Posted on: 21st Jan, 2010 02:05 pm
If the collection agency decides to sue me for the 2nd mortgage balance and they, in fact, win a judgment, can I then file bankruptcy, get the judgment vacated in the bankruptcy and then have the original creditor's lien released?
hi inquisitive,
if your creditor gets a judgment against you and then you file bankruptcy, the judgment cannot be enforced. filing bankruptcy will stop your creditor from enforcing the judgment. thus, if they are garnishing your wages and you file bankruptcy, your lender cannot continue with the garnishment. bankruptcy chapter 7 may vacate the judgment against you, depending on your particular situation. however, if there is a judgment lien on your property, the bankruptcy cannot remove it. it can be removed if the lien interferes with the homestead exemption on your property.
if your creditor gets a judgment against you and then you file bankruptcy, the judgment cannot be enforced. filing bankruptcy will stop your creditor from enforcing the judgment. thus, if they are garnishing your wages and you file bankruptcy, your lender cannot continue with the garnishment. bankruptcy chapter 7 may vacate the judgment against you, depending on your particular situation. however, if there is a judgment lien on your property, the bankruptcy cannot remove it. it can be removed if the lien interferes with the homestead exemption on your property.
Thank you for your response. I live in Texas so there will be no garnishment nor any type of judgment lien on my homestead. So, it sounds like that the lien can/will be released based on my situation. Also, for the record, the lien is actually not enforceable because the lender failed to include my husband on the collateral documents and the also failed to provide him with the right of rescission. Because I brought this to there attention and by the Grace of God, I believe this is the only reason that they have not attempted to foreclose. They attempted to settle but I informed them that the Texas Constitution requires that they forfeit all principle and interest paid.
Hi Inquisitive,
If you file bankruptcy chapter 7, it is likely that the judgment will be vacated. However, as I stated earlier, a lot depends on your particular situation. You need to consult with a bankruptcy attorney as he would be the best person to guide you in this situation.
If you file bankruptcy chapter 7, it is likely that the judgment will be vacated. However, as I stated earlier, a lot depends on your particular situation. You need to consult with a bankruptcy attorney as he would be the best person to guide you in this situation.