Can Bankruptcy Eliminate Debt If Judgment Already Entered? In most circumstances the answer is yes. If a judgment is filed against you before you file bankruptcy and you do not own real estate, the debt is eliminated and the judgment will not attach to future acquired property. If you own real estate when the judgment is filed and then you file bankruptcy, the personal liability is eliminated when the debt is discharged. However, to remove the lien during the bankruptcy you can file a motion to void the judgment as long as any equity you have in your real estate is exempt. You are allowed to protect approximately $25,000 per owner in the equity whether you live in say, Cherry Hill New Jersey or in Northeast Philadelphia Pennsylvania. However, if you live in Pennsylvania and the house is owned by a husband and wife as tenants by the entireties generally all the equity is exempt if one spouse files and they do not have joint debts. If you did not realize the creditor had a judgment and the bankruptcy case is closed, if you are living in New Jersey and one year has passed from the time you received the discharge, you can file a motion in state court to void the judgment. However, if you live in Pennsylvania and your case is closed without removing the judgment, you would need to file a motion to reopen your bankruptcy case so the judgment could then be voided. It is best to determine if there are any judgments before you file so a plan of action can be developed for your bankruptcy.
