Are Judgments Bankruptable? | What Gets Wiped, What Sticks

Many money judgments can be wiped as personal debt in bankruptcy, but a recorded judgment lien on property may need separate court relief.

A judgment can feel final. The court set the amount, the creditor has a piece of paper with real teeth, and collection can ramp up fast. Bankruptcy can still reset the board, yet the result depends on two details: what the judgment is based on and whether the creditor recorded a lien against property you own.

This article walks through how bankruptcy treats judgments, what happens to wage garnishment and bank levies, and why liens are the part that trips people up.

How A Judgment Changes A Debt

A judgment is a court order that says you owe a creditor a certain amount. It often adds court costs and post-judgment interest. It can also open up collection tools that usually require a judge’s order.

Bankruptcy does not treat a debt as “special” just because it became a judgment. The court looks at the underlying debt type. If the underlying debt could be discharged, turning it into a judgment usually does not block discharge.

Still, judgments tend to bring two extra problems:

• Stronger collection pressure. Wage garnishment and bank levies are common next steps. The Consumer Financial Protection Bureau notes that most creditors must get a court judgment before they can garnish wages or certain benefits. CFPB: garnishment requires a judgment.
• Liens. In many states, recording the judgment can create a lien against real estate. That lien can block a sale or refinance even if the debt is later discharged.

What Bankruptcy Stops As Soon As You File

Filing triggers the automatic stay. The stay blocks many collection acts, including enforcement of a judgment entered before the case was filed. The rule is written into the Bankruptcy Code. 11 U.S.C. § 362 (automatic stay).

In real life, the stay often stops:

• Wage garnishments in progress
• Collection calls and letters
• New collection lawsuits on the same debt
• Most efforts to enforce a prior money judgment

The stay is a pause, not the finish line. The long-term result comes from discharge rules and lien rules.

When A Judgment Debt Gets Discharged

A bankruptcy discharge releases you from personal liability for certain debts. The U.S. Courts describes discharge as an order that bars creditors from collecting discharged debts. U.S. Courts: discharge basics.

If your judgment grew out of an ordinary consumer debt, it is often dischargeable:

• Credit card balances
• Medical bills
• Personal loans
• Old utility or phone bills

After discharge, the creditor can’t keep trying to collect from you personally on that debt. No new garnishment. No new levy. No fresh lawsuit on the same claim.

Judgments That Commonly Survive

Some judgment debts survive because the underlying debt falls within an exception to discharge. The main list is in federal law. 11 U.S.C. § 523 (exceptions to discharge).

In judgment cases, these exceptions show up often:

• Child or spousal maintenance and many divorce-related debts.
• Certain tax debts. Timing and filing history matter.
• Fraud-based debts. Debts tied to false statements or deception can survive.
• Willful injury. Judgments tied to deliberate harm to a person or property can survive.
• Government fines and penalties.
• Most student loan debt. Discharge usually requires a separate court process with a strict standard.

Even when a debt fits one of these categories, procedure can matter. Some categories are treated as non-dischargeable without extra litigation, while others are often fought through a complaint in bankruptcy court.

Are Judgments Bankruptable? Two Questions Decide Most Cases

If you want a fast read on your own judgment, start here:

• What is the judgment based on? A routine unpaid bill is treated differently than a judgment tied to fraud or deliberate harm.
• Is there a lien on property? Discharge may wipe personal liability, yet a recorded lien can still sit on a home’s title.

Judgment Liens: Personal Debt Versus Property Rights

A discharge is about personal liability. A lien is about property. If the creditor recorded a judgment lien against real estate, the lien can keep following the property even after your personal liability is wiped.

Bankruptcy law gives debtors a tool to remove certain judicial liens when the lien impairs an exemption. That authority appears in 11 U.S.C. § 522(f). 11 U.S.C. § 522 (exemptions and lien avoidance).

In many courts, lien avoidance is not automatic. You file a motion, you serve the creditor, and you ask the judge for an order that avoids the lien. A bankruptcy court guide from the Central District of California explains this motion process for judgment liens on real property. U.S. Bankruptcy Court guide: avoiding a judgment lien.

When lien avoidance works, it can clear title problems that would otherwise hang around after discharge. When it does not work, the lien may still need to be paid at sale or handled through a negotiated release.

