Are Lawsuit Judgments Discharged Through Bankruptcy?

A trip to the local county courthouse will usually have a great many things to look at. Among them are wood paneling, State seal, and a long line of citizens who have received notice of a law suit. Our firm has received countless inquiries as to whether judgments awarded against them are eligible to be eliminated through a bankruptcy filing. The short answer to this is, in most cases, yes.

In a previousblog we wrote about debts and other obligations such as student loans, child/ spousal support, and tax obligations, which are not able to be discharged through a chapter 7 or chapter 13 bankruptcy filing. With lawsuit judgments, most are able to be eliminated through the bankruptcy process unless they fall into one of the following categories:

- injury caused by a willful or malicious act, or
- an act perpetrated by fraud

Our law firm has dealt with law suit judgments originating from credit card default as well as other civil issues. Once notice of bankruptcy has been provided to the creditors they have the option of having the bankruptcy court determine if the debt is non-dischargeable by classifying it in one of the two above-mentioned categories. In the context of an injury, it is very difficult for the plaintiff/ creditor to prove that their injury was caused by a willful or malicious act if the defendant isn't also being criminally prosecuted. With a credit or contractual obligation which has turned into a civil judgment, the creditor will seek to have the bankruptcy court declare that the credit was obtained by fraud, false representation, or false pretenses. An example of this occurs when there have been significant misrepresentations as to the purpose or use of the debt or financial condition of the borrower. The difficulty in proving either of these standards generally results in the majority of law suit judgments being discharged through chapter 7 or chapter 13 bankruptcy.

If you have recently had a judgment entered against you or are in danger of receiving a judgment call Douglass County Bankruptcy Lawyers us today for a free consultation. (770) 485-66220