How to Improve Your Credit Score after Bankruptcy-Part 6

Dealing with Judgments That Don’t Seem To Go Away After Bankruptcy

Pre-filing judgments

1. Judgments that have been obtained before you file bankruptcy often cause problems. Whereas the underlying unsecured debt will be discharged in your bankruptcy the judgment itself may still be a matter of public record. In Texas the judgment will not attach to your homestead due the Texas exemptions laws, but they will attach to non-exempt real estate and become a secured claim and a surviving lien against that real estate.
2. Bankruptcy attorney’s often ignore this problem and debtors only learn about it after the bankruptcy is over when they try to refinance or sell the non-exempt property. You would think non-exempt real estate would be seized by the bankruptcy trustee, but sometimes there is little or no equity so the trustee abandons the property.
3. How judgments affect homesteaded property. Even though the judgment lien does not attach to the homestead, title companies will still require a partial release of the judgment to remove any possibility that the judgment may have attached. They are only in the insurance business, so why take any risk, right?
4. Creditors can be forced to sign these partial releases but somebody has to prepare a form of release, present it to them and demand they sign it. It they refuse you will have to hire an attorney to file suit to compel them to do it!
5. Getting judgments off your credit report. Sorry, it’s a matter of public record and wrong or right you are stuck with it. I have noticed some cases where the credit report will show the judgment as “paid” and give the date of the bankruptcy discharge. If this happens to you, be happy because I am not sure they really have to do that since it is not always clear from the information in the credit report that the lien might not have attached to something.
6. Get a release. The best practice is to get a release of the judgment if you can and be sure to file the deed in the judgment records at the County Clerk's office. That recording of the release should eventually show up on your credit report and put the judgment behind you.

Post-filing Judgments

• Judgments that are entered after a bankruptcy is filed for debts owed at the time of filing are a violation of the automatic stay or discharge injunction. Your attorney shouldn’t have any trouble getting those quickly released. If a creditor refuses to release them and cease and desist from enforcing them you have an attorney file a contempt motion or adversary proceeding in the bankruptcy court to put a stop to it. .

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