Legal Question in Bankruptcy in Pennsylvania

My husband and I filed Chapter 7 and it was discharged in October 2008. We kept the house and the cars. We recently tried to refinance our 2nd mtg and it was brought to our attention that there is an open recorded judgement from Discover Card for $10,000 filed in the courthouse.

It says:


You are in default because you have failed to enter a written appearance personally or by attorney and fie in writing with the court your defenses or objections to the claims set forth against you. Unless you act within ten days from the date of this notice, a judgement may been entered against you without a hearing and you may lose your property or other important rights. You should take his paper to a lawyer at once.

(XXX)Assumptsit Judgement in the amount of $10,950.87, plus interest and costs.


We contacted our Bankruptcy lawyer about this and here is his response:

In order to satisfy the title issue so you can refinance we would have to reopen your bankruptcy and file a motion to avoid a lien. This would not be necessary if you are selling and the judgment will go away on its own after 5 years (may 27, 2013), but in a refinance it has to be avoided. The filing fee is $260.


I then asked him why this wasn't done prior to the discharge and this is his response:


We donít typically pursue such a motion because the judgment is unenforceable after the petition is filed and it does not interfere with the sale of the property unless it affected both husband and wife. After 5 years from the entry of the judgment it goes away automatically. It is very rarely an issue.

Filing the motion will result in an order avoiding the lien. The judgment will not show as satisfied but it will no longer possibly be interpreted as having a lien.

So basically we are confused! Do we let it stand and in May 2013 it will go away or do we pay the $260 and reopen the file? What are the possibilities that Discover wonít come around say a month prior to May 2013 and slap the lien on our house?

We would appreciate any advice or insight as all of this is confusing to us!

Asked on 6/04/12, 2:45 pm

1 Answer from Attorneys

Charles Andersen Charles Andersen, Atty

My husband and I filed Chapter 7 Hello, I am also an attorney in PA. A non voided judgment lien does interfere with the sale of the property. The property can't be sold until the judgment is paid. (Obviously)

The bankruptcy without the lien avoidance motion only discharges the debtor of personal liabilty for the judgment, the judgment still attaches to the property unless properly avoided by the 522f motions procedure.

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Answered on 6/04/12, 3:01 pm

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