Using Bankruptcy to Remove a Judgment Lien

Question: I lost my job a credit card company sued me. Now that have a judgment lien on my home. Can I get rid of this lien in bankruptcy.

Answer: A discharge in bankruptcy voids the underlying judgment, but the discharge does not automatically remove a judgment lien from your property. If you qualify, your might be able to file a motion to avoid or cancel the line under Section 522(f) of the Bankruptcy Code.

Under Section 522(f), you can remove most types of judgment liens if the lien impairs an exemption that you would be entitled to claim under the law. Although bankruptcy is a federal law, it is largely state law that determines what property you can an cannot keep when a debtor files for bankruptcy.

Under California law, a homeowner can protect anywhere from $50,000 to $150,000 of the equity in a home from judgment creditors or creditors in a bankruptcy. A California judgment creditor can create a lien against the debtor's home by recording a document called an Abstract of Judgment. If the judgment lien impairs the debtor's ability to claim the maximum homestead exemption, the debtor can obtain a court order removing the lien under Section 522(f).

If you have a judgment lien against your home and want to learn more about how to remove it in bankruptcy, please feel free to contact us.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.