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Submitted by the Bond & Botes Law Offices - Thursday, February 21, 2013
When you have a debt that has been reduced to a judgment amount within a state court proceeding, that judgment can be filed with the probate court of the county in which you reside. The result of this filing is that it is now a judgment or judicial lien that will attach to any equity in real property that you currently own or any real property that you may acquire in the future. The ultimate ending is that the debt for this lien must be resolved by payment or some method before you can sell or transfer your currently owned real property or in most cases purchase new real property. The creditor holding the judicial lien may also choose to execute on the lien. This means that the creditor would force a legal sale of your real property in order to obtain the amount of the underlying debt or judgment amount.
Most all liens can be avoided within some type of bankruptcy filing. The appropriate United State Code Section that allows the avoidance of judicial liens is 11 U.S.C. Section 522(f) (2) (A), (B), and (C). Upon the filing of any type of bankruptcy, the automatic stay will go into place and stay any execution on the judicial lien.
Whether or not should file a chapter 7 straight bankruptcy or a chapter 13 debt consolidation depends on many factors, to include whether or not you currently own property and have equity in real or personal property. It can further depend on whether or not the real property you own is your homestead as judicial liens are only avoidable under bankruptcy as applicable to your homestead property.
If you currently own no real property or if you own real property that has no equity in it at the time of filing bankruptcy, and are otherwise eligible, a chapter 7 bankruptcy may be your best alternative to simply discharge the underlying debt that gave rise to the judicial lien and avoid the lien under Section 522 as referenced above.
