Bankruptcy: Recorded Judgment Honored

     The Virginia Supreme Court held in Leasing Service Corp. v. Justice that a judgment creditor, who recorded its judgment prior to the debtor filing its bankruptcy petition, would not be prevented from a post-discharge enforcement of its lien upon the debtor's real property interests in jurisdictions that were acquired before the commencement of the bankruptcy proceedings. Specifically, the Court ruled that the lien was not paid off or discharged in the bankruptcy proceedings, and could not be ordered released pursuant to Virginia Code §8.01-455. Therefore, the judgment continued to be a lien on any interest that debtor may have had in land located within that county, despite his bankruptcy discharge from personal liability in the payment of the judgment.
     The lesson of Justice is that you should always promptly docket your judgments where you believe that the debtor owns or may own property.