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HomeExclusiveCan You File Bankruptcy On A Court Ordered Judgement

Can You File Bankruptcy On A Court Ordered Judgement

Filing Bankruptcy Before And After A Judgment

Will bankruptcy override a judgement?

If you file your bankruptcy petition before the judgment is issued, the automatic stay stops the lawsuit immediately. Whenever possible, this is the best way to deal with a potential judgment. Once a judgment is filed, it becomes a lien on the property in most states. While a bankruptcy filing might discharge the debt, it does not get rid of the lien.

To get rid of the judgment lien, your bankruptcy attorney must petition the court to cancel the judgment lien. Most attorneys charge extra for this service, and the court could deny your request. Therefore, if you are going to file bankruptcy, it is generally better to do so now rather than wait until the court enters a judgment.

Also, many creditors work very quickly to collect on a judgment. You could lose assets or income by waiting to file bankruptcy until after a judgment is entered. Filing the bankruptcy case might allow you to get some of your money back that was seized through wage garnishment. Still, you may not recover all garnished funds depending on the timing of the bankruptcy filing and the garnishment of the wages or seizure of assets.

How Long Does The Writ Last

The writ will expire sixyears from the date it is issued, unless you renew it for an additionalsix-year period. A writ may be renewed before it expires by filing a Requestto Renew a Writ of Seizure and Sale with the enforcement office.Each renewal is valid for six years from the previous expiry date. There is afee to file a writ. Refer to the Guide to Fee Schedules or the enforcementoffice for more information.

How Do Creditors Find Your Assets

Florida judgment collection laws provide judgment creditors numerous tools to find information about a debtors income and assets. These general discovery tools include requests to produce documents, written answers to interrogatories, and depositions under oath. A judgment creditor can use all the same discovery tools made available to parties in general litigation to discover financial information about a judgment debtor. After a creditor locates a debtors assets, the creditor can then use collection tools to seize and liquidate the assets. Discovery of assets previously owned by the debtor provides the creditor clues about the debtors fraudulent transfers or conversions of these same assets to avoid collection.

After a court issues a money judgment, the judgment creditor is permitted to ask the judgment debtor detailed and extensive questions about the debtors financial affairs. For example, the creditor can demand that the debtor disclose all assets in which the debtor has any legal or equitable interest, including assets owned jointly with a spouse, family members, or business associates. The creditor can ask broad questions about the debtors sale or transfer of assets in the past. The debtor must answer questions under oath and penalty of perjury. The creditor can also seek information from third parties such as an examination under oath of the debtors spouse and other family members.

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Request For Production Of Documents

The debtor must furnish to the creditor all documents the creditor reasonably requests related to the debtors financial affairs. Floridas laws for discovery in aid of execution allow creditors to request copies of a debtors bank statements, check registers, cancelled checks, credit card statements, insurance policies, and tax returns. A creditor can request documents up to at least four years old and, in some circumstances, beyond four years. The debtor is required, upon request, to produce all documents that possibly could lead the creditor to discovery of the debtors assets available to satisfy the judgment.

The debtor is required to supply documents requested which are in the debtors custody or control. The debtor does not have to provide documents that the debtor does not have in his possession or cannot easily obtain.

Small Business Administration Debt Collection

Filing Bankruptcy to Avoid a Judgment or Lawsuit

Many business owners finance their business with federal SBA loans. Almost all SBA loans are personally guaranteed by the business owner and their spouse In the event a business is unable to repay the loans the SBA will sue and obtain a money judgment against the business and the owner.

The SBA has enhanced collection remedies regardless of state property exemptions. The SBA is able to intercede to take a debtors tax refunds and social security payments. The SBA can garnish wages notwithstanding the debtors Florida head of household exemption. The process is an SBA administrative wage garnishment and is authorized by 31 USC 3720D.

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If You Are Considering Bankruptcy

You need help from an experienced bankruptcy attorney to help you go through the process of getting rid of a judgment through bankruptcy. That way, you will be able to protect your assets and prevent your creditors from putting up lines on your property.

If youre in the Dallas or Fort Worth areas, get in touch with Leinart Law Firm to get started with our experienced team.

Free Bankruptcy Evaluation

Discuss your situation and your options with an experienced bankruptcy lawyer.

Your privacy is important to us. We’ll never share your information.

Schedule a FREE, no-obligation consultation and evaluation today.

When Does The Creditor Need To File A Certificate Of Judgment

The court where the judgment is made isoften called the originating court. Sometimes, the debtor lives or carries onbusiness within the area of a court other than the originating court. In thiscase, before the creditor can get either a notice of garnishment or notice ofexamination from the court in that jurisdiction, a Certificateof Judgment is required. The creditor may alsorequest the issuance of a certificate of judgment if they wish to have it fortheir records, or where required as proof of judgment . Thecertificate of judgment must be requested and issued by the originating courtand filed in the court office where the judgment will be enforced. There is afee for issuing each certificate of judgment.

