You Have Options to Protect Your Money and Find a Better Path Forward
Receiving calls, texts, and mail from a collection agency is stressful, but when you find out your creditor is suing you because of your debt, your anxiety and frustration reaches another level.
The thought of having to deal with your creditors through the legal system makes you feel like the walls are closing in. You fear for your bank account, your paychecks, and even your home. You might have questions on your mind:
- Are creditors allowed to sue me?
- What can they take from me?
- Can they do this without my permission?
- How do I know what to do next?
- Should I get a lawyer?
- Does filing for bankruptcy really help?
Our law firm hears questions like these all the time from concerned clients who have been notified they are being sued by a creditor. Keep reading to find out how we answer them.
Do Creditors Have the Right to Sue Me?
Creditors for unsecured debts, such as credit cards and medical bills, can’t automatically take your money. However, they are legally allowed to sue you to collect the money you owe, and you likely signed off on this right. For example, in the contract for your credit card, the fine print explains the company’s right to pursue legal action to collect on a debt.
What Can Creditors Take From Me?
Your creditors can seek payment for your debts after they have secured a judgment against you. They are legally able to garnish your wages or your bank account. This means that they can take a certain percentage of your paycheck or withdraw the funds from your bank.
Can They Garnish My Wages Without My Permission?
Garnishment is a court order to collect on the debt you owe. Because your creditor has filed a lawsuit and the court has entered a judgment, they now have the right to take funds from your paycheck or account without your permission.
What Should I Do After a Creditor Sues?
You will be informed through your employer or your bank that the court has ordered what is called a writ of garnishment against you. You now have 14 days to claim an exemption of $2,500 worth of funds in your bank account. You can also file for bankruptcy to stop your lawsuit.
What Happens When I File For Bankruptcy?
Filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy gives you an automatic stay against your creditors, meaning that they now cannot garnish your wages, and a bankruptcy court has the right to determine the outcome of your case. Your lawyer will help you through the bankruptcy process, so you can experience these results:
- In Chapter 7 bankruptcy, you can completely wipe away your unsecured debt, such as credit card and medical bills you haven’t paid.
- In Chapter 13 bankruptcy, you will pay your creditors manageable installments on a three- to five-year payment plan, giving you more control over how you pay. After this, your debt will be discharged.
Does Bankruptcy Work For All Debts?
Bankruptcy doesn’t stop all lawsuits. It may not be able to help you avoid wage garnishment related to criminal, child custody, or child support cases.
Will Bankruptcy Have a Negative Effect On My Finances?
When you file for bankruptcy with a lawyer and see your debt discharged, you are able to get a fresh start without having to pay back what you owe your creditors.
Bankruptcy does impact your credit score, but how much it affects it is tiered by your current score. The lower your current score, the less points are deducted when you file.
If you’re ready to chart a new path with your finances, you could achieve a 700 credit score and may be eligible for a mortgage within two years of filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy.
How to Find a Lawyer to File For Bankruptcy
Bankruptcy can help you stop a lawsuit from your creditors, protect funds in your bank account and paycheck, and wipe away your debt – if you hire a knowledgeable, strategic bankruptcy attorney.
Look for an attorney with:
- Significant experience with lawsuits from creditors.
- Exceptional knowledge of Chapter 7 bankruptcy and Chapter 13 bankruptcy.
- A free consultation policy, so you understand how the firm will approach your case before you agree to begin.
With a bankruptcy attorney on your side, you’ll not only be able to get answers to your questions, but you’ll find a solution that can put you on a new financial path.