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Mar 2013

Can they put a lien on a house I bought after the bankruptcy?

Posted by / in Virginia Bankruptcy / 3 comments

Did you put off filing bankruptcy until after somebody got a judgment against you?

Pre-bankruptcy judgments are liens on property you own before the bankruptcy.  (Sometimes they can be removed;  sometimes they can’t.)   But they cannot put a lien on a house you buy after the bankruptcy.

At least, not legally.

The purpose of bankruptcy is a new start in life and a clear field for the future.   Many people bounce back from bankruptcy and become home owners in a few years.  Later when they go to sell that new home, those pre-bankruptcy judgments sometimes rise from the grave.


Your pre-bankruptcy judgments are not a lien on your after bankruptcy house. Not legally.

Not legally.  But they do.  Like zombies.

Michael Wells, an experienced bankruptcy lawyer in Midlothian, VA, gave this recent example.

Client comes to me with a problem: he is trying to complete a sale on his house, but is being told that he must “take care of” three civil judgments that were discharged in a 2007 Chapter 7. He did not own the real estate pre-bankruptcy; it was purchased several years later. The real estate attorney for the seller contacted the lawyers for the judgment creditors and has been sent fax letters with demands for payment from the proceeds of the sale. The paralegal handling the sale claims “judgments last for 20 years” and does not believe client when he explains that these are discharged debts and never attached to the real estate.

There are two problems here.  Dumb and dumber.

The title people handling this transaction are dumb.  The paralegal who says “judgments last twenty years” should know “but they don’t attach to new property after bankruptcy.”  That’s the basic thing that everybody who has anything to do with real estate should know about bankruptcy

If you are in Virginia  and you have that problem, there’s a smarter title company you can use.  The lawyer for Old Virginia Title, in Fairfax VA, is Richard Bolger, who has experience in both real estate law and bankruptcy law.  He knows that pre-bankruptcy judgments don’t attach to after-bankruptcy real estate.  In our example, Old Virginia Title would do the title work approving the sale without paying those judgments.

If the title people are dumb, the collection lawyers for the judgments dumber.

First those collection lawyers should also know that the judgment liens don’t attach to after bankruptcy real estate.

Second, they should know that in asking for payment they are violating the bankruptcy discharge injunction.

Annandale bankruptcy lawyer Richard Hall recently got Judge Mayer to slam collection lawyers who did that exact thing.  In fact, I think Judge Mayer gets mad enough that he will slam everybody in sight.  In this example, he’d slam the dumb title people, too.

(Bankruptcy Judge Robert Mayer says that the judgment creditor is required right after the bankruptcy to show the discharge  in the county land records.  So even dumb title people aren’t confused.  The lawyers in our example have two bankruptcy violations.  Number One:  They should have already updated the land records to show the judgments were discharged.  Number Two: They should NOT try to collect on discharged debts.)

Finally, the collection lawyers who demand payment on a discharged debt are also violating the Fair Debt Collection Practices Act.  They are making a false representation of the legal status of a debt.   There’s thousand dollar statutory penalty under the FDCPA.  That’s on top of penalties by the bankruptcy judge.

So, if you go to sell your after-bankruptcy house, and you’re told you have to pay your pre-bankruptcy judgments, don’t be fooled by dumb title people and dumber collection lawyers.  Talk to your bankruptcy lawyer right away.


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Robert Weed has helped twelve thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

  • Robert Weed

    Robert Weed

    April 1, 2014, pm30 7:38 PM

    Just had another client who had this problem. The title agent was saying there was a lien on the house she bought eight years after the judgment and seven years after the bankruptcy. It took a while but I was able to get the title agent to talk to her lawyer. Who agreed I was right..

    Good morning,
    I have had my underwriting counsel review and you are correct. Thank you for looking into this. I will let Ms. Davis know as well.
    Thank you,

  • Paula

    August 28, 2014, am31 1:42 AM

    My loan application can’t make it through the final stages of review because an underwriter is demanding that a pre-bankruptcy judgement–that was discharged fully in bankruptcy–must be declared paid/satisfied/released before I may purchase the house. The position of the underwriter is that the judgment leaves me (and my future property) liable.
    The exact wording from the underwriter: Including a judgment in a bankruptcy doesn’t satisfy or eliminate the borrower from liability even after the bankruptcy has been discharged. The bankruptcy attorney needs to file a release / discharge of the judgment through the local courthouse where it was filed. Having a credit supplement stating included in bankruptcy doesn’t satisfy the condition for proof that it has released nor will providing copies of the bankruptcy paperwork with the creditors holding unsecured liens. We need an actual release of judgment in order to clear this condition.

    • Robert Weed

      August 28, 2014, am31 10:32 AM


      Two things.

      First, one judge here in Alexandria VA says that the CREDITOR has an obligation under Virginia law to show a discharge on the judgment. You can see what your lawyer there thinks.

      Second: Including a judgment in a bankruptcy DOES satisfy or eliminate the borrower from liability even after the bankruptcy has been discharged. Maybe you need to talk to a smarter lender.

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