For many, filing for bankruptcy is not a decision that is made lightly. Though this process can help debtors receive much-needed financial relief, it can have serious financial implications. Lenders may be less likely to extend loans to you, and if they do, you can expect much higher costs. Additionally, bankruptcy can take a considerable toll on your credit score. However, for those who have a judgment against them, this process can seem appealing. The following blog explores what you should know about whether or not you should pursue bankruptcy if there is a judgment against you and how a Memphis, TN consumer bankruptcy lawyer can help you during these difficult matters.
What Does It Mean When There is a Judgment Against Me?
When there is a judgment against you, it means that the creditor you owe funds to has successfully filed a lawsuit against you as a means of collecting the money they are owed. If you fail to respond to the lawsuit, you’ll find that the creditor will obtain a default judgment against you. This means they win the case by default and can take whatever means necessary to get the money they deserve. Common collection tactics when there is a judgment against someone include garnishing wages and placing a lien on your property.
How Will This Impact My Bankruptcy Case?
If planning on filing for bankruptcy, you may wonder how it will impact a judgment against you. It’s important to understand that you can pursue this process even if there is a judgment against you. However, before you rush to file, it’s important to understand that like anything, this process has pros and cons.
One of the benefits of filing bankruptcy is that it grants you an automatic stay. Essentially, this means that once the bankruptcy is filed, your creditors must immediately stop all collection efforts against you, including contacting you, foreclosures, and judgments. This allows you time to get your finances in order and catch up on payments. It is important to understand that if a lien is filed against you before you file for bankruptcy, the lien will still remain in effect, however.
It’s also important to understand that if your creditors choose to, they can petition the court to lift the automatic stay so they can continue pursuing collection efforts against you.
As you can see, there are many considerations you must make during this process. Unfortunately, trying to navigate bankruptcy on your own can be incredibly complicated, which is why it’s imperative to connect with an experienced attorney who can help you during these matters. At the Arnold Law Firm, our team will do everything possible to help you during these difficult times. Connect with us today to discuss your options so you can make the most informed decision based on your circumstances.
