Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.
If it is a credit card debt and it becomes a judgment, after you file a bankruptcy it will be discharged, meaning it will be removed as a debt on your credit repoert.
However, the judgment would still be listed, if you file your bankruptcy after the judgment, however once the bankruptcy is filed your credit report would state that the judgment was discharged.
A credit card debt is unsecured, and it would have to be converted to a lien and then placed on your personal property. The process takes time and is not common, but if they do place a lien on your property, the bankruptcy would still discharge it, but you would have to file a motion to avoid the lien
Chapter 7 debtors and Chapter 13 debtors can avoid a judicial or nonpurchase money lien. The debtor should express his intent to avoid the lien in either the Chapter 7 Statement of Intention or the Chapter 13 Plan. The motion to avoid a lien needs to cite the debtor's right to eliminate the judicial lien under 11 U.S.C. §522 of the Bankruptcy Code
In terms of the unsecured lien being placed on your car, they would take precedence to the original lien, and they would be limited as well the the State exemptions amount as well.
In CA, you can exempt an amount of $2550 or $3300 depending on which CA exemptions you choose. Meaning if the car has equity less than the exemption amount they cannot attach a lien on it.
You can find the CA exemptions for all property here:
Thanks wallstreetesq. Is a judgment that's listed on my report as discharged every bit as detrimental to my credit score as an unsatisfied judgment? Is there no way to ever remove the record of the discharged judgment?
An unsatisfied judgment is worse as the balance is reported as debt so our credit score is worse, also after 8 years the bankruptcy and all creditors affected would be removed.
Also be aware, after a chapter 7, your score will improve yearly and after a few years your score will be good enough to qualify you for credit again.
I think I didn't express that right. What I mean to say is, in terms of impact on my credit score is a "BK plus a discharged judgment" much worse than just a "BK"? Or about the same?
No they are the same, the bankruptcy itself negates all negative reports prior since it discharges them through bankruptcy.
Another issue you may be interested in is this, if you filed a bankruptcy and had a credit score of 800 the bankruptcy would lower it estimated 200 points, if you had a credit score because of the judgment of 600 and the bankruptcy lowers it to 500, that is where you are hurt, if the bankruptcy is filed after the judgment.
Yeah, that makes sense. I really appreciate the information!
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