How to Remove a Judgment Lien
Under New Jersey law, a judgment lien is a lien obtained as a result of a monetary judgment. Judgment liens can be recorded against property such as a house or a car. This is done in New Jersey, by docketing the judgment in Trenton.
When a debtor who files bankruptcy is discharged of the debt, the judgment becomes unenforceable against the individual personally. In other words, that judgment creditor can not levy on personal assets of the debtor or apply for a wage garnishment. If the judgment creditor has docketed the judgment, the lien would still appear of record against the real estate. Should the debtor move to sell the property in the future, that lien will still appear of record and is collectible from the debtor.
In the bankruptcy context, if the judgment lien applies to exempted property, it may be eliminated by the Bankruptcy Court. To avoid a judgment lien, a motion to remove the judgment lien must be filed during the pendency of the bankruptcy case, in addition to the filing of a Chapter 7 petition. Liens related to child and spousal support judgments may not be avoided.
After the Chapter 7 Bankruptcy case is closed, New Jersey allows a debtor to file a state court action to remove a judgment lien from a piece of exempted real estate. That action in New Jersey can be brought one year after the bankruptcy matter is resolved. A debtor seeking to remove the judgment lien against property, would file an Order to Show Cause on notice to the creditor holding the judgment.
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