If a debtor falls behind on payments, a creditor may file a lawsuit to collect on the debt and obtain a judgment for the amount owed. Norman E. Rouse, Esq. and Collins, Webster & Rouse, P.C. help defend individuals and businesses against creditor lawsuits, and work to prevent judgment liens, repossessions and wage garnishments.
When a Creditor Files a Lawsuit against a Debtor
If you owe money to a credit card company, medical provider, student loan holder or any other creditor, and you do not pay the amount owed, the creditor may take any of several different actions such as suing you in court for collection of the debt.
In a lawsuit, the creditor has the burden of justifying the judgment awards they seek. If their records are insufficient and they cannot prove some or all of the allegations they make, a creditor may lose the lawsuit. As the debtor, you can raise defenses to the lawsuit, such as:
- The creditor was not permitted to accelerate the loan.
- The creditor did not bring the lawsuit in a timely manner.
- The creditor used deception or threats in attempting to collect on the debt.
- After repossessing property, the creditor did not sell it in a commercially reasonable manner.
- The contract or the creditor violated a consumer protection law.
Norman E. Rouse, Esq. and Collins, Webster & Rouse, P.C. can give you bankruptcy help in Joplin, including defending you against creditor lawsuits. We help clients keep their property through debt settlement and bankruptcy. If your particular concern is a pending foreclosure, please see our foreclosure advice page for more information about saving your home.
If a Creditor Wins the Lawsuit
If a creditor does win a lawsuit against you, the creditor will receive a judgment in its favor. With a judgment, the creditor can use many more methods to collect the money owed than the creditor could have used without obtaining a judgment in court. The methods that the judgment creditor may use to collect money owed include:
- Wage garnishment — If you have a regular income, the first thing a judgment creditor may do is to go after your paycheck. With a wage garnishment, your employer takes a portion of your wages each pay period and sends that money to the creditor.
- Garnishment of accounts — A judgment creditor may also collect from your bank account with a regular garnishment, which allows for seizure of money held by a bank.
- Levies against real or personal property — A judgment creditor could use a levy to seize your real or personal property and sell it at a sheriff’s auction. The seized property is sold to the highest bidder. The creditor receives the high bid amount minus any fees for the auction.
Certain property is exempt from seizure by creditors, and federal laws limit the amount of money that can be garnished from wages. Norman E. Rouse, Esq. and Collins, Webster & Rouse, P.C. have extensive experience helping clients prevent and stop wage garnishment and property levies.
Before the Creditor Files a Lawsuit
Before a creditor has a chance to file a lawsuit, you may want to get an edge and proactively file bankruptcy in Joplin. Please see our personal bankruptcy, business bankruptcy and bankruptcy myths pages for more information.
Talk to a Lawyer if You Face Lawsuits and Judgments from Creditors
If a creditor has threatened you with a lawsuit or judgment, do not hesitate to contact us. Helping debtors who need legal advice and representation is what we do. Call us for a free consultation at 417.782.2222, or send an email to [email protected].