What Happens after a Collector Obtains a Judgment?
If you are struggling financially and your creditors have started filing collection lawsuits against you, it is time to get help. As soon as you are served with the petition or complaint, call us. You have a limited amount of time to respond before a default judgment will be entered against you.
Most collectors file lawsuits with the hopes that the consumer will ignore it and they will obtain a quick default judgment. By simply having us file a response in the lawsuit, your chance of negotiating a settlement for a reduced sum is significantly increased.
It is common for collectors to file collection lawsuits for unsecured debt, or debt that is not supported by assets pledged to the lender as collateral. This includes credit cards and medical bills. However, once the collector is granted a judgment against you, there are post-judgment collection tools available that allow the collector to attack certain assets. For example, the collector can garnish your paycheck, freeze your bank account, or even place a judgment lien against your home. Additionally, a judgment creditor is also allowed to charge a court-approved interest rate, which may be higher than the original interest rate.
What should you do if a judgment has already been entered against you? Immediately contact us for assistance. You still have several options to consider, such as:
- You can fight the judgment. If the creditor obtained a default judgment against you, the court may allow you to still have your day in court. This is particularly true if you were not properly served or there was some other procedural error.
- Negotiate a settlement with the judgment creditor. Even though the collector has a judgment against you, it still takes time and money to collect on it. Many collectors are willing to settle for a reduced sum in order to save the money and effort, especially if they are worried you may file a personal bankruptcy case and discharge their judgment.
- File a Chapter 7 or Chapter 13 bankruptcy case. As soon as you file a bankruptcy, the automatic stay goes into effect and halts all collection efforts against you, including lawsuits. If the collector has an unsecured judgment against you, it is likely that you can discharge or eliminate it in your filing.
- Remain “judgment proof.” The term “judgment proof” is used to describe individuals who have only exempt assets and a modest income. The law protects you, but it can be difficult to determine if your wages and assets are truly safeguarded from seizures.
The worst thing you can do is ignore a judgment that has been entered against you. They remain on your record for years and can affect many different aspects of your life.
Fitzgerald Campbell has many clients with judgments and we settle judgments on behalf of happy clients nearly every day. If you have a judgment and don’t know where to turn, contact us right away, even if you are being garnished or levied. Get the protection and experience you need and deserve. You may be surprised how easy it is to get knowledgeable and experienced attorneys working for you.