How Bankruptcy Impacts Existing Judgments

People in Florida who have existing judgments or liens often hesitate to file for bankruptcy. After all, many of these people believe that these types of legal instruments are final and that it is too late to pursue a good credit report. This is a misconception, however. The following reviews some important information to consider about the impact that filing for bankruptcy can have on existing judgments.
Impact of Bankruptcy on Pending Judgments
After filing for bankruptcy, an automatic stay is created. This means that anyone who is seeking a judgment against you must immediately stop. During this time, creditors will not be able to directly contact you about any debts that you owe. Because collectors are unable to proceed, they sometimes grow frustrated and merely choose to give up on a debt. Other times, the bankruptcy process helps a debtor take increased control over the situation. 
How Bankruptcy Impacts Existing Judgments
Filing for bankruptcy does more than prevent any creditors from pursuing collection efforts. Bankruptcy will also erase any judgment that has already been made. Consequently, any party who has received a judgment against you will be prohibited from enforcing it in the future. Bankruptcy will also prevent adverse creditor action like wage garnishment.
Judgment Removals Must be Pursued
Liens against property can create various hardships. Not only can these liens prevent a person from selling a property, but mortgage companies also resist writing loans on properties with existing liens. Following a successful bankruptcy, a judgment removal must still be obtained to eliminate any liens on a property. These separate legal actions are critical to making sure that a property has a clean title. 
Judgments Not Impacted by Bankruptcy
Unfortunately, there are some types of judgments that are not impacted by bankruptcy. If a debt survives bankruptcy, the judgment will not be erased following discharge. These debts can include various things including student loans and child support. The best way to determine what judgments will be impacted by bankruptcy is to specifically address these debts with an attorney before filing for bankruptcy.
Do Not Hesitate to Act
Even if there is a judgment against you, this does not necessarily mean that it is too late to file for bankruptcy. It is often a good idea to file before a judgment, however. This way you can avoid being subject to the harassing nature of creditors. 
You will also be able to avoid the process of clearing a property’s title. One of the best ways to take control of your financial future is to act now, since by waiting, you can increase the chance that you end up facing larger fines that require more time to remedy.
Contact an Experienced Florida Bankruptcy Lawyer
If you are currently being pestered by a creditor over a debt you cannot pay and there is a legal judgment against you, remember that it is not too late to respond. Instead, a skilled bankruptcy attorney can help you take control of this situation. Contact Adam Law Group today to schedule a free case evaluation.