Judgments

• When someone successfully sues you, the judge grants the creditor a judgment against you. A judgment allows a creditor to take your assets without your consent. In Arizona, a creditor can garnish up to 25 percent of your wages, seize your bank accounts or file a lien on any property that you own .
  
  

Judgments and Bankruptcy

• If you are unable to pay your judgment and your creditor won't agree to a settlement, bankruptcy can help. Once you file for bankruptcy, your judgment creditor can no longer garnish your wages or seize your assets. If you qualify for a Chapter 7 bankruptcy, you may be able to eliminate the debt altogether through a discharge. If, however, you file Chapter 13, you'll be expected to make payments on it in a repayment plan.
  
  

Exceptions

• Some judgment debts can't be discharged in bankruptcy, although you can incorporate them into a Chapter 13 repayment plan. Judgments from some unpaid taxes, defaulted student loans, child support and injuries caused by drunk driving cannot be discharged in either Chapter 13 or Chapter 7 bankruptcy. After the court discharges the rest of your debts, you'll still have to continue paying those that are non-dischargeable.
  
  

Credit Reporting

• Bankruptcy doesn't eliminate information about your debts from your credit report. While having the judgment discharged or paying it off in a bankruptcy reduces your balance to zero, the judgment will remain on your credit record for seven years after issued by the court.