Tayne, for helping me get out of debt. Your staff did a great job, I was finally able to buy myself a brand new car without using a cosigner. I would recommend your services to anyone. I sleep like a baby at night now because of the work that you and your office have done.
Rest assured that I will refer anyone I know to your office with conditions that are similarly circumstanced. You have been very helpful at first directing me in the right direction when I had no clue how to go about handling everything, I really appreciated all your advice and help and hope we can work something out.
Thanks again for all your help and kind words, and patience. Is There a Judgment Against You? Therefore, if you are not holding up your end of the agreement, the lender or creditor can sue you. What is a Judgment? A judgment could be filed against you in several ways: You fail to show up in court: If the creditor files a suit but you fail to appear in court or respond to the suit properly, the creditor will win the suit and therefore can file a judgment.
The debt is legally yours: If you do take action on the lawsuit but the court finds that you are legally obligated to the debt, the creditor can still file a judgment. This can happen even if you respond properly and appear in court.
Generally, to overcome a lawsuit, you will need more than an inability to pay as a defense. Some examples of property that can be included in a judgment are: Wages: One of the most common ways a creditor seizes property is through wage garnishment. In this case, the creditor will legally require your employer to hand over a certain percentage of your income each pay period. This is generally about 10 percent of your gross wages per pay period.
This varies between states. This is mandated by the Consumer Credit Protection Act. Nonwage garnishment: In addition to wage garnishment, the creditor can freeze your bank account instead. Normally, you would have no warning when this happens. You may find out by trying to access your account and find the funds frozen. However, certain exemptions exist here as well. In other words, a judgment filed in California has no bearing upon property located in New York unless the creditor takes the California judgment to a New York court and has it filed there as well.
If a judgment has been issued against you, the creditor can satisfy its judgment by freezing your bank account and taking a portion of your wages. Procedures differ from state to state. For example, in New York the creditor needs to get in touch with an enforcement officer such as a Marshal or Sheriff. Once that happens, he or she can serve a restraining notice on the bank, or on some other person or business that owes money to the judgment debtor, and eventually take the money.
If you are employed, the enforcement officer can garnish take a portion of your salary to satisfy the judgment. The creditor has claimed that you owe money, and a court has agreed. That said, here are some options for you to consider:. The judgment creditor can take steps against you to make your life even more difficult. Having all the information you need about your options makes all the difference. That gives an enforcement officer like a Sheriff or City Marshal the green light to go seize and sell your stuff.
They could haul your collector car off to an auction, for example. It sounds invasive, but it's legal. A judgment could also give a creditor a lien to your property. That means they own it. Say you've been working on selling your house.
Either you won't be able to sell it until you pay, or whatever you make from selling the house will first go toward the debt. Another common way of collecting a debt is garnishing. The court can order your employer to take money out of your wages. They can also pull money directly from your account. The amount will vary depending on what state you live in, and there's a cap so you have enough left to survive.
In most cases, VA benefits and Social Security are off-limits. Looking from a new angle at what happens if a defendant does not pay a judgment, here's an especially tricky way they'll get money out of you: putting you into jail.
If the creditor can't legally access your money or possessions, they might instigate a debtor's examination, where they can ask you a bunch of questions.
If you choose prison, you'll stay until you pay the bond — which will probably be the amount you owe. So, don't forget to show up to a debtor's examination! Even if the creditor has done this numerous times — even if you know they can't win — they're just hoping you forget to show up one day. Regardless of your situation, whether you're willing to pay or are holding creditors at bay, remember that a judgment will accrue interest for as long as it's active. Keep reminding the creditor during your case.
If you are collection proof tell the creditor. Even if you do not have the money to pay the debt, always go to court when you are told to go. A creditor or debt collector can win a lawsuit against you even if you are penniless. The lawsuit is not based on whether you can pay—it is based on whether you owe the specific debt amount to that particular plaintiff.
Even if you have no money, the court can decide:. The judge has already decided that you owe money to the plaintiff. The judge has not decided how you are going to pay the plaintiff back. The creditor has to follow a second step to collect the money you owe. They will hire a sheriff or a constable. The sheriff or constable will bring you a copy of the execution and take your car or put a lien on your house. If you are collection proof, the creditor cannot take any of your assets or income even though they have a judgment against you.
If some of your stuff or some of your income is protected by exemptions, you need to know what and how much so that you can make sure that it is not taken from you. If you know what exemptions protect your income or things , you can tell the judge and the judge will not order you to pay from those assets and income. The plaintiff and the judge will probably ask you again and again if you can pay anything towards the debt.
They will also ask if you are willing to enter into a repayment plan. A repayment plan is an agreement with the creditor that you will pay back the debt by paying a set amount every month. If the agreement is made into a court order and you do not pay back the amount you have agreed to pay, you could be in violation of the court order. Only agree to a repayment plan if you really agree.
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