If you owe a debt and don't pay it, your creditor can go to court to obtain a judgment against you. Depending on the laws in your state, the judgment may give the creditor the right to take your cash, income and assets to pay off your debt. You have several options if your creditor obtains a judgment against you.
Full Payment
The amount of the judgment may be higher than your original debt because the creditor adds various fees to it, including interest, late fees and court fees. If you have the money, you can pay off the debt in full at any time to avoid losing your asset to your creditor. After making your payment, get a Satisfaction and Release of Judgment form from the court, get your creditor to sign it and file it with the court. If the creditor garnishes your wages, you can let the debt run its course until you eventually pay off your debt.
Negotiation
If you want to pay the creditor but don't have enough money to pay the entire balance off at once, you may be able to negotiate an installment payment plan. This helps you avoid losing your money through garnishment or having a lien placed on your assets. You can determine the amount you can afford to pay every month and prepare a written payment plan. You can then contact your creditor and negotiate.
Vacate the Judgment
If you did not attend the court hearing when your creditor obtained the judgment, you may be able to bring a motion to vacate the judgment. This results in another hearing and allows you to present your defense to the judge. However, you may not be able to eliminate the judgment if the creditor has a valid case against you. To determine if you should bring a motion to vacate the judgment, consult a consumer lawyer for advice.
Bankruptcy
If you can't pay your creditor or eliminate the judgment, you may have to resort to bankruptcy. Depending on your situation, you may be able to file for a Chapter 7 bankruptcy, which eliminates your debts, or a Chapter 13 bankruptcy, which allows you to pay off some or all of your debts over time. Bankruptcy may protect your assets, terminate wage garnishments and recoup wages that have been garnished.
0 comments:
Post a Comment