One of your outstanding creditors may file a lawsuit judgment to collect the debt you still owe them. Once this judgment is placed against you, you may be unsure what this means for the eligibility and timing of the bankruptcy filing you were considering. Overall, you may be concerned whether this will serve as another barricade in the way of your financial relief. If this is where your worries lie, please follow along to find out whether you can file for bankruptcy if you have a judgment against you and how a proficient Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can help you get through this very tricky financial situation.
Can I file for bankruptcy if I have a judgment against me?
In short, your capability to file for bankruptcy may be unaffected by a judgment currently placed against you. However, it may help your case to submit your bankruptcy petition before your bankruptcy creditors take such action. This is because once you are in the midst of your bankruptcy proceedings, your creditors are typically barred from participating in any further collection activities, such as collecting through a judgment. This is otherwise known as the automatic stay provision in bankruptcy law.
Can my bankruptcy filing get rid of a judgment against me?
While your bankruptcy filing may be able to stop your outstanding creditors from pursuing a judgment against you, it may not change their lien rights. That is, your bankruptcy case may do so much as discharge your eligible debts. Subsequently, this may eliminate your creditor’s judgment if it is for a dischargeable debt. However, your creditor’s judgment may create a lien, which essentially gives them the right to seize and sell your property to pay off your remaining debt.
With this, though, you may attempt to get rid of part or all of a lien. For starters, you may file a motion with the New York State Bankruptcy Court to avoid (i.e., eliminate) the lien. For this to work, you must demonstrate that federal and state law allows you to exempt (i.e., protect) part or all of the equity in the property with the lien placed on it. As an example, New York State law may exempt up to $150,000 of equity in the home you live in; up to $4,000 of the motor vehicle you use; and up to $1,325 of the jewelry and artwork you own; among other exemptions.
Otherwise, going outside of your bankruptcy case, you may attempt to settle and satisfy the judgment on your own accord. Then, you may request that your creditor file a satisfaction of judgment with the court on your behalf. In conclusion, at The Law Offices of Allen A. Kolber, Esq., P.C., we share the same goal as you, which is likely to achieve financial relief through the U.S. bankruptcy court system. So please do not hesitate to work with a talented Rockland County bankruptcy attorney from our firm today.
