Judgement in BK

[CindyLou]

Can anone explain to me how judgements rendered prior to chp 7 BK for CC debt work? My brother has 5000 judgement from discover. He will be filing chp. 7 in 3 months. He has no assets. Will this totally wipe the judgement out will they be able to put a lien on something he aquires in the future. Also, the judgement is over a year old. He has been in drug rehab for few months and now finally has a job. Will they notify him before they garnish if they do???(his lives in Louisiana and garnishment is allowed) I didnt' have any judgements to deal with so this is one of the things that I cannot help him with.

[BK'd-Betty]

Hi Cindy!

The monies owed on the judgement will be discharged in the BK (if it is an unsecured debt such as a CC and not a lawsuit involving physical injury, drunk driving or some other thing that happened during the commission of a felony), however the Judgement will stay on his credit report.

He will have to go to the courts and have the Judgement vacated after his discharge, then he'll have to contact the CRA's and show them he had the Judgement vacated for it to come off his credit report.

Since the OC already has a Judgement, I don't think he has to be notified before a garnishment - I think they only have to notify the employer. But I'm not to sure about that part.

[BK&Filer]

He won't find out about any garnishment beforehand (he would find out at the same time or shortly after his employer). His best protection at this point is if his creditor isn't aware of his new job/employer. The creditor needs to know where he is employed in order to start a garnishment.

[GoingDown]

Yep, what they said is true.

His personal liability for the judgment will be discharged through bankruptcy. The only way a judgment lien survives bankruptcy is if he had real estate or other personal property of significant value before filing BK. The judgment lien would attach to his real estate property, for example, and would survive BK. Since as you said, he has no assets, there is nothing to worry about. The judgment will be wiped out.

After the judgment has been discharged through bankruptcy, he could buy real estate property and not have to worry about that old judgment attaching itself to his property.

If they find out where he is working they will probably garnish his wages, and they won't give him any warning about it before they do it.

The main way they find out if he is employed is by checking his credit report. If his new employer is listed on his credit report (perhaps because they did a background check on him? Maybe they checked his credit report before hiring him?), then they will call that employer and ask to speak to him. Sometimes they pretend to be a friend or a relative, anything, just to get some confirmation that he works there. Once they think he works there, they will have a process server deliver garnishment documents to the place where he works, and his employer will then notify him.

The good news is that as soon as he files BK, the garnishment will stop.