Thanks to the automatic stay provision applied to your bankruptcy case, your outstanding creditors may be barred from pursuing any further collection activities against you. Such prohibited activities may include filing lawsuit judgments against you. However, this ruling may become complicated if a creditor has already placed a judgment and subsequently a lien on your property before your bankruptcy filing. With that being said, please continue reading to learn whether a bankruptcy filing can help eliminate a lawsuit judgment placed against you and how an experienced Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you avoid any further complications with this.

Can my bankruptcy filing eliminate lawsuit judgments placed against me?

Your bankruptcy filing may allow you to eliminate lawsuit judgments against you for your dischargeable debts (i.e., credit card debts, medical debts, personal loan debts, etc). This is because these dischargeable debts may be wiped out at the conclusion of your proceedings and therefore no longer your immediate responsibility to pay off.

However, a creditor may maintain their right to place a judgment lien against you. With this, they may still seize and force the sale of your property to back themselves for your outstanding debt. Or, they may wait until you sell this property on your own and collect the profits of the sale when the time comes. Therefore, a bankruptcy discharge may not mean much if a creditor’s lien is still attached to your property.

What can I do to avoid a judgment lien during my bankruptcy?

If you are worried about a judgment lien placed on your property, you may attempt to remove it during your bankruptcy proceedings. But this is so long as the lien is on property that would have otherwise been exempted or protected in your bankruptcy. Without further ado, to successfully file a motion to avoid a lien, you must demonstrate the following as fact:

  • You must demonstrate that the lien came from a money judgment issued against you.
  • You must demonstrate that you have property equity that you can claim an exemption against.
  • You must demonstrate that the lien goes against some or all of the equity you can claim an exemption against.

A common example of this is, in the state of Kentucky, you may be eligible to exempt up to $5,000 worth of home equity. With this, you may ask the court to set aside the lien up to that amount. In conclusion, at Schwartz Bankruptcy Law Center, we share the same goal as you, which is likely to achieve financial relief through the U.S. bankruptcy court system. So please do not hesitate to work with a skilled Louisville, Kentucky consumer bankruptcy lawyer from our firm today.