Judgments and Bankruptcy in Newark

If a creditor has a judgment against you, they can garnish wages, levy accounts, and lien property. Bankruptcy can stop enforcement and may eliminate the debt.

What Is a Judgment?

A judgment is a court order establishing that you owe a specific amount. With a judgment, creditors can:

Garnish wages: In New Jersey, up to 10% of gross income (one of the most protective limits in the country)
Levy bank accounts
Place judgment liens on real property
Seize non-exempt personal property

How Bankruptcy Helps

Immediate Protection

Automatic stay instantly stops all enforcement
Wage garnishment stops
Bank levies halted
No new liens can be placed
Pending lawsuits frozen

Long-Term Relief

Underlying debt may be discharged
Judgment liens on exempt property can be avoided under 11 U.S.C. section 522(f)
Chapter 13 can include judgment debts in the plan
After discharge, no personal liability enforcement

Avoiding Judgment Liens

Under section 522(f), judicial liens impairing an exemption can be removed:

Homestead: If a lien impairs your $27,900 (federal) homestead exemption, you can avoid it
Personal property: Liens on exempt personal property can also be avoided
Only judicial liens: Does not work for mortgages, car loans, or tax liens

Non-Dischargeable Judgments

Judgments from these debts survive bankruptcy:

Fraud or false pretenses (section 523(a)(2))
Willful and malicious injury (section 523(a)(6))
Domestic support obligations (section 523(a)(5))
Student loans (section 523(a)(8))
DUI/DWI debts (section 523(a)(9))
Certain tax debts (section 523(a)(1))

Frequently Asked Questions

Can bankruptcy eliminate a judgment?

Yes, if the underlying debt is dischargeable. Most judgments from credit cards, medical bills, and personal loans can be discharged. Fraud, support, and DUI judgments cannot.

Will bankruptcy stop wage garnishment?

Yes. The automatic stay immediately stops garnishment the moment you file.

Can I remove a judgment lien from my home?

Possibly. Under section 522(f), judicial liens impairing your $27,900 (federal) homestead exemption can be avoided.

What about money already garnished?

Generally not recoverable. Some garnishment within 90 days of filing may be recoverable as a preferential transfer.

Does a judgment prevent me from filing?

No. A judgment creditor is treated the same as any other unsecured creditor in bankruptcy.