Yes, you can file bankruptcy against most civil judgments or lawsuits. Unless the debt is nondischargeable debt, such as student loans, domestic support obligations, debts owed to the government, debts incurred from intoxicated driving, or debts incurred because of fraud, filing for bankruptcy can remove your liability. Bankruptcy does not automatically remove liens placed against assets. However, you may petition the court to void liens on your property, which may or may not be successful depending on the context of your case. Removing liens is a legally complex area of bankruptcy law, and is best discussed with an accredited bankruptcy lawyer.
Can You File Bankruptcy on a Judgement Against You? FAQs
Yes, you can file for bankruptcy if you have received a judgement against you. Bankruptcy will stay or delay collection of the judgement and may even discharge it in some cases.
The type of bankruptcy that is best for your situation depends on your individual financial circumstances. Generally, filing Chapter 7 or Chapter 13 will provide protection from creditors attempting to collect on judgements against you.
In most types of bankruptcies, certain assets, such as equity in a home, are protected and cannot be taken by creditors. It is important to consult a bankruptcy attorney to determine what assets may be subject to liquidation.
You can usually file for bankruptcy within 30 days of receiving the judgement against you. However, it is advisable to speak with a qualified bankruptcy attorney as soon as possible so that they can assess your individual situation and provide guidance on the most appropriate action.
In some cases, yes – filing for bankruptcy does not always result in discharge of all debts, including judgements against you. Speak with a knowledgeable attorney about your particular circumstances and any potential consequences that may arise from filing for bankruptcy.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.