Judicial Lien

• When a debtor owes money to a creditor, the creditor has the right to file a lawsuit in an attempt to collect the unpaid debt. If the creditor wins the lawsuit, the court enters a judgment against the debtor that may not only include the debt amount, but the creditor's attorneys' fees as well. The creditor can place a lien on the debtor's property if the court judgment remains unpaid. The creditor would receive a portion of the proceeds to satisfy the judgment when the property is sold.
  
  

Bankruptcy Exemptions

• Bankruptcy law allows debtors to claim exemptions for certain assets, such as a house, car, retirement benefits and household furnishings. Claiming exemptions prevents the bankruptcy trustee from using the assets to pay creditors. Exemptions were created so that debtors could maintain the standard of living needed to get a fresh start after filing for bankruptcy. According to 11 U.S.C. §522(f), the debtor can remove a judicial lien to the extent it prevents the debtor from claiming the full value of an exemption. Consult with a bankruptcy attorney to confirm if the judicial lien is eligible for avoidance under the bankruptcy code.
  
  

Bankruptcy Petition

• Complete the bankruptcy petition available on the state's bankruptcy court website. List the name and address of the creditor with the judicial lien in the petition, along with all other creditors. Claim the applicable exemptions in Schedule C of the bankruptcy petition. The state bankruptcy court website provides a list of filing fees for each chapter of bankruptcy. Submit the petition and filing fee to the bankruptcy court clerk.
  
  

Motion to Avoid Lien

• Bankruptcy court approval is required to remove a judicial lien from property. Draft a Motion to Avoid Lien. The motion should state the debtor's right to claim an exemption for the respective property under bankruptcy provision 11 U.S.C. §522. The motion should also state that the creditor's judicial lien impairs the debtor's ability to claim the full value of the exemption. Call the court to obtain a hearing date for the motion and file the motion with the court. If the court approves the motion, an order is entered in the court docket avoiding the judicial lien.