If a creditor gets a judgment against you and the debt is dischargeable in a Chapter 7 bankruptcy, filing for bankruptcy will wipe out a creditor’s ability to collect. Judgments, however, can create a lien on your property .

What happens if a debtor is judgment proof?

Creditors can’t obtain money or property from a debtor who is judgment proof and a judgment-proof debtor might not need to file for bankruptcy. If you don’t have funds or property that a creditor can reach, a creditor can’t collect its debt. You’re “judgment proof.”

What happens to credit card debt when you file bankruptcy?

If a creditor gets a judgment against you and the debt is dischargeable in a Chapter 7 bankruptcy, filing for bankruptcy will wipe out a creditor’s ability to collect. Judgments, however, can create a lien on your property. And liens don’t go away in bankruptcy automatically.

Can a debtor fight a default judgment in court?

Fight the decision. In most debt judgments, consumers never got their day in court. Often these one-sided “default” judgments can be erased, giving the debtor another chance to fight the charges. If you’re willing to fight, the creditor’s case may even crumble in court, if it lacks documents proving the debt.

Can a debt be wiped out in Chapter 7 bankruptcy?

Filing for bankruptcy can get you out from under debt and give you a fresh start. In both Chapter 7 or Chapter 13 bankruptcy, many types of debt will be discharged (wiped out) at the end of your case. This isn’t true of all debts, however.

Can a judgment lien be removed from a bankruptcy?

For more information, read Nondischargeable Debts in Chapter 7 Bankruptcy. Obtaining a bankruptcy discharge may give you little comfort if the creditor’s lien can still attach to your assets, such as your house. There is a way, however, that you can get rid of the judgment lien in your bankruptcy. It is called lien avoidance.