

At LifeBack Law Firm, P.A., we specialize in helping clients in Minnesota clear judgments and start fresh after Chapter 7 bankruptcy. Schedule a free consultation now by contacting us online or calling 844.277.9650. Our experienced attorneys are ready to guide you through every step of the process to regain your financial freedom.


 

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Topics: What happens after chapter 7 discharge?, How do I get rid of discharged bankruptcy?

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