What happens to judgments when you file BK?

[Jammed]

If you have uncollected outstanding judgments (for CC) against you when you file for chapter 13, what happens to those judgments? Do they get added in with other unsecured creditors that you repay during the BK or are the judgments eliminated without needing to be repaid during BK?

[lrprn]

If your cc judgments are for wage garnishments, then the wage garnishments will stop when you file your 13.

However, if the cc judgments placed a lien on one of your secured assets (usually your home), then at the successful end of your plan in 3-5 years you owe nothing to the creditor but still have to petition the court to have the lien removed from your property so when you decide it's time to sell, the empty lien doesn't make selling your asset harder.

[rrockinggramma]

I had 2 of those judgments when I filed. I took my paperwork of filing with my case number (original) and showed it to the court clerk. They made copies and put it in the file and also filled out a sheet for the judge that stated that this debt was now included in bk and all collection was suspended without prejudice (meaning if I didn't complete they could come after me)

Once I was discharged I went back to the court and showed them my discharge paperwork and they again filled out a report for the judge (he had to sign off on it and I got a stamped copy in the mail) that this judgment was now discharged in BK.


The court made a copy of the creditor matrix showing this debt and the court as listed separately as creditors.

On my credit report, one judgment showed up as IIB zero balance and the other one continued to show a balance due. I protested with the credit bureau but the original creditor refused to change it (according to the bureau)
But once I went to the court after discharge, both judgments completely disappeared from my credit report within a day.

But you will have to do the leg work and take the paperwork to the clerk's office. They are notified of course because you listed them but in my case, they didn't pay any attention to the notification until I made a point of letting them know these were included in bk. Mine were unsecured to anything and so vacating them was not necessary. If yours are attached to your property then you will have to get them vacated after discharge by filing a motion with the court.

[Jammed]

Thanks for sharing your experience. I'm trying to hold off about a dozen CC and a mortgage company for 6 more months but a few are starting to sound serious so I'll probably have a few judgements to deal with.

[holding on]

Thanks for sharing your experience. I'm trying to hold off about a dozen CC and a mortgage company for 6 more months but a few are starting to sound serious so I'll probably have a few judgements to deal with.

Am I correct in assuming from your words that you haven't had the judgements handed down to you yet? If that's the case, If you have property, I believe you should do everything possible to delay any creditors getting judgements. I will admit I am not too knowledgeable on what 'everything possible' could consist of. But I mention that because if you can prevent any judgements by cc creditors, when you file BK those debts go under unsecured and you have a chance of not paying that back 100%.

If you do get judgements though, and they are filed in the county where your property resides, then a lein is easily gotten against your property, and then that cc debt is now secured. Secured debt is required to be payed back 100%. Unfortunately my lawyer dropped the ball on that and put the amount of my judgement as unsecured. You can imagine I was none too happy when he turned around and said "oh that's secured, you have to pay that totally." I learned that one the hard way.

[Jammed]

Thanks Holding On. I didn't realize that judgments could become secured debt.

We don't have any judgments yet - but one CC is with a law firm that keeps calling and two other accounts are with CAs (the rest are still with the original creditor). We have a rental property in NJ which is in pre-foreclosure (and NJ is a deficiency state). Yes, I do have property that a lien could be placed on (1 house I plan to keep, the rental almost in foreclosure, and paid off cars). So, I'll have to keep DV & C&D as long as possible to delay things.

[howdidithappen]

What is a deficiency state?

[Jammed]

A deficiency state is a state that permits mortgage companies to sue a person after foreclosure to get a judgement for the difference between what the sold for in foreclosure and the mortgage amount owed.