Judgments and Bankruptcy in New York

Whether a judgment is dischargeable depends on the underlying debt, not the judgment itself:

• Dischargeable: Judgments from credit card lawsuits, medical debt, personal loans, breach of contract, and most other civil claims
• NOT dischargeable: Judgments from fraud (section 523(a)(2)), DUI injury (section 523(a)(6)), willful and malicious injury, student loans, and domestic support obligations

After discharge, the creditor cannot collect on the judgment debt. The discharge injunction permanently bars collection.

In New York, when a creditor dockets a money judgment, it automatically creates a lien on all real property you own in that county. This lien lasts 10 years and can be renewed.

The discharge eliminates your personal liability, but the lien itself can survive unless you take action:

Lien Avoidance (Section 522(f))

You can file a motion to avoid a judicial lien if it impairs your exemptions. In New York, this means the lien can be stripped if:

• The lien is on your homestead, AND
• Your equity minus the lien is less than your homestead exemption ($179,975--$215,550 by county)

This motion must be filed during the bankruptcy case. If you do not file it, the lien survives the discharge.

New York judgment creditors can:

• Garnish wages - the lesser of 10% of gross or 25% of disposable earnings
• Freeze bank accounts with a restraining notice (accounts under $3,600 are exempt)
• Seize property through the county sheriff

The automatic stay stops all of these immediately upon filing. Your employer must stop withholding once notified of the bankruptcy.