Example 3

Meera sued Norman in Brockville Small Claims Court and thejudge made a judgment in her favour for $1,500. Meera knows that Norman has nowmoved to Ottawa.

Meera will now need to request a certificate of judgmentfrom the Brockville Small Claims Court and file it with the Ottawa Small ClaimsCourt if she wishes to file either a notice of garnishment or a notice ofexamination.

Meera could then garnish Normans bank account, for example,by filing a notice of garnishment with the Ottawa Small Claims Court.

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Does Bankruptcy Clear Judgments

Does bankruptcy stop judgments? Does bankruptcy eliminate judgments? Yes, and yes.

A judgment results when a court rules in favor of a creditor, either because the debtor failed to respond to a lawsuit against him or her or the matter was fully and fairly determined by a judge or jury .

The majority of judgments stem from breach-of-contract actions brought in Texas state court. To learn more about different types of judgments, contact judgment collection attorney in Houston, Seth Kretzer. Chapter 7 or Chapter 13 bankruptcy can both clear court judgments, as further discussed below.

Winning A Judgment May Be Only Half The Battle Collecting It The Other Half

What Happens to a Judgment in Bankruptcy? Can a chapter 7 bankruptcy get rid of a judgment? [2020]

When you win a Judgment in City Court, the Court sends a Notice of Judgment to the parties. The losing party, the Debtor, has thirty days to pay the Judgment. The winning party, the Creditor, should first contact the losing party, the Debtor, to attempt to collect the judgment. If the Debtor fails to pay, the winning party, the Creditor, may take steps to collect or execute the Judgment including:

In some instances, you may not be able to collect on a judgment. These include if a judgment debtor has filed for bankruptcy or if the judgment debtor has filed an appeal and has stayed the judgment.

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What Is A Discharge In Bankruptcy

A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.

Although a debtor is not personally liable for discharged debts, a valid lien that has not been avoided in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.

What If I Want To Have A Motor Vehicle Snowmobile Or Boat Seized

If the creditor isrequesting that a motor vehicle, snowmobile or boat be seized, he or she mustalso provide the court with proof that the following searches have been made:

  • PersonalProperty Security Act search and Repairand Storage Liens Act search to show whether there are any liens orother securities registered against the vehicle, the amounts of the liens orsecurities, and whether there is enough equity in the vehicle for it to beseized and sold

    314-8880 or toll free in Ontario at 1-800-361-3223. Please note that there is a fee payable to that ministry for the search and the search will not be conducted over the phone.)

  • Vehicle abstract to prove that the vehicle is ownedby the debtor
  • For a motor vehicle only: An up-to-date copy of a used vehicleinformation package, which can be obtained from the Ministry of Transportation.

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How Long Does A Judgment Last In Florida

In Florida, a judgment lasts for 20 years. The time period runs from the day the judgment is signed by the judge and entered by the court. This 20-year timeline is established by section 55.081 of the Florida Statutes. While a judgment can be renewed in Florida for an additional 20 years using a procedure called an action on a judgment, this is uncommon. The 20 year timeline means that a creditor can collect on the judgment at any time during the 20 years after its issuance.

People commonly misunderstand the difference between how long a judgment lasts and how long a judgment lien lasts in Florida. A judgment is an order entered by the court making the debtor liable to the creditor for the debt. A judgment lien is the recording of a monetary judgment with the Florida Secretary of State, giving the holder of that judgment priority in collection for any property owned by the judgment debtor. The priority is against any other judgment creditors that subsequently record their own judgments.

While a judgment is good for 20 years in Florida, a judgment lien is valid for only 10 years. Once the 10 years of the judgment lien expires, the judgment creditor loses priority against other creditors, but still has a valid judgment for the remainder of the 20 year lifetime of the judgment.

If a judgment originates out of state and is domesticated in Florida, then the timeline begins on the day the judgment is entered by the original court.

What Can The Debtor Do If Money Is Being Garnished

What Happens in Bankruptcy Court?

If you are the debtor and you do not agree with anotice of garnishment that has been served on you, you can request agarnishment hearing.

You can also request a garnishment hearing if thegarnishment means a real financial hardship for you. At the hearing you can aska judge for an order to increase the amount of wages that is exempt fromgarnishment under the WagesAct. For example, if the percentage of your wages that is exempt fromgarnishment is increased, less money will be deducted from your wages.

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Types Of Civil Lawsuits Bankruptcy Stops

When your bankruptcy case is approved, the court is given jurisdiction over any cases involving the allegation that you owe someone money. This could be due to failing to pay a debt or being held liable for someones accident injuries. For qualifying cases, the court would handle the underlying debt and the lawsuit would be dismissed.

