For bankruptcy lawyers, the word “judgment” raises red flags. This is especially true when the judgment comes from another State. He is a question I received from a non-Georgia resident that raises a lot of questions about judgments.
My question is this-my father has a judgment against him by Bank of New York due to an unpaid debt. The debt was discharged in bankruptcy however, the judgment is still on the public records in New York. My father is now trying to buy a home, however, the title company wants the judgment released from the public records or at least subordinate to them. How can I make the Bank of New York release their judgment from the public records?
Here is how I would analyze this situation: first, you say that “the debt was discharged in bankruptcy.” If the debt was discharged prior to a judgment being entered, the judgment is void and the creditor’s act of obtaining the judgment is a violation of the automatic stay. If this is the case I would contact the New York bank and demand that the judgment be vacated post haste. If this creditor was included in your father’s petition, I would ask for damages as well.
If the judgment was rendered prior to the bankruptcy, I would look to see if the debtor’s attorney filed a Motion to Avoid Lien. These motions are fairly common in the Northern District of Georgia, where I practice, but may not be as common in different filing districts. If a Motion to Avoid Judicial Lien was filed, the Order avoiding the lien should be filed in the appropriate New York public record, and a copy of the Order along with proof of county record filing sent to the creditor with a demand that the judgment be vacated.
If the judgment was rendered prior to the bankruptcy and no Motion to Avoid Lien was filed, I would take the position that any personal (in personam) liability for the debt has been extinguished. However the in rem part of the judgment (against property) may remain viable. Is this in rem judgment enforceable, and, if so, in what amount are questions of law for a New York attorney. Might the bankruptcy angle give you leverage for settlement? Perhaps.
Sometimes a strongly worded demand along with a reference to the bankruptcy and the unpleasant consequences of a discharge violation action may be enough to encourage the creditor and/or its lawyers to vacate the judgment. This is probably a situation where you should contact a consumer protection lawyer in New York. My friend and colleague, Jay Fleischman might be a good resource to contact about this.