If a creditor is suing you to recover money owed, you need to seek legal advice as soon as possible. Ignoring the problem is not a good solution and can effect your legal rights. Seeking legal advice sooner rather than later will help ensure that you do not waive any of your legal rights.
If a creditor sues you on a debt in Alabama, the creditors complaint will be filed in either Circuit Court, District Court or Small Claims Court. Once you are served with the complaint, you have 30 days to file an answer or otherwise respond to the complaint for cases pending in Circuit Court. For cases pending in District Court or Small Claims Court, you have 14 days to file an answer or otherwise respond to the complaint.
If your creditor is successful in their lawsuit against you or if you just fail to respond to the lawsuit, a judgment will be entered against you by the court. A creditor who holds a judgment against you is often referred to as a “judgment creditor.” A judgment creditor will attempt to garnish your pay check, your bank accounts and possibly seize or levy your property.
Often times judgment creditors will record their judgment in the county where you reside or own property. A recorded judgment becomes a lien on all real and personal property you own in the county where the lien is recorded.
Judgements are normally picked up by TransUnion, Equifax, and Experian. A judgment on your credit report will negatively effect your credit score.
Filing for Bankruptcy to Stop a Lawsuit
Bankruptcy can stop a pending lawsuit against you for debt relating to unpaid credit cards, outstanding medical bills, a deficiency balance on a vehicle repossession, or a deficiency balance on a foreclosure. Once a bankruptcy case is filed, you will receive immediate protection from the automatic stay. We notify the State Court of your bankruptcy filing by electronically submitting a suggestion of bankruptcy to the Clerk of the Court.
In most circumstances, the automatic stay will remain in effect during the duration of your bankruptcy case. This automatic stay will be converted to a permanent injunction upon entry of a bankruptcy discharge. Unless the debt you owe is excepted from discharge, a creditors efforts to collect a discharged debt is illegal and a violation of Federal law.
Do you have a creditor that is attempting to collect a debt that was discharged in your bankruptcy case? Do you have a creditor that is negatively reporting to the credit reporting agencies regarding a debt that was included in your bankruptcy case? If so, we would like to speak with you to discuss your options.
Can bankruptcy help if a creditor is garnishing my wages or bank accounts?
If you failed to file bankruptcy to stop a lawsuit prior to receiving a wage garnishment or bank levy relating to judgment from a credit card company, loan company, medical provider, car company or debt collector, please rest assured that not all may be lost. In the majority of cases, filing a bankruptcy case will stop the wage or bank garnishment and it is possible that we may be able to recover some, if not all the money that has been taken from your pay check or bank account.
To discuss your case and see which options you might have, contact the bankruptcy attorneys at Allums Welsch. We’re located in downtown Bessemer. Since 2001, our attorneys have helped Alabama residents free themselves from debt and get a fresh financial start. Contact our friendly, courteous office staff to schedule a free initial consultation.
