A civil judgment is a ruling made by a court during the courts of a lawsuit. Civil Judgment can often arise due to unpaid collections or other types of debt. When you file Chapter 7 or Chapter 13 bankruptcy, unsecured debt such as medical debt, unpaid credit card balances, and other types of personal loans will be discharged. A bankruptcy discharge refers to the elimination of your legal obligation to pay a debt and is the primary reason individuals file for bankruptcy protection.
Effects of Civil Judgments
Once a creditor has obtained a judgment against you, they have several options for obtaining the money you owe them which includes reporting the debt to the credit agencies, garnishing your wages or bank account, or placing a lien on property you own. As the debtor, you also have options in settling the judgment, which include working out a payment plan with the creditor or filing for bankruptcy.
Civil Judgments in Bankruptcy
In a bankruptcy case, money owed by you as a result of civil judgment is classified as an unsecured debt and is dischargeable with some exceptions. Judgments that arise out of domestic support obligations, criminal penalties, student loan debt, death or injury due to drunk driving, or willful and malicious injury will not be discharged by filing bankruptcy. Even if a judgment has already been entered against you it’s not too late to eliminate the financial obligation using Chapter 7 or Chapter 13 bankruptcy. Additionally, if your judgment has resulted in wage or bank account garnishment, the automatic stay granted by bankruptcy will immediately stop these negative effects of a civil judgment.
It is strongly recommended that you file for bankruptcy before a judgment is entered against you as bankruptcy as you won’t receive an automatic discharge of a lien. Additionally, because of the long-term financial and personal implications of filing bankruptcy, you should certainly obtain a Dallas bankruptcy attorney to guide you through the process.