How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask grantlawpc Your Own Question
grantlawpc, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31
Experience:  United States Bankruptcy Code: Chapter 11 Business Attorney; Restructuring and Recoveries
Type Your Bankruptcy Law Question Here...
grantlawpc is online now
A new question is answered every 9 seconds

What happens to judgements when Bankruptcy is declared. What

This answer was rated:

What happens to judgements when Bankruptcy is declared.

What is the general procedure for filing bankruptcy.

what property and assets are exempt
Judgments are generally discharged.

The general procedure for filing is filing the voluntary petition, schedules, statement of financial affairs, creditor matrix, means test and a few other miscellaneous documents with the Bankruptcy Court and paying the filing fee of about $300.

About 30 days later, you will attend a 341 meeting at which the trustee may ask you questions about your assets. About 60 days later you get your discharge unless someone has objected.

Typical items that are exempt are equity in your home, your car, your household items (furniture, clothing, etc.). Items that are not generally exempt are large sums of cash, investment accounts, unusual or extremely valuable assets.

If you want to keep your house or car, you must keep up with payments to keep them.

Common claims that are not dischargable are IRS taxes, fraud claims, student loans.

Are there any particular assets you want to exempt that I didn't discuss above? Is there anything special about the judgment, or is it just for credit cards?

Did I miss any part of your question? Please let me know!
Customer: replied 5 years ago.
the judgement is just for credit cards, however , I am paying on a levy to the IRS from my social Security Check what effect does the tax lien have on the later judgement if any. Can they take a lien when I already have a tax lien?
Under section 522(f) of the bankruptcy code a judgment lien can be removed/avoided from your real or personal property if it meets with the following requirements:
Judicial Lien- the lien must have been obtained as a result of a judgment or other legal process. The judgment lien cannot have resulted from you consensually agreeing to place a lien on your property.
Non-possessory and Non-purchase Lien – In order to qualify the creditor cannot have actual physical possession of the asset themselves but simply a legal claim against it. The lien cannot have resulted from you consensually placing a lien on the property in exchange for the creditor extending you creditor to purchase the asset or refinance.
Property-The lien can be avoided on items such as household goods-clothing, furniture, appliances, radio, television, medical equipment, kitchenware or real estate.
Entitlement to Exemption is Impaired-The judicial lien must impair your right to claim a bankruptcy exemption in order to avoid the lien. The judicial lien would damage your ability to claim the full value of the vehicle as a protected asset using the wildcard protection.

Since recent IRS taxes are not dischargable, the tax lien will survive.

Yes, they can file the lien even if you already have a tax lien, but the question is whether there is any equity in the property over and above prexisting consensual liens (the bank) and the IRS...

So, if the property is exempt under applicable law (bankruptcy or state law), then you can remove the judgment lien in the bankruptcy. If the abstract of judgment had not been filed prior to the bankruptcy, then the debt is gone and they couldn't thereafter file the lien.

Follow up?
Customer: replied 5 years ago.

A judgement was entered against me , I completed the motion to claim exempt property form GS IC-1603 (c) and mailed , i was notified that it was 2 days late,( i think they have the wrong server date.) I was told that they can take everything I own. All of my property was exempt on the form. I really don't own anything but my car, some musical Instruments, electricians tools , clothes and household goods. I am 69 years old I dont have way to get another car, if i did I guess they would take that to. Is there anything I can do ? Is bankruptcy an option? do I have any rights at this stage? how about state or Federal? Thanks?


Optional Information:
State/Country relating to question: North Carolina

Already Tried:
called the civil Clerk ,Talked to the sheriff deputy, inconclusive

Since I'm not a North Carolina lawyer, I can't speak specifically to the state law exemptions and procedures you are mentioning. Most states don't have a deadline to claim an exemption like you are describing--the property is just exempt or not. For example, in Texas you would be safe just as you sit now. You may want to post a specific question as to the North Carolina exemption laws (or just Google it).

The Bankruptcy Code allows you to choose as exemptions either the state law or a set of federal law exemptions. The federal exemptions would cover the items you describe presuming the car is not worth an enormous amount and has little (or nothing) left on the loan.

I think a bankruptcy would definitely help you. I really would run your scenario by a local bankruptcy lawyer. They are easy to find on the internet and many are very reasonably priced. I'm sure they are also very familiar with the problem you may be facing under the "untimely" claim of exemption.

Ultimately, the laws in most states are set up to take care of someone in your position and the federal bankruptcy exemptions do as well. However, I would get specific advice from a lawyer as to what you should do.

Good luck and let me know if I can be of further assistance!
grantlawpc and 2 other Bankruptcy Law Specialists are ready to help you
What did you finally decide? Did you ever contact a local lawyer?