Understanding Bankruptcy, Jun. 17, 2020

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Question: Can I file bankruptcy after a credit-card judgement is filed against me?

Answer: Credit cards file lawsuits to show they’re upset and they miss your payment. If they win, they have a judgment against you. It’s not unusual for debt collectors to say bankruptcy doesn’t “work” then. They’re wrong!

Bankruptcy filings stop collection of debt in its tracks. That’s why debt collectors lie about it. It doesn’t usually matter if the credit card has a judgment against you. We can usually stop those too, unless there are some special circumstances (like if the judge ruled you committed fraud).

But it is better to file a bankruptcy before it gets to that point. A judgment can become a lien on your property. Some liens are hard or impossible to remove, even with bankruptcy. It depends on your situation.

Most importantly, judgments can be used by the credit-card company to get the government – the state or federal court – to help collect their money. This is where garnishments, property seizures, and other forceful takings of your stuff can start. It means you’re losing control of your financial affairs and the other guys have it now. Those things can normally be stopped with bankruptcy too.

So taking the plunge and contacting a bankruptcy lawyer before a judgment is taken is a good thing. It gives you time to plan and prepare. It allows the case to be put together carefully. But even if you waited too long, it’s probably not too late. But don’t keep waiting; all that does is push your chance to get back on your feet down the road.

Michael A. Cibik, Esquire

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