Learning that a judgment has been issued against you for an outstanding debt can be distressing. This legal ruling places you in a vulnerable position concerning your financial future, granting creditors the authority to take more aggressive measures to recover the owed amount. If you find yourself confronting this daunting reality, it’s crucial to understand that bankruptcy may offer is viable solution, enabling you to regain control over your finances. Please continue reading to learn whether or not filing for bankruptcy can eliminate judgments against you and how a dedicated New City Bankruptcy Attorney can assist you in navigating your relief options.
What Does It Mean if There is a Judgement Against Me?
A judgment is a court order that establishes a person’s legal responsibility to pay a debt to a creditor. In New York, creditors have the right to file a lawsuit to seek payment for outstanding debts. After a judgment is entered, creditors are entitled to take actions such as garnishing wages, seizing assets, or placing liens on a debtor’s property to collect the balance owed.
It’s important to note that if you fail to respond to a creditor lawsuit or if you fail to appear in court, the creditor can win a default judgment against you. This failure is often perceived as an admission of the debt’s validity by the court. If a default judgment is entered against you, the creditor is permitted to proceed with collection efforts.
Will Bankruptcy Eliminate Judgements Against Me?
When a judgment is entered against you, it’s crucial to understand your legal options. There are several avenues you can pursue to eliminate it. If you have the financial resources available, it may be possible to satisfy the judgment by paying the outstanding debt. However, this may not be a feasible option for those with limited funds or multiple judgments. In certain circumstances, you might be able to have the judgment vacated, essentially nullifying it. If no other debt-relief options are viable, you may wish to file for bankruptcy.
To determine whether filing for bankruptcy is the best course of action, it’s advisable to consult with an experienced bankruptcy attorney. Bankruptcy can temporarily halt collection actions related to a judgment. The outcome of a judgment depends on the type of debt and the specific bankruptcy chapter filed.
Under Chapter 7 bankruptcy, you can eliminate debt by liquidating your non-exempt assets, using the proceeds to repay creditors, and then discharging the remaining eligible debt, including the debt associated with the judgment. Under Chapter 13 bankruptcy, you can enter into a court-approved repayment plan that typically spans three to five years. This plan restructures your debt into one manageable monthly payment. Once all payments are made under your plan, the remaining eligible debts will be discharged.
You should note that only certain types of debt can be discharged in bankruptcy. Generally, unsecured debt covered in a judgment like credit card debt or medical expenses can be discharged. However, certain types of debt like a mortgage and some unsecured debts like support obligations are typically not dischargeable. Therefore, even if you file for bankruptcy, you may still be liable for making payments on these debts.
Before deciding on bankruptcy, it’s in your best interest to connect with a qualified attorney from The Lauterbach Law Firm, who can assess your financial situation and advise you on the best course of action. Connect with our firm today so we can guide you through these difficult times.
