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Your Option Against Judgment Liens

November 15, 2021
Your Option Against Judgment Liens

When you make large purchases, such as a home, a vehicle, or a piece of equipment, you often put the purchase up for collateral. For example, when you buy a home, you sign a note, which is the contract stating that you owe the creditor money. The note is guaranteed by a mortgage, which is a document that gives the creditor permission to take your home if you default on payments. It works nearly the same way with a car. If you borrow money to buy a car, the creditor signs the title as a lienholder. If you default, this gives the creditor permission to repossess the vehicle.

The Judgment Lien

A judgment lien is a lien on property you own. For example, if you were to buy a piece of equipment, the creditor could ask for collateral. You might put your vehicle up for collateral. If you default on the payments, the creditor can file a judgment lien on the car, repossess it, and sell it to get the money you owe.

In another case, you might owe someone money for medical bills, work on your home, or for some other reason. The creditor could ask the court for a judgment lien on any property you own to collect its capital. For example, you had significant emergency surgery but did not have health insurance. The medical facility could file a judgment lien against your home. If you ever sell your home, the judgment lien is paid before receiving any equity out of the house.

Can I Stop a Judgment Lien?

In some cases, you can stop a judgment lien and get rid of it for good. Depending on who filed the lien, you can include the lien in a Chapter 7 bankruptcy. If the bankruptcy court discharges the default, the lien is also removed.

Debts That Cannot Be Discharged

Some debts cannot be discharged through bankruptcy. Even if you include them in the bankruptcy, the court will not remove these liens. Also, if you forget to include a lien in the bankruptcy, the bankruptcy court cannot discharge the lien. Debts that you cannot have discharged include:

  • Child support.
  • Spousal support.
  • Tax liens. However, some local, state and federal tax liens could receive a discharge if they are several years old.
  • Debts you owe because of your actions or inactions that caused intentional and malicious injury to property or another person.
  • Debts; you owe because you caused personal damage to someone else in a motor vehicle accident caused because you were driving under the influence of drugs and alcohol.

Contact SM Law Group

If someone filed a lien against you, it might be discharged if you file Chapter 7 bankruptcy. If you are not sure whether you can include the lien against you in a bankruptcy, our attorneys can let you know. Contact SM Law Group for a free consultation and discuss your options, including filing Chapter 7 bankruptcy.

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