Dischargeable Civil Judgments Under Chapter 7

• A discharge in bankruptcy relieves you of liability from a civil judgment and other debts as well. Most civil judgments are dischargeable in a Chapter 7 bankruptcy and include judgments for negligent personal injuries, breach of contract, default on a lease, as well as most consumer credit installment loans. Even small claims court judgments are dischargeable in a Chapter 7 bankruptcy. Liens in existence at the time of the bankruptcy filing are not dischargeable in bankruptcy.
  
  

Automatic Stay

• A Chapter 7 filing provides you with a stay, which is the automatic protection from judgment creditors. The automatic stay prevents creditors from attempting to collect money from you, such as filing wage garnishments, repeatedly calling you, or repossessing vehicles or other property. If they do make any collection attempts, you can report their actions to the bankruptcy judge who handled your case. A judge, on finding a violation of the stay, typically orders those creditors to pay damages.
  
  

Listing Civil Judgments in the Petition

• In your bankruptcy petition you list outstanding civil judgments and other debts in the schedule of unsecured debts. Any civil judgments you do not list cannot be discharged. It's critical that you enter detailed information, such as the judgment case number, court location, the last known address for the judgment creditor, and other parties in the case.
  
  

Civil Judgments Not Dischargeable

• Bankruptcy laws exclude certain kinds of civil judgments from being discharged. Those include judgments arising from defaulted student loans (unless repayment causes unreasonable hardship); unpaid child support; delinquent alimony; personal injuries caused by intentional acts; fines and restitutions levied by government agencies; fraud or tax fraud; court-ordered compensation for drunk driving injuries; and debts to retirement funds. These civil judgments are not covered by the automatic stay provisions outlined in Step 2.
  
  

Exemptions from Dischargeability

• After receiving a creditor's notice regarding a civil judgment in a petition, a creditor may petition the bankruptcy court for an exemption from dischargeability. Unless the creditor can prove that the civil judgment fits within the definition of a non-dischargeable debt, or that the judgment was incorrectly documented within the petition, the judge will deny the creditor's petition. If the judge grants the creditor's petition, you can appeal that ruling to the bankruptcy appeals court.