Some of the most common types of lawsuits that bankruptcy can stop include:

  • Unpaid credit card balances

What Can The Debtor Do As Soon As Judgment Is Given

You may receive a letter from the creditor askingfor prompt payment after judgment has been given at trial, at the settlementconference, or by default. Once you are aware of the judgment, you shouldcontact the creditor immediately.

If you are able to pay the full amount of thejudgment, send your payment to the creditor at the address provided in theclaim or letter. If you are unable to pay the judgment in full, you shouldstill contact the creditor to make arrangements for payment. Be sure to let thecreditor know if there are any circumstances which affect your ability to payright away, and make a proposal for paying the judgment within a reasonabletimeframe. Be prepared to negotiate with the creditor until you are able toreach a payment schedule that is acceptable to both parties. Keep copies ofproof of any payments you make.

If you are unable to continue meeting paymentarrangements that you have agreed to, you should notify the creditor and try tomake other mutually satisfactory arrangements.

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Are Any Of The Debtors Goods Exempt From Seizure By The Creditor

Under the ExecutionAct, a debtor is entitled to certain exemptions from seizure ofpersonal property such as:

  • clothing
  • household furniture, utensils, equipment, food andfuel
  • tools and instruments used in the debtors business
  • tools, books and instruments used for the tillageof the soil or farming and livestock, fowl, bees and seed and
  • one motor vehicle worth less than the specifiedamount.

The debtorhas a right to choose the goods that make up the exemptions.

Full details of the exemptions under the ExecutionAct and its regulations are available on the e-Laws website at:

Can You File Bankruptcy On A Judgement

Will Filing Bankruptcy Stop a Garnishment?

It is never too late to file bankruptcy on a judgment. However, there could be consequences of waiting to file bankruptcy until after you receive a judgment. Whenever you are struggling with debt problems, it can be best to seek advice from a qualified bankruptcy lawyer earlier rather than later.

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Understanding How Creditor Lawsuits Work

If you dont pay your credit card bill or some other debt, you can expect your creditor to take you to courtespecially if you owe a significant amount of money. Most creditors must file a lawsuit and get a judgment before taking additional steps to force you to pay what you owe through collection tactics that include emptying your bank account or deducting money from your paycheck.

If the creditor wins the lawsuit, you might be able to get rid of the liability in bankruptcybut not always. Some money judgments arent wiped out in bankruptcy. Also, a creditor can use a money judgment to put a lien on your property, and they arent always easy to get rid of in bankruptcy. So its important to evaluate your optionsand possibly file your bankruptcybefore the court rules against you.

Judgment Liens V Other Secured Debt

A judgment lien is treated differently than some other types of secured debt in bankruptcy. Thatâs because bankruptcy exemptions protect certain property from creditors–even a judgment creditor.

To illustrate, letâs look at two different scenarios involving a lien on a motor vehicle. If you have an outstanding balance on your car loan and the automobile was pledged as security when you purchased the car, bankruptcy doesnât undo that pledge. Bankruptcy may relieve you of personal responsibility for the debt, but the security interest remains. The secured creditor–the lender who provided the purchase money for your car–has a contractual right to take back the car if you donât pay. Under some circumstances, the bankruptcy court may be able to reduce the amount due. But, you canât simply keep the car and discharge the debt.

A judgment lien is different because there was no security contract – you didnât voluntarily grant the creditor a lien. Instead, this type of lien is entered in an attempt to collect a debt. That means exemptions apply, and you may be able to avoid the lien. Imagine that youâve filed using federal exemptions, and that your car is worth $3,000. Your credit card company has a $5,000 judgment against you, and has placed a lien on your car.

The federal exemption protects up to $4,000 in value in a motor vehicle. That means the full value of your car is exempt and the judgment lien can typically be avoided.

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I Have To Complete A Financial Information Form And Give A Copyto The Judge At The Examination Hearing What Happens To It After The Hearing

The judge at the examination hearing may considerthe information you provide in the Financial Information Form and anysupporting documents when making a decision at the examination hearing. Youshould ask the courtroom clerk to return these documents to you after thehearing has finished because they may not be available for you to pick up afterthe hearing. The Financial Information Form and supporting documents do notbelong in the court file. Court files are available for public viewing, unlessan order of the court provides otherwise.

What To Do If There Is A Lien On Your Real Property

What happens when you file for bankruptcy?

If the judgment creditor records an Abstract of Judgment in a county where you own land, a house, or building, they can put a lien on that property. This means that you might not be able to sell that property until the lien is removed.

To remove a lien you have to pay the judgment and get the judgment creditor to complete a notarized Acknowledgment of Satisfaction of Judgment . Either party can eFile the form to the court. Then the judgment creditor or you have to record a certified copy of this form in the county where the property is. The plaintiff can also have a second form signed and notarized to record with the County Recorder. There is a fee to record the Satisfaction. For more information on this process, go to the Orange County Recorders website. For the locations of other County Recorder in the State of California and their recording fees check that Countys website.

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