Judgement discharged in Chapter 7?

This is a discussion on Judgement discharged in Chapter 7? within the Consumer Bankruptcy forum, part of the BANKRUPTCY & DEBT COLLECTIONS category; Hi,I am in need of some legal advise.I am currently involved in civil litigation and may face a large judgement,potentially ...

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Old Mar 11th, 2008, 03:26 PM   #1
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Default Judgement discharged in Chapter 7?

Hi,I am in need of some legal advise.I am currently involved in civil litigation and may face a large judgement,potentially $20,000 to $30,000 dollars.If this would to occur I would be financially ruined.If I were to file for chapter 7 protection is the judgement discharged in the process.? Thank You.
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Old Mar 15th, 2008, 10:28 AM   #2
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Default Re: Judgement discharged in Chapter 7?

Anyone?
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Old Mar 17th, 2008, 09:34 PM   #3
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Default Re: Judgement discharged in Chapter 7?

Is this a dificult question?
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Old Mar 18th, 2008, 06:26 PM   #4
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Default Re: Judgement discharged in Chapter 7?

I really don't know. We filed Chapter 7, but we had credit card debt etc. Nothing as far as judgements. We were told any money owed to the government couldn't be discharged. But again, not the same as a judgement. Sorry I'm no help w/this. Good luck!
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Old Mar 21st, 2008, 03:44 PM   #5
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Default Re: Judgement discharged in Chapter 7?

Thanks for the reply.Seems this question is not a popular one.I wonder why it cant be answered by some of the Attorneys on this site.
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Old Mar 22nd, 2008, 04:35 PM   #6
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Default Re: Judgement discharged in Chapter 7?

Yes the bankruptcy stops the litigation and normally will discharge the obligation--you may file at any time even after judgment is reached. Severe fraud cases may not be automatically discharged but most other cases will be.

Bankruptcy counsel will confirm this for you based on your details.
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Old Mar 25th, 2008, 09:29 AM   #7
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Default Re: Judgement discharged in Chapter 7?

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Yes the bankruptcy stops the litigation and normally will discharge the obligation--you may file at any time even after judgment is reached. Severe fraud cases may not be automatically discharged but most other cases will be.

Bankruptcy counsel will confirm this for you based on your details.
Thank you for your response,their is no fraud involved,sounds like i may consider this.
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Old Apr 26th, 2010, 04:55 PM   #8
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Default Re: Judgement discharged in Chapter 7?

It sounds like you are scared of a judgment. IF the judgment comes, you can then file Chap. 7 then when you need it. Keep in mind that Chap. 7 is for people with limited assets basically less than $5k to $10k assets in most states. If you own more than that, you could face losing anything over and above your exemptions in order to satisfy the creditors, or the person who has the judgment against you. You can file Chap. 7 at anytime as long as you have not filed it in the last 8 yrs. If you file Chap. 7, and then a debt or judgment occurs after you've filed and your debt discharged, you're screwed. Your debts are only covered at the time you file Chap. 7. You can file Chap 7 anytime so I would not be in a hurry to do it until you definitely know that this $20K debt is included in the discharge. For credit debt, it's better to go ahead and get on with the Chap. 7 if you have limited assets and substantial credit card debt; do it before they get a judgment against you because the judgment will stay on your credit record for many years even though it may be uncollectable if your Chap. 7 is successful. Of course, the Chap. 7 will put a damper on your credit anyway but there's no sense in adding salt to the wound with the presence of a judgment on your record. Looks worse than just a bankruptcy. If credit debt is substantial, over $10k with any one card, they will likely sue you and get the judgment. Might as well get a jump on them and avoid the judgment. I've been through this. Filing Chap. 7 is no picnic, but it's certainly a better alternative than trying to get $40K credit card debt negotiated for a pay off. Even if the creditors allow you a big discount on credit debt, say settle for $10k, you still have to pay income tax and SOCIAL SECURITY taxes on the $30k forgiven debt. That can amount to $5k or more on $30k of forgiven debt. $1k for the bankruptcy cost (including the lawyer) is a bargain. Credit counsellors don't tell you about paying the income and SS taxes of the forgiven amount but it can be substantial. Chap. 7 is a lot cheaper but you can do it only once every 8 yrs. There is no income tax or SS tax due when debts are discharged!!!! Thats the beauty of Chap. 7. I suggest you continue to get information regarding your situation, though. Talk with a good lawyer.
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Old Jan 26th, 2012, 02:34 PM   #9
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Default Re: Judgement discharged in Chapter 7?

A Chapter 7 bankruptcy will only discharge the personal obligation or debt. It cannot typically remove the lien from the judgment from any land (home) that you own. There are some exceptions to this rule under 11 uSC 524. In other words, once discharged in bankruptcy the creditor can no longer pursue you for the debt, but if you were allowed to keep your home or any land the creditor could execute their judgment lien against that and force a sale of the land in order to satisfy their lien. The main thing a Chapter 7 bankruptcy does is to discharge your debts (ie, credit card bills, hospital bills) that haven't yet been reduced to judgment.
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Old Feb 1st, 2012, 02:23 PM   #10
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Default Re: Judgement discharged in Chapter 7?

Hello. You say you "may" face a judgment. So, with that being the case, yes bankruptcy definitely can come to your rescue, at least in the immediate. When I mean is the just by filing the petition in bankruptcy, an immediate and automatic stay comes into effect. In other words, it is federal law stopping current state law proceedings. But, be careful. There are tons of pitfalls. Confer with a lawyer -- easy to get a referral here: WORLD Law. Hope all works out.
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