Most judgments on consumer debt are dischargeable in bankruptcy, and the discharge kills the collection power behind them. Credit cards, medical bills, personal loans, car deficiencies, old gym contracts. All ordinary unsecured debt, judgment or not.
But a judgment is not just a debt. It is a debt with tools attached, and one of those tools is a lien that can attach to your house. Discharging the debt does not automatically remove the lien, which is the part that surprises people years later at a refinance.
What a judgment gives a creditor
Before judgment, a collector can call you. After judgment, they can reach your money.
- Wage garnishment, generally capped at 25 percent of disposable earnings under federal law, with California's formula often producing a smaller number.
- Bank levies, which freeze whatever is in the account when served.
- An abstract of judgment recorded with the county, creating a lien on real property you own in that county.
- A judgment debtor examination, which is a court appearance where you answer questions under oath about your assets.
- Post-judgment interest at 10 percent per year in California, which is why a $6,000 judgment from 2016 is not $6,000 anymore.
That ten percent compounds the sense of futility. People make payments for years and watch the balance move barely at all.
Ten years, then ten more
California money judgments are enforceable for ten years, and a creditor can renew for successive ten-year periods by filing before expiration. Renewal is a form and a fee. Nobody is going to forget.
So waiting it out is not a plan. Judgment buyers exist as an industry precisely because old judgments keep earning.
Liens do not vanish with the debt
A discharge wipes out your personal liability. A recorded judgment lien can stay attached to real property unless it is removed. In bankruptcy there is a motion to avoid a judicial lien that impairs your homestead exemption, and California's homestead exemption is large enough that many liens can be stripped off entirely. It requires a filed motion. It does not happen on its own, and it will not be done for you if nobody asks.
What a discharge does not reach
Some judgments survive, and the reason has nothing to do with the amount.
- Judgments for child support or spousal support arrears.
- Most tax judgments, depending on the age and type of tax.
- Judgments based on fraud, false pretenses, or false financial statements, if a creditor timely files an adversary proceeding.
- Judgments for willful and malicious injury, and for death or injury caused by driving while intoxicated.
- Most student loan judgments, absent a hardship showing.
A default judgment on a credit card that a collector labeled fraud in the complaint is not automatically nondischargeable. The creditor has to actually litigate that in bankruptcy court within a deadline, and on ordinary consumer accounts they almost never do.
“I get calls from people who assume a judgment is permanent because a court entered it. It felt final and it was humiliating and they stopped reading the mail. That is understandable and it is also how a $4,000 medical bill turns into a $9,000 lien on a house they bought later. The judgment being entered is not the end of the story.”
Naomi Reyes-AshfordChapter 7 or Chapter 13
For most people with judgments and no real estate, Chapter 7 is the direct answer. The debt discharges, the garnishment stops on the day of filing, and roughly four months later the case is over.
Chapter 13 earns its keep when there is a home with equity, when nondischargeable debt like tax or support arrears needs a payment structure, or when income is too high for the means test. Judgment liens can be addressed in either chapter, but the motion has to be brought.
Questions we get asked
Does a discharged judgment come off my credit report?
Civil judgments have not appeared on the major consumer credit reports since 2017, following the National Consumer Assistance Plan changes. The public court record still exists, and the discharged debt should be reported as discharged in bankruptcy with a zero balance.
They already garnished me. Do I get that money back?
Sometimes. Garnished amounts taken within 90 days before filing that exceed the statutory threshold for consumer debts may be recoverable as a preference. It takes a demand or a motion, and small amounts often are not worth the cost of pursuing.
How do I remove a judgment lien on my house?
Through a motion to avoid a judicial lien filed in your bankruptcy case, on the ground that the lien impairs your homestead exemption. It is a straightforward motion in the right facts, but it must be filed, and courts expect a valuation.
Can I be jailed for not paying a judgment?
Not for owing money. You can be sanctioned or held in contempt for ignoring a court order, such as failing to appear at a judgment debtor examination after being properly served. Do not ignore that particular piece of paper.
Pull the case number off the judgment, look up whether an abstract was recorded with the county recorder where you own property, and bring both to a consultation at (310) 555-0184. The recording status decides whether we are filing one motion or none.