Can Bankruptcy Help You Avoid a Lien on Your Kennesaw or Acworth Home?

A lot of times, I get questions about whether filing a bankruptcy will help you discharge or wipe out any judgment creditors. Mostly what happens is maybe there was a lawsuit filed against you, the creditor obtained a judgment and they filed that judgment against your house. It depends on how much equity you have in the house as to whether you can actually wipe out that judgment creditor. Let’s say for example, that the house is worth $200,000 that you owed only a $100,000 and the judgment was for $20,000. Well, in that instance because there’s plenty of equity in your house, that judgment creditor is fully secured, and so that judgment cannot be wiped out.
Let’s take a reverse of example though. Let’s say for example, the house is worth $200,000 and including the second mortgage, you’ve got a balance between both mortgages of a quarter of $1,000,000 and that the judgment creditor has a judgment of $30,000. Well, in that instance, because there’s no equity in the house your lawyer can file what we call as a judgment lien avoidance in the bankruptcy case itself, it’s a special motion in order to wipe out that judgment.
As the judgments themselves, those do not arise unless you’re sued first. Just make sure that if you receive any civil litigation papers from the sheriff’s office that you respond to them promptly, because if you do not what will happen is there will be what we call a default judgment entered against you, and there are very short and limited time frames in which you can actually fight that default judgment. If you fail to fight the default judgment it becomes a valid enforceable binding judgment.
Another point to note is this, if you are in fact dealing with a creditor, and you’re continuing to make payments to them, there usually is what we call a statute of limitations defense that is for that creditor to be able to collect on the debt that you owe them, they have to file the lawsuit within six years of your last payment. If you have one of these creditors who has used another company to try to collect the money from you and this has gone on for years, and years, and years. Don’t make even a partial payment to them, because if you make that partial payment to them that’s going to renew the statute of limitations, and give that creditor another six years to collect on that judgment against you.
If you have any questions about any of these matters that we’ve discussed so far call my office at 770-792-1000 and I’ll try to help you the best I can.