Discovering that there is a judgment against you for a debt you owe can be incredibly upsetting. For many, having debt is overwhelming enough, but knowing that there is a court order allowing the creditor to seize these funds through various means can make these matters even worse. Unfortunately, many are unsure how to proceed in these matters or what their legal options are. As such, if this represents your circumstances, you’ll want to keep reading to learn how bankruptcy can help eliminate judgments, and the importance of connecting with a Memphis, TN consumer bankruptcy attorney is in your best interest.
What Does It Mean if There Is a Judgment Against Me?
A judgment is a court order that a creditor can seek by filing a lawsuit against you for an outstanding debt. Typically, these judgments are awarded when you do not respond to the initial complaint (known as a default judgment), do not provide the necessary information during discovery, lose a summary judgment, or lose a trial.
When a judgment is taken against you, it allows the creditor to take additional steps to collect the money they are entitled to. Measures often used by creditors include wage garnishments, placing levies on your bank account, and seizing your property for liquidation. In some instances, the creditor may be able to place a lien on your property, which means they technically own it until you can repay the debts.
Does Bankruptcy Eliminate Judgments?
If there are judgments against you, understanding your legal options during these matters is critical. Typically, there are only three options to eliminate a judgment against you: pay the debt, vacate the judgment, or file for bankruptcy. Paying the debt may not be a viable option, especially if there are multiple judgments against you, and you can only vacate under extreme circumstances. As such, you may wish to file for bankruptcy if you have no other debt-relief options.
If you’ve determined that filing for bankruptcy is in your best interest, it’s important to understand how this process will work. Generally, when you file for bankruptcy, Chapter 7 can eliminate the debt against you by liquidating your assets, repaying creditors, and discharging the remaining eligible debt, including the one in the judgment. During Chapter 13, you will enter into a three to five-year repayment plan that organizes your debt into one monthly payment. After your final payment, the remaining eligible debts will be discharged.
It’s important to understand that the debt covered in a judgment must be unsecured for it to be discharged. If you have debts from student loans, restitution to victims of assault or fraud, or domestic support debt, these cannot be discharged during bankruptcy, and you will still be liable for making payments.
As you can see, these matters can be difficult to navigate as they require a deep understanding of bankruptcy law. That is why you should contact an experienced attorney from the Arnold Law Firm. Our team knows these circumstances can be incredibly overwhelming, which is why it is our goal to guide you through the bankruptcy process to fight for the best possible outcome. Contact us today to learn how we can help you receive financial relief.