Chapter 7 Versus Chapter 13 For Judgment Debts

Chapter 7: Discharge first, lien work if needed

Chapter 7 is often the fastest path to discharge. If the judgment is unsecured and dischargeable, Chapter 7 can end personal collection on it quickly. If there is a recorded lien, Chapter 7 may still help, but you may need a lien avoidance motion to clear the lien from exempt property.

Chapter 13: Plan payments with breathing room

Chapter 13 uses a 3–5 year plan. It is often chosen by people who have steady income, need time, or want to keep assets while catching up. Judgment creditors are usually treated as unsecured unless a lien is properly perfected. Filing can stop garnishment, and the plan can deal with the claim under bankruptcy rules.

Table: Common Judgment Types And Typical Treatment

Judgment Source	Personal Liability After Discharge	What To Watch For
Credit card lawsuit	Often discharged	Recorded lien may still attach to real estate
Medical bill judgment	Often discharged	Check for lien recording and post-judgment interest
Personal loan judgment	Often discharged	Garnishment can restart if the case is dismissed
Auto deficiency judgment	Often discharged	Repossession timing can affect the creditor’s claim
Landlord money judgment	Often discharged	Separate housing court issues depend on local law
Judgment tied to fraud findings	Often not discharged	Creditor may file a complaint to keep it non-dischargeable
Judgment for deliberate injury	Often not discharged	Look for “willful and malicious injury” language in findings
Child or spousal maintenance arrears	Usually not discharged	Arrears can stay collectible after the case

How To Check For A Judgment Lien

A judgment does not always mean there is a lien. A lien usually requires an extra step, like recording an abstract of judgment or a similar document in county land records.

Clues that a lien exists:

• A notice that mentions recording, abstract, or county real property records
• A title search that flags the judgment during a refinance or sale
• Court filings that use words like “lien” or “real property”

If you rent and have no real estate, the lien part is often smaller. Collection pressure is more likely to come from garnishment or a bank levy.

What Happens To Garnishment And Bank Levies

Garnishment usually rides on a judgment. The CFPB explains that most creditors must win a case before a court can order garnishment. CFPB: court order and garnishment.

Once you file, the automatic stay often stops an active wage garnishment. A bank levy may stop too if the funds have not already been turned over. Timing can get technical, so keep copies of levy notices and account statements.

After discharge, collection on a discharged judgment is barred. If the debt survives as non-dischargeable, collection can restart after the stay ends unless another court order blocks it.

Table: What Filing Often Stops Versus What May Continue

Collection Tool	Often Stopped At Filing	May Continue In Some Cases
Wage garnishment	Yes	Some family court debts and certain taxes
Bank levy	Yes, if not completed	Funds already turned over may not return automatically
Enforcing a prior money judgment	Yes	Creditor may seek stay relief in narrow settings
Existing judgment lien on real estate	No	May be avoided through a court order when criteria are met
Post-discharge collection	No, on discharged debts	Yes, on debts excluded from discharge

Prep Steps That Make Filing Smoother

A little prep can save stress once the case starts. These are the items that tend to matter most in judgment cases.

Pull the judgment packet

Get the judgment, the complaint, and any findings pages. The complaint is often the best clue about whether the creditor will claim fraud or deliberate injury.

Track every enforcement action

Keep pay stubs if wages are being garnished. Save levy notices. Download recent bank statements. If you file, you will want clear dates and amounts.

List every creditor and address

Judgment creditors are easy to list. The trap is missing a creditor you stopped hearing from. Accurate schedules and addresses reduce post-discharge disputes.

What To Expect After Discharge

For discharged judgment debts, the creditor must stop collecting. That is the core effect of discharge, as the U.S. Courts discharge overview explains. U.S. Courts: discharge overview.

Still, public records do not vanish. The judgment may still show up in court records. A lien may still appear in land records until an avoidance order is entered or the lien is released. That is why many people treat the lien step as central when real estate is involved.

Next Steps If You Have A Judgment

If you are weighing bankruptcy because of a judgment, start by sorting the judgment into a bucket: dischargeable unsecured debt, non-dischargeable debt, or dischargeable debt with a lien attached. That one sorting step usually tells you what needs attention first—stopping garnishment, clearing a lien, or preparing for a dischargeability fight.

Bankruptcy law is federal, yet exemptions and collection tools vary by state. A bankruptcy lawyer can match your facts to the right chapter, the right exemptions, and the right lien strategy.