"Motion To Set Aside"??

[kornellred]

In another thread, one of the very knowledgeable moderators of this forum (and they are all very knowledgeable) seemed to suggest that judgments are not automatically discharged in bankruptcy. This comment seemed to imply that there is some necessary step that must be taken in order to render the judgment ineffective - filing a Motion to Set Aside (or words to that effect.
The NOLO Chapter 7 Bankruptcy book has a paragraph on page 262 entitled "Lawsuit Judgments". One of the sentences - verbatim: "Money judgments are almost always dischargeable in bankruptcy, regardless of the facts that led up to the lawsuit in the first place." There are one or two exceptions dealing with debts that are not dischargeable under any circumstances.

Perhaps the moderator was referring to judgments attached to secured debt?

[MSbklawyer]

No, the mod was right.

Judgments do two things:

1. They evidence your personal liability for the debt.

2. They create a lien against all your property in the county or parish where they are enrolled.

The bankruptcy discharge takes care of the first problem: It discharges your personal liability for the debt.

However, the bankruptcy discharge does nothing to affect the lien created by the judgment. To get rid of the lien, you have to show that the lien impairs an exemption to which you would be entitled but for the lien. Different districts have different procedures, but here you do this by filing a "Motion To Avoid Judgment Lien". If none of your creditors object to your motion, the court issues an order avoiding the judgment lien which you then record with the judgment, thereby avoiding the lien.

[AngelinaCatHub]

In another thread, one of the very knowledgeable moderators of this forum (and they are all very knowledgeable) seemed to suggest that judgments are not automatically discharged in bankruptcy. This comment seemed to imply that there is some necessary step that must be taken in order to render the judgment ineffective - filing a Motion to Set Aside (or words to that effect.
The NOLO Chapter 7 Bankruptcy book has a paragraph on page 262 entitled "Lawsuit Judgments". One of the sentences - verbatim: "Money judgments are almost always dischargeable in bankruptcy, regardless of the facts that led up to the lawsuit in the first place." There are one or two exceptions dealing with debts that are not dischargeable under any circumstances.

Perhaps the moderator was referring to judgments attached to secured debt?

Yes I am familiar with what you stated in the Nolo book. However, the Federal Judge may not know of your civil Judgments. You must inform him and he will make a degree that you file with your civil court.

Your best bet is a good bk lawyer, but here is a link you might investigate for cursory information.

http://bankruptcy-law.freeadvice.com/consumer_bankruptcy/how-judgment-liens-affect-bankruptcy.htm

'Hub

[MSbklawyer]

In another thread, one of the very knowledgeable moderators of this forum (and they are all very knowledgeable) seemed to suggest that judgments are not automatically discharged in bankruptcy.

To say that a judgment is or isn't discharged is nonsensical. It's like asking "What color is Tuesday?". A discharge in bankruptcy means to absolve from further liability for a debt. A judgment can't be liable for a debt. A judgment is evidence of a debt. So no, a judgment can never be discharged because it can never be liable in the first place. Debtors are discharged, not judgments.

[AngelinaCatHub]

No, the mod was right.

Judgments do two things:

1. They evidence your personal liability for the debt.

2. They create a lien against all your property in the county or parish where they are enrolled.

The bankruptcy discharge takes care of the first problem: It discharges your personal liability for the debt.

However, the bankruptcy discharge does nothing to affect the lien created by the judgment. To get rid of the lien, you have to show that the lien impairs an exemption to which you would be entitled but for the lien. Different districts have different procedures, but here you do this by filing a "Motion To Avoid Judgment Lien". If none of your creditors object to your motion, the court issues an order avoiding the judgment lien which you then record with the judgment, thereby avoiding the lien.

Thank you MSBKL, I haven't seen you lately. Miss JK lawyer too. 'Hub

EDIT; BTW what color IS Tuesday?? LOL.

[hindsight]

I was the thread starter of which kornellred refers to.

I ask this question to my atty. 1st response from assistant.
quote
The judgment cannot be collected on while you are in bankruptcy if it a pre-petition debt. If it is post-petition and you have a wage order for the Chapter 13, then the creditor will have to wait in line until the BK is done.
unquote

still didn't asnwer my question and I am waiting for a better response.

my next question

The judgement is pre-petition. And it is a credit card
One of the same accounts the they have filed a claim for in our 13 plan
and will get something over the length of the plan.
So if they get paid eventually something in the plan, doesn't the
judgement need to be vacated? OR something?

