As a Colorado Springs Bankruptcy Attorney, it’s not unusual for me to meet with people who have had judgments entered against them. Often these judgments have become liens on their real estate here in Colorado Springs.
The effect of the lien is to give the judgment creditor a secured claim – secured by the debtor’s real estate, including his home. The creditor usually won’t go to the trouble of filing a foreclosure in order to collect its judgment, even though it could. Usually they just hope that the judgment debtor will decide to sell the house in the future at which time they’ll get paid the amount of their judgment, plus interest.
How does this come to be?
Well, after the judgment is entered, usually by default, the lawyer for the creditor will request a Memorandum of Judgment from the Clerk of the Court. He or she will then arrange to have the Memorandum recorded in the El Paso County Clerk and Recorder’s Office. Then, by operation of law, Colorado Revised Statutes 13-56-101, et seq., the judgment becomes a lien on any property owned by the judgment debtor within the county where the memorandum was recorded.
In order for my clients to receive a true “fresh start”, it’s necessary to not only discharge any dischargeable debts, but also to remove, or “avoid” any judgment liens that may have been filed.
The Bankruptcy Code, at section 522(f), permits the Court to avoid any judgment lien as long as it impairs any of the debtor’s exemptions. In the usual case, we are talking about the homestead exemption.
In order to receive this relief, we’ll need to file a Motion to Avoid Judicial Lien and give the judgment creditor notice of such motion. Typically the judgment creditor won’t respond and the Court will ultimately enter an Order avoiding the lien. If the creditor does respond, we may have to take the Motion to hearing, but that’s not how it usually plays out in the vast majority of cases.
If you live in Colorado Springs and have a judgment against you, don’t worry. It can probably be avoided under section 522(f) of the Bankruptcy Code. You should contact a competent Colorado Springs Bankruptcy Attorney to find out your options.
Other, non-Colorado Springs Bankruptcy Attorneys have also written about bankruptcy “J” words:
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