Does bankruptcy get rid of a court judgment?

Does a judgment make a debt harder to discharge?

Not by itself. In bankruptcy, a claim is a right to payment whether or not it has been reduced to a judgment. A credit card balance is the same kind of debt before and after the card company wins in court.5

What a judgment does give the creditor is collection tools. Filing bankruptcy triggers the automatic stay, which stops lawsuits, garnishments and most other collection activity while the case is open.6

What happens to a judgment in Chapter 7?

A Chapter 7 discharge covers the debts you owed before the case was filed, except the kinds the law lists as exceptions. If the debt behind the judgment is discharged, the discharge voids the judgment to the extent it establishes your personal liability, whenever the judgment was entered.7 8 1

The discharge also works as a court order that bars the creditor from trying to collect the discharged debt from you personally. A garnishment based on that judgment cannot start again after the case.1

What about a lien the judgment put on your property?

A judicial lien is a lien obtained by a judgment, a levy or another court process. How a creditor gets one, and what property it attaches to, depends on state law.5

A discharge ends your personal liability, but a valid lien that was not removed in the bankruptcy case remains afterward, and the creditor may enforce it against the property. That is why a discharged judgment can still show up when you try to sell or refinance a home.2

Bankruptcy has a tool for this. You may remove a judicial lien to the extent it impairs an exemption you are entitled to. It does not happen on its own. The steps look like this:3 4

1. Claim the exemption. Exemptions are the property the Bankruptcy Code or state law lets you keep from unsecured creditors.6
2. Work out whether the lien impairs it. Add the judgment lien, every other lien on the property and the exemption amount. The lien impairs the exemption to the extent that total is more than your interest in the property would be worth with no liens.3
3. Ask the court. You file a motion with the bankruptcy court, or in a Chapter 13 case you can make the request through the plan served on the creditor.4
4. Expect a possible objection. The creditor may challenge the exemption you say the lien impairs.4

The tool has limits. It does not apply to a judgment that comes out of a mortgage foreclosure, and it cannot be used on a judicial lien that secures child support or alimony.3

What happens in Chapter 13?

The analysis is the same, with a different way of paying. An ordinary judgment debt is an unsecured claim. The plan does not have to pay unsecured claims in full, as long as you commit your projected disposable income for the plan period and unsecured creditors get at least what a Chapter 7 liquidation would pay them.9

When you complete the plan, the discharge covers the debts the plan provided for, with limited exceptions. A request to remove a judgment lien that impairs an exemption can be built into the plan itself.9 10 4

Which judgments are not wiped out?

The debt underneath decides it, not the fact that a court entered a judgment. Some kinds of debt survive bankruptcy whether or not anyone has sued.

For fraud and willful injury, the creditor's complaint is generally due within 60 days after the first date set for the meeting of creditors. A judgment already won in state court does not replace that step; ask a lawyer how an earlier judgment affects the bankruptcy court's decision.12 2 11