Yes, you can discharge a lawsuit judgment in bankruptcy. However, not all judgments qualify. Knowing which debts are dischargeable is essential if you’re facing collections or garnishment in Michigan.
This guide explains:
- Which lawsuit judgments can be discharged
- Which cannot
- How bankruptcy protects you
- Why consulting a bankruptcy attorney matters
Let’s dive in.
What Is a Bankruptcy Discharge?
A bankruptcy discharge is a federal court order. It permanently eliminates your obligation to repay certain debts.
When you file Chapter 7 or Chapter 13 bankruptcy in Michigan, the court issues a discharge at the end of your case. This prohibits creditors from:
- Calling you for payment
- Sending bills or collection letters
- Filing lawsuits
- Garnishing your wages
- Reporting the debt as unpaid to credit bureaus
The discharge injunction is powerful because federal bankruptcy law overrides Michigan state court judgments.
Are All Lawsuit Judgments Dischargeable?
No. While many judgments are dischargeable, some are not. It depends on the type of debt the judgment is based on—not the fact that a Michigan court issued it.
Below are examples of both dischargeable and non-dischargeable lawsuit judgments.
Dischargeable Lawsuit Judgments in Bankruptcy
Most lawsuit judgments based on unpaid bills or contracts are dischargeable. Common examples include:
1. Credit Card Debt or Loan Judgments
If a credit card company sues you for breach of contract, the resulting judgment is dischargeable in Chapter 7 or Chapter 13 bankruptcy.
2. Eviction Judgments for Back Rent
Judgments for unpaid rent—before your bankruptcy filing—are dischargeable. However:
- Rent owed after you file is not.
- The eviction itself may still proceed unless special steps are taken.
3. Medical Debt Judgments
Medical bills are contract-based. If your provider sues for unpaid services, the resulting judgment is fully dischargeable.
4. Mortgage or Auto Loan Deficiency Judgments
If your home or car is repossessed and sold for less than you owe, the remaining debt is a “deficiency.” A judgment for that amount is dischargeable.
Non-Dischargeable Lawsuit Judgments
Certain lawsuit judgments cannot be wiped out in bankruptcy. These include:
1. Injunctions or Non-Monetary Judgments
A court order stopping you from doing something—like building a fence—cannot be discharged. Bankruptcy only erases money debts.
2. Eviction Judgments of Possession
If your landlord has already obtained a judgment of possession, filing bankruptcy will not stop the eviction for long.
3. Child or Spousal Support Judgments
Support obligations from a divorce case are never dischargeable. These debts also are not paused by filing bankruptcy.
4. Student Loan Lawsuit Judgments
Student loans are generally non-dischargeable unless you file a special lawsuit within your bankruptcy case. Most people do not.
Why Bankruptcy Can Still Help
Even if some judgments cannot be discharged, bankruptcy can stop:
- Wage garnishments
- Bank account levies
- Constant creditor harassment
Chapter 13 may also allow you to repay non-dischargeable debts in manageable installments.
Consult a Livonia Bankruptcy Attorney About Your Judgment
Not sure whether your lawsuit judgment is dischargeable?
Bankruptcy attorney John Hilla of Noble Path Legal PLLC offers free consultations. With offices in Livonia and clients across Metro Detroit, we provide:
- Virtual appointments
- Personal, one-on-one guidance
- Experienced legal representation
We serve clients in Livonia, Detroit, Redford, Westland, Inkster, Farmington Hills, Northville, Plymouth, Ann Arbor, and beyond.
Don’t wait. Lawsuit judgments won’t go away on their own. Bankruptcy can help—if the debt qualifies.
Schedule your free bankruptcy consultation by clicking the button below or calling us at (734) 224-7167.