A judgment and a lien are not the same thing. First, a judgment is a court order either ordering someone to take some kind of action or setting liability and an amount owed. Second, a lien is the production of a security interest against an asset or assets, giving the creditor rights against that asset (real estate, or a bank account, wages, etc.). The extent of a creditor’s right to pursue a given asset depends on the equity in the asset and if any senior creditors(like a mortgage lender) are present.

A judgment lien is not obtained instantaneously upon receiving a judgment. First, the creditor must obtain a judgment. Second, the lien must be perfected under applicable state law. For real estate, this normally requires obtaining a certified abstract of the judgment from the court that issued it, and then recording it with the county recorder’s office wherever the property is located that the creditor wants the lien to attach.

In both Oregon and Washington, a judgment lien can be completely eliminated in bankruptcy provided that some requiements are met . The bankruptcy code allows a lien to be removed to the extent that it impairs an exemption to which the debtor. This is obviously a mathematical calculation in which the variables are the value of the asset, the amount of the available exemptions and the amount of any senior liens. For example, in Oregon, if a debtor owns a vehicle worth $5000 and is entitled to a $3000 vehicle equity exemption, a judgment lien in the amount of $5000 would be removed up to $3000.

If you have a creditor who has obtained a judgment line against you, you will need to tell your bankruptcy attorney about it. In both Oregon and Washington, a judgment lien can often be extinguished well after the time your case is discharged, but there are limits and it normally requires additional legal fees. Better to get it right the first time.

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