What Happens in a Civil Judgment Before Bankruptcy?

By Elizabeth Rayne

A civil judgment often leads to financial distress, which may lead a person to file for bankruptcy. Bankruptcy may mean that you are no longer responsible for paying off certain debts, including some debts owed due to a successful lawsuit filed against you. However, bankruptcy is often a last resort, so people may first consider other options to pay off debts.

Civil Judgment

A civil judgment is official only if it was granted by a court as part of a lawsuit. The process begins with a person or company filing a complaint against you, perhaps as a result of payments owed on a credit card or allegations that you injured someone during a car accident. Both sides have the opportunity to present their story to the judge. If the plaintiff -- the person or company who filed the lawsuit -- is successful in the lawsuit, he may receive a judgment against you, meaning you owe him money.

Effect of Judgment

If you do not pay the plaintiff the amount owed as a result of the judgment, he has options to get his money. Depending on the laws of the state, he may report the judgment to credit agencies, enter a lien against your home or garnish your bank account or wages. Wage garnishment requires your employer to withhold a certain percentage of your wages to pay directly to the plaintiff instead of you. It generally is allowed only if you make more than a certain amount of money.

Get a free, confidential bankruptcy evaluation. Learn More

Options for Handling Judgments

Once a judgment has been entered against you, you may have several options for handling the judgment, including bankruptcy. The plaintiff may be willing to work out a payment plan with you to pay off the amount you owe over time or accept a smaller amount of money if your only alternative is bankruptcy. Filing for bankruptcy may stop garnishments and result in you no longer being responsible for paying the judgment, depending on the facts of the case.

Dischargeable Debts

Only certain types of debts can be discharged under bankruptcy, meaning that bankruptcy eliminates your obligation to pay those debts or judgments. If the judgment was for student loans or taxes you owed, bankruptcy will not likely discharge the debt. Further, if the judgment came from a lawsuit regarding a drunk driving incident or malicious and willful act, such as where you assaulted the plaintiff, the debt from the judgment will not be discharged by bankruptcy.

Get a free, confidential bankruptcy evaluation. Learn More
The Difference Between Voluntary & Involuntary Bankruptcy

References

Related articles

Can You File Bankruptcy if You Already Have Judgments Against You?

Filing for bankruptcy can protect you from creditor actions, such as wage garnishment -- and may free you from some debts. You can file for Chapter 7 bankruptcy, which eliminates certain debts, or for Chapter 13, debt repayment, if you already have judgments against you. Whether you can get rid of a judgment in bankruptcy depends on the debt type.

Filing a Complaint Against the Decedent in Probate Court

Technically, you cannot file a legal complaint or initiate a lawsuit against someone who has died. However, this doesn’t mean you have no recourse if he wronged you in some way or owes you money. You can file some lawsuits against his estate instead.

Filing Bankruptcy to Stop a California Civil Default Judgment

A default judgment is entered by a California judge when you fail to respond to a lawsuit in which you are named as the defendant within 30 days. Once an order of default is issued, the judge generally awards the creditor who filed the suit, called the plaintiff, some or all of the monetary damages sought in the lawsuit. Since the judgment award creates a debt that you owe the plaintiff, you may be able to have the debt discharged in bankruptcy depending on the type of bankruptcy you file and claims raised in the lawsuit against you.

Related articles

Can Creditors Attempt to Get Money After a Discharge?

When you file a petition for bankruptcy, you are asking a federal court for protection from creditors and time to work ...

Can You File Bankruptcy on Funeral Expenses?

The average cost of a funeral is more than $6,500, according to industry analysts. This figure includes only funeral ...

What Happens to Judgments in Bankruptcy?

If a creditor wins a money judgment against you, that judgment may or may not be subject to discharge in bankruptcy. ...

Can I Become Bankrupt Through a Civil Lawsuit?

Civil litigation can force you into bankruptcy, but planning ahead with appropriate business structures can blunt the ...

Browse by category
Ready to Begin? GET STARTED