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DrakeLAW, Attorney
Category: Bankruptcy Law
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Experience:  Attorney at Drake Law Firm PLC
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This is to this question. How do the credit companies

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This is a follow up to this question. How do the credit companies (Equifax, Transunion) know about this judgement. Does the court send a report. Do they scan public records.
With that in mind if the judgement is released and disappears, how do I make the credit company aware of this?

Hi, my name is ***** ***** I look forward to helping you, please give me a moment to review and possibly research answers to your question.

Sorry, I was pulled away for awhile. Yes, the courts routinely send the judgment information to the three bureaus.

Well, legally, the creditors that filed those judgments should be taking whatever actions are needed to make those judgments disappear from your credit report because if they don't that is still a violation of the Stay or Discharge Injunction.

However, in practice they may not, and if you want the easier route, after the judgments are vacated you can file a dispute with each of the bureaus and go through the specific process for that which will result in the bureau seeing the judgment is vacated and then the bureaus must correct that information. If they fail to do so and you followed the procedure correctly you would have a claim against the bureaus.

If you were to google something like "credit bureau dispute" you will find all kinds of information and forms that will help you, there is a ton of that info online.

Does this answer your question?

Customer: replied 11 months ago.

Bankruptcy 7 was filed 12/15/2015 and discharged 3/15/2016.

This Judgement had a non-execution clause. I think this means we agreed to pay off loan and they won't file a Judgement but can if we don't make payments. This was signed 9/15/2015.

Since we filed Chap 7 in December, and they (the creditor) had the non-execution agreement signed in September but did not file. Would the Chapter 7 trump their Judgement claim?

They also filed against my wife, but without the non-execution agreement and that is on her credit report. This was a different claim by creditor.

Both Judgments were placed the day our Chap 7 was discharged on 12/15/2016.

Yes, non-execution clause means they will not try to collect so long as you are paying and yes absolutely the bankruptcy trumps and overrides all of that.

Texas is a community property state so even if your wife did not join in the filing she would have the same protections against all creditors.

Customer: replied 11 months ago.

Sorry this is ongoing, but I have read further.

Both are "agreed upon" judgments, both filed 9/2015. Chapter 7 was entered into Dec 15,2015 and discharged March 15, 2016. Both now have zero balances.

Two questions I am getting different answers on are (google search). Please remember that these were in place "prior to" the filing of the chapter 7.

1. Does the chapter 7 make the judgement go away as if it were never filed or on my credit record?

2. I have read that if it stays in place, that is for 10 years and even though it has a zero balance, if I sell my house or apply for another home loan I may have to pay these off the judgments anyway just to get credit or a home loan, auto loan etc. That would be necessary to get a reasonable loan.

1. The chapter 7 does not make them go away as if they were never filed or not on your credit report. They actually remain on there, however you no longer have any legal obligation to pay for them and your discharge of them is noted on your credit report.

2. No, you do not have to pay those judgments off to get new credit. Your legal obligation to pay them has been discharged. One issue, you need to find out if the judgments were recorded with the county. If they were, you could have a real estate issue in the future and you are best off taking care of that now with your bankruptcy.

Customer: replied 11 months ago.

Yes the paperwork was filed with the county. One was a Agreed Final Judgment (wife's 1,750.00) and the other was a Agreed Final Judgement with non-execution agreement (me 3,150.00). Her shows zero balance mine shows the full amount on credit record. I think mine can be taken to zero balance by showing the credit bureau a copy of the discharge.

What kind of real estate issue? If they can't be remove how do I take care of them? My bankruptcy attorney does not seem to be concerned with this. However I think she does not want to mess with it. maybe there is nothing that can be done.

Do you own a home? I seem to recall this started with a question about refinancing or selling a home, is that correct?

Customer: replied 11 months ago.

Yes I own a home. There is a loan, we just had it re-fied. But will probably sell in the next few years.

Ok, that is what I thought. So the liens are still there because they are recorded and this could become a problem later when you try to sell if the title company does not understand how that works with the discharge.

Do you have equity in the home? Can you guess for me how much equity there was in the house at the time those judgments were recorded with the county?

Customer: replied 11 months ago.


Oh that's right, Texas has unlimited homestead exemption. Ok, so here's the answer, those judgments that were recorded never actually attached to your property because of the homestead exemption. However, some title companies don't know that and cause problems when you go to sell the property and they sometimes say you must pay off those judgments before you can close. That is not true.

So the way to deal with that is get an order from the bankruptcy court confirming that those liens are "avoided" and not attached to your property.

Customer: replied 11 months ago.

So if I use that term "avoided" that is a legal terms my attorney would understand. OR am I allowed to ask the judge myself?

PS I am a carpenter, that equity is from flipping a few houses when I was young and killing myself making payments on a 15 year note. Though having a paid off house would be great, but now taxes and insu are 1,200.00 month. Moving to houseboat when I retire in a few years.

I really appreciate all your info. Going to "tip" you, but don't get a job draw until mid-next week. Will rate and pay then. Thanks

That is great generating that much equity and the plan for the houseboat sounds amazing.

Yes, "avoid the lien" is the legal term your attorney should know. You can ask the judge but it needs to be done with a motion, check with your attorney first.

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