How to Avoid a Judgment Placed Against Your Assets

The best way to avoid having a judgment placed against your assets is to pay your bills, unless you are in a dire financial position. Life can throw you a curve, and the situation may temporarily call for discretionary bill paying to cover the absolute necessities while other obligations go unpaid. Unfortunately, as the unpaid bills accumulate, your creditors are well within their rights to obtain court-ordered liens against your assets or levy your bank accounts to collect unpaid debts.

Instructions

1

Educate yourself about debt collection laws in the state where you live. Your local library probably has several books available on debt management and collection laws. You can look online to research reputable financial websites that aim to educate the average consumer. You can also consult with a debt collection attorney.

2

Plan ahead to avoid having a judgment placed against your assets. You must take pre-emptive steps as soon as you know financial difficulties lie ahead, before a creditor seeks a judgment against you. Hiding assets after a lawsuit is filed against you can result in fraud charges.

3

Find a debt collection attorney who offers free consultations. Search your local phone directory or ask family, friends or co-workers for referrals, then make an appointment. A certain amount of risk is involved in keeping your assets out of the hands of creditors, and there are disadvantages that come along with each option.

4

Transfer ownership of your home or vehicle to one of your adult children, spouse or other trusted family member. The disadvantage is that you are legally surrendering control of the property, but you avoid a judgment against your home or vehicle, since your name is no longer attached to the asset.

5

Avoid offering information about your financial circumstances to a creditor that has not been contacting you. All information should be on a need-to-know basis, so if a creditor is not asking, do not tell. But never fail to respond to a lawsuit that has been filed by one of your creditors. Doing so can create bigger problems.

6

Open a new bank account with a different institution and close your old account. Transfer all funds to the new account, or withdraw the money and deal strictly in cash for the time being. Creditors have resources for locating your money and can legally seize it through a levy of your bank accounts. Be aware that creditors may garnish your wages if they find no bank accounts.

7

File for bankruptcy. State and federal bankruptcy laws allow for the exemption of certain assets in bankruptcy proceedings. Be aware though, certain debts such as child support and back taxes cannot be erased through bankruptcy and you could still lose assets.