While filing for bankruptcy is a great way to eliminate your obligation to pay credit card debt, it is not so easy if you have a credit judgment against you. A judgment gives your creditor additional means with which to try and collect from you. They will have the ability to garnish your wages, levy your bank account and even take your property like a house or car. On top of that, some states make it so a judgment automatically gives your creditor a lien on your property. In other states, a creditor needs to first file the money judgment with a specific office before getting the lien. Once a creditor has a lien, it means they can sell your property and use the proceeds toward your judgment balance. They can also wait until you sell the property and get paid from those proceeds.
Your Lien in Chapter 7 Bankruptcy
If you file for Chapter 7 bankruptcy a lien on your property will not automatically go away. If it is a voluntary lien — one you allowed when purchasing the property — it will remain in place through your bankruptcy. The good news is that you are allowed to exempt a certain amount of property through Chapter 7 bankruptcy. If the judgment lien against you impedes your right to this, there is a good chance the court will agree to avoid it so you maintain clear ownership. If you are not entitled to exempt the property, the lien will remain in place.
When a lien remains in place through a bankruptcy, it means the creditor will be able to exercise their right to sell your property as soon as your bankruptcy comes to a close. When considering filing for bankruptcy to discharge credit card debt, it is in your best interest to do it before a judgment is issued against you. That is when your debt is dischargeable through bankruptcy and a creditor will not have lien on your property.
Experienced Bankruptcy Attorney Handles Clients in NJ
Filing for bankruptcy is a difficult process for anyone in any type of situation. It requires tedious work and attention to detail and can be quite involved. Hiring a bankruptcy attorney can ensure that your bankruptcy petition is filed correctly and quickly.If you are considering filing for bankruptcy in New Jersey, you should contact the Law Office of Joel R. Spivack in Cherry Hill. Mr. Spivack’s years of helping clients in New Jersey with their financial needs makes him the best choice when it comes to bankruptcy. He can also provide you with crucial information on alternatives to bankruptcy and what will be in your best interest.
Fill out the online contact form and begin your journey toward financial stability today.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.