Be aware that the rules covering judgments and bankruptcy are somewhat different in nearly every state, but there are some aspects that are generally similar. Because in the fairly recent past people declared bankruptcy just to not pay what they owed, many states altered the rules to put more accountability on the debtor. One of these points of accountability is one similar factor across most states based on the type of judgment made, and the reason for the judgment.
Federal law is the source for what judgments can or cannot be erased. An online source states that section 523(a) of the Bankruptcy code lists the judgments bankruptcy cannot erase. A source for this information is this online site: [http://www.law.cornell.edu/uscode/text/11/523]. For a tax obligation, local, state, or federal, for child support, for a student loan, for a secured (by property or asset) loan default, for criminal fines, for DUI judgments, in most cases and states, bankruptcy will not erase these types of judgments. For a credit card default judgment, erasure is possible. In every case, it is up to that state’s bankruptcy court to decide. A creditor can request that normally erasable judgment be retained through the bankruptcy. Section 523 addresses the expectations and limitations for this situation.
As always, the best person to argue this case in court is your attorney. Consult with one.
Next point to make is to be completely honest in all information you give to your lawyer, to the court judge, to the court-appointed trustee (for a Chapter 7 bankruptcy), and to anyone else collecting information about your assets and financial status. You are required by law to be totally honest. Any discrepancies can be construed to be fraud, with all of the legal trappings that it could bring. You do not need that in this situation.
Based on state law and based on your personal and family situation, there will be some exemptions that your lawyer will likely identify. This is where judgments come into play and where their potential dismissals would be considered.
A few other sites raised another interesting situation. In the case of the non-erased judgments, these judgments can and often will survive the bankruptcy. Sometimes judgments that were erased still linger on credit reports. Here, again, consulting with a lawyer is best. Sometimes the judgment(s) and bankruptcy are in different states. A little spice added for the situation.
It needs saying that federal bankruptcy law does protect the debtor also from fraudulent and bullying tactics from a creditor. For instance, one site noted the situation where an erased judgment was not removed from the debtor’s credit references as required by law. When the debtor sought to obtain property, this mark hindered the transaction. When the debtor requested that the mark be removed, the creditor dragged its feet. The debtor sued, won the case, and won damages for the loss of the ability to conclude the property purchase. The law exists for the relief and protection of debtor and creditor alike.
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