Collections lawsuits are usually served after creditors have been quite exhaustive in their efforts to collect on a debt. You may have had an ongoing, smooth relationship with one or more credit card companies for years, only to suddenly see your finances in disarray and your credit score plummeting after a rough year. While there is no shortage of consumers who give in to the temptation to overspend on credit cards, most debtors find themselves in distress due to events out of their control. If you are in such a position currently, medical bills may be the cause of serious money problems—along with other issues such as the inability to work due to an illness or accident, overburdening student loans, family problems and/or divorce, and more.
Receiving a summons and complaint from a creditor may just seem like one more devastating blow, but with the help of a skilled collections lawsuit attorney you can explore your options and act quickly to get your finances under control. Your attorney may advise you that the best recourse regarding the lawsuit is to respond and then defend the case in court—or you may be amenable to negotiating a discounted settlement; however, if neither of those options are realistic and your income is low enough, filing for Chapter 7 bankruptcy may be your best choice.
You may be reluctant to file for bankruptcy due to numerous factors. It may seem like an intimidating process that you know nothing about, and you may be worried about all the paperwork and information that must be submitted to the bankruptcy court. With the help of a skilled bankruptcy attorney, you should find the process to be streamlined—and keep in mind that hundreds of thousands of people file each year. You may be worried about social stigma, your credit report, losing your possessions, never being able to buy a car or home again—along with other typical concerns. While it will take you some time to get back on track, if you are in serious financial distress, that is going to be the case anyway. As for what the neighbors think, chances are they have been through serious financial issues of their own at one time or another, and they may have even filed for, or already completed a bankruptcy. And in most cases, you can keep your home and car and other possessions and will be able to apply for loans again in the future, although it may take a few years to get approved or find the interest rate that works for you.
The bottom line is that bankruptcy can be a positive financial planning tool that will put you back on track for meeting your financial goals. If you are eligible for Chapter 7, all debt collections activity will cease immediately upon filing as the automatic stay goes into effect. After that, the lawsuit may be discharged in your bankruptcy, along with most of your other unsecured debt.
If the lawsuit escalates into a default judgment being granted against you due to lack of a response, you might find yourself facing unpleasant repercussions like funds being taken from your paycheck monthly to satisfy the debt, property seized, and/or bank accounts frozen. With skilled legal help, you may be able to have the judgment reversed, or in filing bankruptcy, have the issue and debt discharged altogether.
Speak with an attorney from Fitzgerald & Campbell, APLC as soon as possible to examine your options. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (844) 431-3851, or email us at info@debtorprotectors.com