You may be considering filing bankruptcy because one of your creditors has obtained a judgment against you. Most people are uncertain of the consequences that a judgment can have. Usually, if you do not own any real property (house or land) or if you do not have any equity in your property, it can be difficult for the judgment creditor to satisfy the judgment. In other words, if you do not own any property with value, it can be difficult for the creditor to receive money or property from you to pay off the judgment.
On the other hand, you may need to be concerned about a judicial lien. If you own real property in the same county where the judgment was entered by the court, then the creditor automatically has a lien against your real property. This means that when you try to sell your house, you will have to pay off the judgment before you can sell the house.
To better explain how a judgment lien works, here is a common situation:
You owe $25,000.00 on a credit card and have fallen behind on the payments. You first receive a Civil Summons from the attorney representing the credit card company. They give you 30 days respond, and when no response is received from you, the credit card company obtains a Judgment from the court. The lawsuit was filed in Guilford County, which is where your home is located. Ten years later, you try to sell your home. You are unable to do so without first paying off the $25,000.00 judgment (plus interest and attorney fees).
The good news is that bankruptcy can essentially eliminate the judgment lien on your home. If you own a home and a creditor has obtained a judgment against you, ask your bankruptcy attorney about filing a Motion to Avoid a Judicial Lien. In the appropriate situations, your attorney can file a motion with the bankruptcy court requesting that the judicial lien be removed from your home upon completion of your bankruptcy. If the bankruptcy court grants the motion, then the judgment creditor will no longer have a lien on your house. You also need to ensure that the judgment debt is listed on your actual bankruptcy petition in order for the debt to be eliminated.
Although your bankruptcy attorney will charge an additional fee to file the Motion to Avoid a Judicial Lien, it is well worth the attorney fee to eliminate thousands of dollars in additional liens on your home. Also, these fees are usually set or governed by the Bankruptcy Court.
If you are one of our clients and need to have a Motion to Avoid a Judicial Lien filed then it is your ultimate responsibility to reach out to us and make sure the appropriate motion is filed and the lien is removed before the close of your bankruptcy.
If I have a juudgement against a tenant but she has filed for a motion to avoid a judicial lien, can I still go forward with wage garnishment?
Her debt to me was generated as a result of her abandoning her lease and leaving a substantial amount of damage in the property.
Also, I have 21 days to respond to the attorneys request to the bankruptcy court judge on the motion to avoid judicial lien. Who do direct my response and what do I include in this letter?
I don’t want to waste $ or time if the end result will be the same.
Thanks for your input.
J.
J,
If your tenant is within the protection of the bankruptcy laws then you should not try to collect any other debt. It would be a violation of the automatic stay and could cause sanctions to be issued against you. You would need to file your objection with the bankruptcy court and send a copy to the Debtor’s attorney as well. Best of luck!
How do I respond to an Opposition to Motion to Avoid Judicial Lien?
Is there a form, a template or can I simply reply in letter form to the Judge and state why I blieve Movant’s debt should not be granted relief?
You can object to the debtors motion to avoid a judicial lien. However, you would need to have a basis for your objection. Typically, if you object there will be a hearing on the matter so you could argue why the bankruptcy judge should deny the motion to avoid the judicial lien. It’s typically a tough argument to make though. You should probably contact a creditors’ attorney to learn how you can best protect your rights. Good luck!
Good Day,
I would like to know if a bankruptcy chapter 7 was filed and granted but the attorney did not add motion to avoid lien but did add the creditor in the list of discharge. From what I am understanding the lien then remain on the property but not the person correct? So, lets say the property gets sold and a particial remove of lien on the property is granted by the lien holder can they place later on a new lien on a new property that the person purchases later on?
The Chapter 7 bankruptcy would wipe out the debt in your name personally but it may still remain on the house if you have not filed a motion to avoid a judicial lien. You would need to contact an attorney in your state to discuss the situation more. The laws around stripping liens can sometimes be specific to the state that you are in. Best of luck.
Damon Duncan