Is Bankruptcy Still an Option after a Judgment?

Chances are if a creditor has received a judgement against you, you’ve been struggling with your finances for a while. But like many people, you might’ve ignored the problem hoping it would go away, or you didn’t realize the severity of your situation. A judgement means the court has gotten involved and found in favor of the bill collector.

Does this mean you’re out of options?

Of course not.

Judgements mean you have fewer options – but you still have options. One of the best ways to deal with the situation is through bankruptcy. In an ideal world you’ll file for bankruptcy before it’s an absolute necessity and before there’s a judgement, but waiting doesn’t mean you lose your option to file.

Despite your situation being less than ideal, filing for bankruptcy is an option as long as you qualify for bankruptcy. This allows you to eliminate or restructure your debts – including the one related to the judgement – and get your financial situation under control. The only thing that can prevent you from filing for bankruptcy after a judgement is if it’s determined you committed fraud or did anything that would interfere with a discharge. The judgement, in and of itself, does nothing to alter your ability to file for bankruptcy.

Non-Dischargeable Debts

Keep in mind, not all debts are dischargeable through bankruptcy. In this case, it won’t matter if there is a judgement or not – the debt won’t be discharged. But filing for bankruptcy can help you get other aspects of your finances under control, which can free up money to deal with the non-dischargeable debt.

Bankruptcy courts determine is a debt is dischargeable based on a few different factors, but in most cases, you can assume student loan debt, unpaid alimony and child support, and fees and penalties assessed by the court won’t be discharged. The most commonly discharged debts in bankruptcy include credit cards and medical debt.

For more information on dischargeable and non-dischargeable debts, check this out.

What You Should Do If You Receive Notice of a Lawsuit?

If a creditor has filed a lawsuit against you, it’s important to respond to the lawsuit and hope it doesn’t just go away. Not responding to the lawsuit results in an automatic judgement in favor of the creditor that filed the lawsuit.

If a creditor has taken action, but the court date has not arrived, contact an attorney as soon as possible. He or she can help you respond to the lawsuit, which could prevent the judgement or at least help you assess your options and determine if bankruptcy is the best choice for you.

And if a judgement has occurred and you’re facing the threat of wage garnishment or other actions the creditor can take to collect on your debt, there’s still time to file for bankruptcy. It might be the only way to get control of your situation and get back on the right financial track.

For more information or to learn how bankruptcy can help you before and after a judgement, contact R. Flay Cabiness, II, P.C. at (912) 554-3774 (Brunswick, GA); (912) 375-5620 (Hazlehurst, GA) or; (912)-554-3756 (Jesup, GA).