How Do Judgement Liens Affect a Bankruptcy?

A judgement lien is a court ruling that gives security interest to a creditor against a debtor’s property. Once a creditor obtains a judgement lien, the property can be sold to fulfill debt obligations.

An important question that comes up quite often when filing a bankruptcy is: how does a bankruptcy affect a debt that is now a judgment lien? In this article, you will learn what happens to a judgement lien after filing for a bankruptcy, and also whether you can avoid it.

Here are some important facts that you should know regarding bankruptcy and judgement Liens.

1. Judgement Lien is Not Discharged After a Bankruptcy

Judgement liens generally pass unaffected after a bankruptcy discharge. The lien will not be released until the debt has been repaid by the debtor.

A bankruptcy discharge only gets rid of a debtor’s personal liability. A lien on a property that is liable for fulfilling debt obligations will remain.

2. Debtor Must Make a Request to Avoid a Lien

While a judgement lien is not discharged, a debtor can file for a formal motion in the bankruptcy court to eliminate the judgement lien. The motion should specifically mention the statutory elements as per the Bankruptcy Code that gives the right to the debtor to avoid the lien.

A bankruptcy judge may grant the request to avoid judgement lien in case the following two conditions are met.

  • The judgement lien was ordered on debt that was presented before you had filed for bankruptcy
  • The property does not have a significant equity to pay the judgement lien

Remember that the right to avoid judgement lien is available for both Chapter 7 and Chapter 13 bankruptcies. If you have filed Chapter 7 Bankruptcy, you should check the “Property is claimed as exempt” on the Statement of Intention to claim the exemption.

Sometimes a judgement lien is overlooked when filing a bankruptcy, and it pops up only when you are about to refinance or sell a house. In such as a case, you need to reopen a bankruptcy case to gain exemption.

An order to void a judgement lien may take about 45 to 60 days after filing a motion. So, you need to plan appropriately. In case you can’t wait long to refinance or sell your house, you should consider requesting an escrow to hold the money until a court order is made in this regard.

3. Statutory Judgement Liens Cannot be Eliminated

Statutory judgement liens cannot be eliminated in Chapter 7 bankruptcy. For instance, you cannot claim exemption from tax liens when filing the bankruptcy.

In a Chapter 13 bankruptcy, you can avoid statutory tax liens if the lien is greater than the value of the underlying asset.

Summing it All Up

Judgement liens are not eliminated after filing for bankruptcy. The liens survive the discharge during a bankruptcy. However, you have the right to request for the lien to be voided.

You can request a court to void a judgement lien on a property that has little or negative equity. A professional bankruptcy lawyer will help you make a successful request in court. The legal professional can advise you whether you can eliminate the judgement lien by filing a motion.

Getting the help of a professional bankruptcy attorney will be worth it as it will help you in keep possession of your property when you file a bankruptcy.


Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

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