Many people who file bankruptcy do not know that the judgment has been recorded, and don’t inform their attorney of that fact. Most of the time, the debt underlying the judgment is listed in the bankruptcy schedules as an unsecured debt, and that debt is ultimately discharged. If the debt is not listed in the schedules, it is in full force and effect. 

A clear distinction needs to be made between the debt and the lien.

When you receive a bankruptcy discharge, it wipes out your personal liability for all discharged debts. This means that you are no longer obligated to pay those debts and creditors can’t sue you personally to collect them. However, simply filing for bankruptcy does not automatically remove any liens that were placed on your property prior to filing your case.

The lien of the abstract of judgment, however, was established on the property that the debtor owned at the moment the abstract recorded. 

If a judgment lien has been placed on your property, you must file a motion with the court in order to remove it.

Not all judgment liens can be removed through bankruptcy. Whether a judgment lien can be removed depends on the value of the property, the amount of the lien and other encumbrances on the property, and your state's exemption laws.

Because the rules and procedures regarding lien removal can be complex, if you have liens on your property, consider talking to a knowledgeable bankruptcy attorney in your area prior to filing your case.


Farima Tabrizi, FT Realty; Broker, GRI

DRE Broker # 01341835