Bankruptcy and judgments are two legal terms that often go hand in hand. Bankruptcy is a legal process that helps individuals and businesses who are struggling with debt to get a fresh start. On the other hand, a judgment is a court order that requires a person or entity to pay a sum of money to another party. But can a judgment be discharged in bankruptcy?
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This topic is important because many people who are facing financial difficulties also have judgments against them. Discharging a judgment in bankruptcy can help individuals to eliminate their debt and start anew. In this post, we will provide an overview of judgments and bankruptcy, explain how a judgment can be discharged in bankruptcy, and discuss the effects of discharging a judgment.
What is a Judgment?
A judgment is a court order that requires a person or entity to pay a sum of money to another party. Judgments are typically obtained in civil court cases, where one party sues another for damages or other relief. Judgments can also be obtained in criminal cases, where a defendant is ordered to pay restitution to the victim of their crime.
There are two main types of judgments: money judgments and non-money judgments. A money judgment requires the defendant to pay a sum of money to the plaintiff. A non-money judgment requires the defendant to take some action or refrain from taking some action. For example, a non-money judgment may require a landlord to make repairs to a rental property.
Judgments are obtained through a legal process that involves filing a lawsuit, serving the defendant with a copy of the complaint, and going through a trial or settlement process. If the plaintiff wins their case, the court will issue a judgment in their favor.
Bankruptcy Basics
Bankruptcy is a legal process that allows individuals and businesses who are struggling with debt to get a fresh start. Bankruptcy is governed by federal law and is available to all individuals and businesses in the United States.
There are two main types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy is a liquidation bankruptcy that allows individuals to eliminate most of their unsecured debt, such as credit card debt and medical bills. Chapter 13 bankruptcy is a reorganization bankruptcy that allows individuals to repay their debts over a period of three to five years.
To file for bankruptcy, an individual or business must first meet certain eligibility requirements. For example, individuals must pass a means test to determine whether they qualify for Chapter 7 bankruptcy. Businesses must meet certain size requirements to be eligible for bankruptcy.
Can a Judgment Be Discharged in Bankruptcy?
A judgment can be discharged in bankruptcy, but not all judgments are dischargeable. Dischargeable debts are debts that can be eliminated through bankruptcy. Non-dischargeable debts are debts that cannot be eliminated through bankruptcy.
Types of judgments that can be discharged in bankruptcy include:
- Money judgments obtained in civil court cases
- Restitution orders obtained in criminal court cases
- Judgments for breach of contract
Conditions for discharging a judgment include:
- The judgment must be listed on the bankruptcy petition
- The judgment must be dischargeable under the bankruptcy code
- The debtor must not have committed any fraud or other misconduct in connection with the judgment
Exceptions to dischargeability include:
- Judgments for willful or malicious injury to another person or property
- Judgments for debts incurred through fraud or other illegal means
- Judgments for certain taxes and fines
Steps to Discharging a Judgment in Bankruptcy
Discharging a judgment in bankruptcy involves several steps:
- Filing for bankruptcy: The debtor must first file a bankruptcy petition with the bankruptcy court.
- Filing a motion to discharge the judgment: After the bankruptcy petition is filed, the debtor must file a motion to discharge the judgment with the court.
- Attending the hearing: The court will hold a hearing to determine whether the judgment should be discharged. The debtor must attend the hearing and provide evidence to support their motion.
- Obtaining the discharge order: If the court approves the motion to discharge the judgment, it will issue a discharge order that eliminates the debt.
Effects of Discharging a Judgment in Bankruptcy
Discharging a judgment in bankruptcy can have several effects:
- Elimination of the debt: Discharging a judgment in bankruptcy eliminates the debtor’s obligation to pay the debt.
- Protection from creditors: Discharging a judgment in bankruptcy provides the debtor with protection from creditors who may try to collect the debt.
- Improvement of credit score: Discharging a judgment in bankruptcy can help to improve the debtor’s credit score over time, as they eliminate their debt and make timely payments on their remaining debts.
Conclusion
In conclusion, a judgment can be discharged in bankruptcy, but not all judgments are dischargeable. Discharging a judgment in bankruptcy involves several steps, including filing a motion with the court and attending a hearing. Discharging a judgment in bankruptcy can help individuals to eliminate their debt, protect themselves from creditors, and improve their credit score over time. If you are considering bankruptcy as a way to discharge a judgment, it is important to consult with an experienced bankruptcy attorney to determine whether bankruptcy is the right solution for your financial situation.
FAQ
What is a judgment?
A judgment is a legal decision made by a court that determines who is responsible for a debt or damages in a lawsuit.
Can a judgment be discharged in bankruptcy?
Yes, a judgment can be discharged in bankruptcy, but it depends on the type of debt and the bankruptcy chapter filed.
What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 bankruptcy is a liquidation of assets to pay off debts, while Chapter 13 bankruptcy is a reorganization of debts into a payment plan.
Can a judgment be discharged in Chapter 7 bankruptcy?
Yes, a judgment can be discharged in Chapter 7 bankruptcy if it is a dischargeable debt, such as credit card debt or medical bills.
What is a dischargeable debt?
A dischargeable debt is a debt that can be eliminated through bankruptcy, such as credit card debt, medical bills, and personal loans.
Can a judgment for fraud or intentional injury be discharged?
No, judgments for fraud or intentional injury cannot be discharged in bankruptcy.
Can a judgment for child support or alimony be discharged?
No, judgments for child support or alimony cannot be discharged in bankruptcy.
Can a judgment for taxes be discharged?
No, judgments for taxes cannot be discharged in bankruptcy.
Can a judgment for student loans be discharged?
In most cases, judgments for student loans cannot be discharged in bankruptcy.
Can a judgment for a secured debt be discharged?
No, judgments for a secured debt, such as a mortgage or car loan, cannot be discharged in bankruptcy.
Glossary
- Judgment: A ruling by a court that determines the outcome of a legal dispute.
- Discharge: The legal release of debts in a bankruptcy case.
- Bankruptcy: A legal process in which a person or business seeks relief from debts they cannot pay.
- Chapter 7 bankruptcy: A type of bankruptcy that involves liquidating assets to pay off debts.
- Chapter 13 bankruptcy: A type of bankruptcy that involves creating a payment plan to repay debts over time.
- Creditor: A person or business to whom a debt is owed.
- Debtor: A person or business who owes a debt.
- Exempt property: Property that is protected from being sold in a bankruptcy case.
- Non-exempt property: Property that can be sold to pay off debts in a bankruptcy case.
- Automatic stay: A legal order that stops creditors from collecting debts during a bankruptcy case.
- Bankruptcy trustee: A person appointed by the court to oversee a bankruptcy case.
- Proof of claim: A document filed by a creditor that outlines the amount of debt owed.
- Adversary proceeding: A separate lawsuit filed within a bankruptcy case.
- Reaffirmation agreement: An agreement between a debtor and a creditor to repay a debt.
- Priority debt: A debt that is given priority over other debts in a bankruptcy case.
- Secured debt: A debt that is secured by collateral, such as a car or house.
- Unsecured debt: A debt that is not secured by collateral.
- Means test: A calculation used to determine if a debtor qualifies for Chapter 7 bankruptcy.
- Bankruptcy discharge: The legal release of a debtor from their debts after a bankruptcy case is completed.
- Dischargeable debt: A debt that can be eliminated in a bankruptcy case.
- Judgment lien: Judgment liens are a legal claim placed on a property or asset by a creditor to secure payment of a debt owed by the property owner. It is a court-ordered lien that gives the creditor the right to seize and sell the property to satisfy the debt if the debtor fails to pay.
