Kansas City Missouri Bankruptcy

When you are served a lawsuit by a creditor, you are on notice that failure to take action will result in a judgment which is a finding by the court that you owe that money. A judgment can then be used to freeze your bank account, garnish your wages, or it may be a lien on your real estate.

Many people opt to file for a Chapter 7 bankruptcy to avoid the consequences of a judgement.  A dischargeable debt is one which can be wiped out by filing for bankruptcy while a non-dischargeable debt is one that cannot be cancelled – such as a student loan, a fine for a criminal offense, or certain other debts.  If you have been sued, bankruptcy will stop the collection attempts associated with that debt.  If it is not discharged in bankruptcy, the creditor can take action against you after the case is over.

When dealing with judgments in bankruptcy, you must be aware that a judgment lien may have been created. If you do not avoid this lien in the bankruptcy proceeding, the lien will still exist after the bankruptcy. If your home has very little equity, and you have claimed an exemption on the equity, then your attorney can ask the bankruptcy court to avoid, or get rid of, the judgment lien.  You must notify your attorney if you have been sued in the past as it may be difficult to tell if you have a lien on your home due to an old judgment.

You should talk to your attorney when about dealing with past judgments in bankruptcy. You should make your attorney aware of past lawsuits so that your attorney can file the appropriate motion to avoid any judgment liens from these suits.