Just got off the telephone with a client of mine from 2002. She had just done a credit check and surprised to find a judgment on her record for a debt that was included in her bankruptcy filing. She called my office all bent out of shape and yelled at my receptionist telling her that this was something we should have taken care of for her. I touched on this topic in an earlier post but will take some time to go over it now. As for the problem….we’ll take care of it. I pointed out to her that we informed her in writing at the time she hired us that judgments are not removed from the record or credit reports because someone files a bankruptcy case. Of course, she didn’t remember that…but that is why we lawyers hang on to every scrap of paper that is generated in a case. She has decided to hire us to perform a judgment removal for her.
First off, a person has to understand that bankruptcy takes care of debts. Judgments are simply not debts. They may seem like debts to the lay person but rather they are a legal artifice that helps judgment creditors collect their money. Typically you need a judgment to do a bank levy, wage garnishment or any of the other less commonly used methods to execute on assets in order to satisfy a judgment. Judgments then, are court orders that state that the court has made a finding after a hearing on the matter and agrees that you owe someone some money. However, and as discussed above…in and of themselves they are not in the nature of debt. Since bankruptcy removes debts and not court orders a discharge of the debt in a bankruptcy case does not serve to remove the record of the judgment.
After the bankruptcy order has been issued and the debt has been discharged in Federal court (2 different court systems here) we can then file an action in state/district court where the order on the judgment was issued and request an order removing the record of the judgment. The argument is based on the fact that the underlying debt that supported the issuance of the order for judgment is now discharged. A certified copy of the bankruptcy discharge is attached to the application for judgment removal so there are a few steps to take in terms of paperwork, serving the appropriate parties in a timely manner and noticing them regarding a hearing on the matter. In the majority of cases there is no problem getting the judgment removed without any great difficulty.
If you have debt issues or questions about bankruptcy filing in regard to either Chapter 7 or Chapter 13 bankruptcy for either individuals or small business do not hesitate to contact us.
Offices Located in Apple Valley and Rochester, MN
Direct email for Dave Kingsbury is email@example.com
Visit our web site at www.kingsburylawoffice.com for information to common questions regarding filing bankruptcy or to download our document package if you’d like to schedule a consultation
David Kingsbury, attorney
14827 Energy Way
Apple Valley, MN 55124