We have no property, no house just and old truck and fairly new car that we are cramming in the bk

Judgement granted 12/11/09 filed bk 13 on 12/31/09, less than 90 days

[catleg]

Really the only reason to avoid a judgment is if it attaches to your real estate.

Otherwise it is uncollectible and you could just let it expire.

As far as credit reporting goes, a Judgment is bad whether it's paid or unpaid.
Best to just dispute it and try to get it removed. Normally since the court is not an information provider (the data is mined by a 3rd party) these tend to not get defended.

Just my opinion, I'd be interested in hearing any other thoughts.

[junker]

the trouble is SOME lawyers wont tell you that it costs EXTRA to have these liens removed......this is from California lawyer

Removal of judgment liens that impair your homestead exemption is handled by motion. The Law Offices Of ...........fees to handle your bankruptcy proceeding do not include prosecuting such a motion to avoid involuntary judicial liens. If you own a home that you wish to keep and continue paying for during and after bankruptcy and you believe there is a possibility that you may have been sued at some point in the past resulting in a judgment against you and, in turn, a judgment lien or abstract of judgment recorded by the judgment creditor in the county in which you live, it is not a bad idea to purchase a preliminary title report in order to determine whether filing a motion to remove an involuntary lien is advisable and necessary. If you do not intend to continue paying for the home, you are certain that no one other than a taxing agency has liened your home, or the balance owing to the lienholder does not warrant paying the approximately $150 to $300 to purchase a preliminary title report and the approximately $750 to $1,000 to have the law offices of....... prepare and file a motion to remove the lien, then purchasing a preliminary title report does not appear necessary. Otherwise, the Law Offices of .............suggests you do so.
....
Only judicial liens can be avoided if there is impairment of the exemption which you have claimed against your property. Other involuntary liens, such as statutory tax liens, mechanic's liens, and lis pendens are not avoidable pursuant to Section 522(f).

Bankruptcy Code Section 522(f) is a purely bankruptcy tool, available only during bankruptcy. If the bankruptcy case is concluded and you realize months or years later that there was a judgment lien against your home, often discovered during a potential sale or refinancing, you can seek to have the bankruptcy court reopen the proceeding so that a motion to avoid a judgment creditor's lien can be filed and prosecuted, but you must realize that it may take sixty days or more to obtain the bankruptcy court order, and there is no guarantee that the bankruptcy judge will grant the motion to reopen the case.

It is your responsibility to alert ............ to the presence of judgment liens against your property so that an appropriate motion can be prepared and filed. It is not up to the Law Offices of .......... to determine whether there are judgment liens against your property.

If you do not own real estate on the date of bankruptcy, the fact that a creditor may have recorded an abstract of judgment will be of no import; there is no need to file a motion to avoid the judgment creditor's lien since the lien did not attach itself onto any assets.

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Are There Any Other Types Of Liens Against My Assets That Can Be Avoided In Bankruptcy?

Yes. Nonpurchase money nonpossessory liens against certain exempt assets can also be avoided under Bankruptcy Code Section 522(f). For example, say you already own a television, a VCR, a stereo system, and/or a computer. You need a loan. So you go to an entity like Beneficial California or American General. You borrow a certain amount, say $5,000.00, and as collateral, you pledge your television, your VCR, your stereo system, and/or your computer. The lender, say Beneficial California, accordingly has a lien against the collateral pledged. Since the loan was not obtained in order to purchase the collateralized goods and you, not the lender, are in possession of the collateralized goods, Beneficial California's lien is nonpurchase money nonpossessory. Since household goods and furnishings are exempt in bankruptcy, under the Bankruptcy Code, Beneficial California's lien can be avoided.

As noted above, Bankruptcy Code Section 522(f) is a purely bankruptcy tool, available only during bankruptcy. If the bankruptcy case is concluded and you realize months or years later that there was a nonpurchase money nonpossessory lien against your household goods and furnishings or other exempt personal property, you can seek to have the bankruptcy court reopen the proceeding so that a motion to avoid the creditor's lien can be filed and prosecuted, but you must realize that it may take sixty days or more to obtain the bankruptcy court order, and there is no guarantee that the bankruptcy judge will grant the motion to reopen the case.

It is your responsibility to alert The Law Offices Of .......to the presence of nonpurchase money nonpossessory liens against your property so that an appropriate motion can be prepared and filed. It is not up to The Law Offices of ........... to determine whether there are nonpurchase money nonpossessory liens against your property.



If I Am Operating A Business And File Bankruptcy, Must