Expert: Mark J. Markus- California Bankruptcy Attorney - 10/13/2006

Question
My wife had two judgements against her in June 2003.  A couple weeks later, we filed a chapter 13.  There are no leins on our house.  We were discharged last month.  In buying a new house now, the mortgage company says the two judgements need to be paid.  I am unsure why they were not included.  I am hesitant to contact them for fear they will proceed with collections.  Any recourse?

Answer
If the mortgage company (more likely the Title Insurance company) is insisting on paying the judgments, it is because those judgement creditors did, in fact, obtain liens against your property.  If the liens were obtained and perfected (usually by recordation) prior to your Ch. 13 case being filed, and you did not avoid those liens in your bankruptcy case, then you will have to pay them or reopen your bankruptcy case to have them avoided (assuming they are able to be avoided).   You need to consult with your bankruptcy attorney regarding your options, as they will depend in part on your State's laws.