In most cases, if you fail to pay on a debt the creditor will file a lawsuit against you. If the court rules in favor of the creditor they receive a judgment which gives them the right to pursue aggressive collection actions against you. These actions might include seizure of assets, liens against secured assets, or forcible bankruptcy.
The good news is there are things you can do to avoid a judgment against you.
First and foremost, the most important thing you can do is to not avoid the problem. If a creditor is taking legal action against you and you assume the problem will go away if you ignore it, you’re wrong.
The worst thing you can do is to ignore legal action against you by a creditor because it will result in an automatic judgment. Even if a debt isn’t legitimate, you’re at risk for facing a judgment if you fail to take action.
Filing for Chapter 7 bankruptcy stops collection efforts against you.
In most cases, it renders judgments null and void. This means anything that happened as a result of the judgment must stop, including asset seizures, unless it was linked to a debt that’s not dischargeable, such as child support or alimony payments.
Other instances in which a court ordered judgment won’t be overridden by bankruptcy include debts related to:
In addition to these debts that are automatically non-dischargeable, there are also instances in which a creditor can file an adversary proceeding with the bankruptcy court requesting their debt not be discharged and they be granted the right to collect despite the debtor having filed for bankruptcy.
If you’re interested in filing a bankruptcy stop a judgment take the Chapter 7 Bankruptcy Calculator below to estimate your qualification and compare pros and cons.
It’s important to speak to your bankruptcy attorney about all of your debts and whether you have concerns about any of them being discharged. An experienced bankruptcy attorney can help you deal with objections raised by creditors and hopefully assist you in having any court ordered judgments removed once you file.
One final option you have if a creditor is still able to attach a lien to an asset is lien avoidance. This might be an option if the lien is from a money judgment against you, you have equity in property that you can claim an exemption against, and the judgment lien uses up some or all of the equity that could be exempted.
You can learn more about lien avoidance here.
Bankruptcy laws can be complicated, especially when you’re dealing with judgments and trying to protect assets. Working with an experienced bankruptcy attorney can make the process easier.
To learn more or to schedule a consultation with a team that can help, contact the Law Office of Robert M. Geller at 813.254.5696.
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