Filing for bankruptcy is one way to seek financial relief if you are unable to repay your debts. There are many different types of debts that must be addressed in bankruptcy proceedings, including liens and judgments.
If you are considering filing for bankruptcy in order to eliminate liens and judgments, it's important to understand how these debts are treated in bankruptcy cases. The attorneys at Hammond Law Firm can help you understand what will happen after filing for bankruptcy. If you decide to take this step, our team will stand by your side and guide you through the entire process.
A judgment is a decision made by a court. Many judgments that are involved in bankruptcy cases are related to unpaid debts. For example, a credit card company can file a lawsuit against you for failing to make payments on your credit card debt. If the court sides with the creditor, the court will issue a judgment against you. There are many types of judgments that are not related to unpaid debts. For instance, a judgment may be filed against you if someone is injured in a car accident that you caused.
A lien is a claim that can be filed by a creditor against a debtor's property. There are two types of liens: consensual and statutory liens. Consensual liens are those that are agreed upon when you finance a purchase. For example, if you take out a loan to purchase a vehicle, the lender will put a consensual lien on the vehicle until the loan has been repaid. If you fail to repay the loan, the lender can repossess the vehicle.
A creditor must go through the courts to obtain a statutory lien, which will put a claim on the debtor's property for unpaid debts. For example, the government might put a tax lien on your property if you fail to pay property taxes. If you attempt to sell your home, this lien must be paid off before you receive any of the proceeds from the sale.
Both liens and judgments are financial obligations that must be paid, which is why they are addressed in bankruptcy cases.
Most lawsuit judgments are discharged in bankruptcy cases, which means the debtor will no longer be obligated to pay them after their case is closed. This only applies to judgments that are related to dischargeable debts such as credit card debt, medical bills, and personal loans. However, the judgment may not be eliminated in bankruptcy if it is related to a non-dischargeable debt. Some examples of non-dischargeable debt include:
The rules regarding liens in bankruptcy proceedings are complex. It may or may not be possible to remove liens in bankruptcy. Some of the factors that must be considered include:
If you're ready to take control of your finances-and eliminate your liens and judgments-contact the skilled bankruptcy attorneys at Hammond Law Firm as soon as possible. We have helped thousands of clients get their finances back on track by filing for bankruptcy. To schedule a free consultation, call 405-216-0007 or submit your information via the form on this website.