Can I Discharge a Judgment in Chapter 7 Bankruptcy?
If you are party to a lawsuit and lose your case, the court may issue a judgment for money damages against you. Such a judgment is an order for you to pay the money you owe to the plaintiff in the lawsuit. Judgments may arise from many types of lawsuits, including for personal injury, wrongful death, credit card collections, and more.
In many situations, people have judgments so high that they believe they may never pay them off. Further, the other party may be able to obtain a lien on your property or a garnishment of your wages in order to collect on the judgment. Such actions may put a further strain on your finances and may cause you to fall behind on your usual household expenses and bills. Overall, a judgment can have a significantly negative effect on your financial situation. This leads many people to wonder whether bankruptcy can possibly help their position.
Discharge of Judgments
Chapter 7 bankruptcy may be a viable solution for many people facing legal judgments. Chapter 7 bankruptcy discharges many types of debt, and a qualifying judgment is considered to be like any other debt. The automatic stay that goes into effect when you file for bankruptcy can also work to halt any pending legal actions or wage garnishments you may be facing.
Unfortunately, not every type of judgment is dischargeable in a Chapter 7 bankruptcy, as the law does exclude certain types of judgments. Some examples of judgments that are automatically disqualified from bankruptcy discharge arise out of the following types of cases:
- Certain types of debts to the government
- Child or spousal support orders
- Student loans
- Personal injury or wrongful death arising from a DUI
Other types of judgments are not automatically disqualified, but may be deemed nondischargeable by a court if a creditor challenges the discharge. These include judgments arising out of acts of fraud, embezzlement, or malicious acts of violence, such as assault.
Contact an Arizona bankruptcy lawyer for a free consultation
In order to determine whether bankruptcy can help with your judgment, you should not hesitate to consult with experienced Arizona bankruptcy attorney at the Ellett Law Offices, PC. Call our office today at (602) 235-9510 to schedule a free consultation today.