Judgment liens are legal claims on property that are put in place when someone wins a lawsuit against a defendant and follows certain steps. In California, judgment liens may be attached to real estate or personal property, such as jewelry or art. A judgment lien is attached to real property when the party that won the lawsuit records the judgment in the county where the defendant owns property. A judgment lien remains against any property to which it is attached, even after a bankruptcy discharge, unless you specifically avoid the judgment lien. Los Angeles bankruptcy attorney Devin Sawdayi has spent many years advising individuals on their rights and options when they are seeking a fresh financial start.Avoiding Judgment Liens as a Debtor
Judgment liens in California stay attached to your property for 10 years, even if the property is transferred to someone else. While a bankruptcy discharge can get rid of your personal liability for a debt, it does not get rid of a lien unless you purposefully "avoid" or remove the lien.
Certain requirements must be met to avoid a judgment lien. A judgment lien can be removed if the debt existed at the time you filed for bankruptcy, you are entitled to claim an exemption in some of your property's equity, the lien impairs exempted equity to which you would be entitled if the lien did not exist, and the lien resulted from a money judgment awarded by the court. If these elements are met, you can remove the judgment lien from exempt property, even real estate. The lien may not have arisen consensually in the course of a creditor extending you credit to buy something. A lien is considered to "impair" exempted equity if you are not able to take the full exemption because the lien has been placed on a particular piece of property.
In most cases, it is more straightforward to avoid a lien on property if the property is completely exempt. Otherwise, you may have to pay the amount remaining on the lien, and this can affect your ability to enjoy the "fresh start" available under bankruptcy laws. Your attorney will look at the value of the asset that would be exempted, the amount of senior liens, when the lien attached, and the amount of exemptions available to you in California. It is important to let your attorney know about the judgment lien before you file so that the attorney can approach this issue strategically. In most cases, you may ask the court for lien avoidance by filing a motion during your bankruptcy case, although it may be possible to reopen your case and get the lien avoided later.Explore Your Bankruptcy Options with a Los Angeles Attorney
Bankruptcy is a complex procedure. While exemptions do allow you to keep some of your property, a judgment lien that is not avoided can leave you unable to protect your assets. It is best to retain an experienced Los Angeles bankruptcy lawyer when you are filing for Chapter 7 or another form of bankruptcy so that you can protect your property to the extent possible. Attorney Devin Sawdayi can help you try to avoid a judgment lien when you file for bankruptcy. Contact us at 310-475-9399 or via our online form to set up a free appointment.