So you are at home and suddenly the mail comes. It says the debt collector has a judgment against you. You know you have been working on paying them, but you just couldn’t. Maybe you even ignored it but now it seems like the worst thing has happened. They say they have a judgment against you! Is it Midland Credit Management, LVNV, American Express? Is it a J.P. Morgan Chase lawsuit, Capital One?
The ultimate motivation behind a creditor filing a debt collection lawsuit is to obtain a judgment against you, as the borrower. The judgment is the official result from that lawsuit. It is what allows the lender to garnish your wages or find other ways to receive payment on the loan. Before we continue JUST KNOW – it is not too late to be able to still wipe it out in a bankruptcy. You are still good!
Once a judgment is entered, the creditor goes from just being a creditor to being what is called a “judgment creditor.” You also go from being the borrower to being the “judgment debtor.”
Judgments are not automatic. A process must first be followed before the court will issue a judgment in favor of or against you. A complaint is normally filed once you have failed to make payment on a debt for at least six months. Since court cases cost the lender money, they normally will try to contact you directly to receive payment before filing a lawsuit.
Once the lender files a collections case, you will receive notice in the form of a legal complaint. Whatever you do, do not ignore that complaint. Inaction or delay can cause a default judgment to be entered against you. A default judgment can involve a lien against you, repossession, or a garnishment order being issued.
Judgments are not always issued solely by the court. Whenever someone sues you for collection on a debt you owe, it is often best to work with the other party to settle the dispute. If a settlement is reached, that settlement will be incorporated as part of the judgment issued. If you do not feel comfortable working directly with the creditor on an agreement, an experienced attorney can help you work out an affordable settlement before a judgment is entered.
Once a judgment is issued, if you do not follow the terms of the judgment, the creditor is then able to return to court and request a judgment execution order. These types of orders can include wage garnishment, and repossession.
Keep in mind, if your net income, after deductions, is less than $750 a week your wages cannot be garnished. If it is more than that, your wages can only be garnished on the amount that exceeds $750, and only if you sign a written waiver agreeing to the garnishment. Let me explain though: they can still and will garnish your wages. It is on you to file a Claim for Exemption from Garnishment with the Court to set it for a hearing to explain to the Judge you should be protected from garnishment. It is not automatic.
For those who do not qualify as a head of family or have not signed the waiver, garnishments are limited to 25 percent of net income. Florida’s Wage Exemption Statute provides broad protections for current income and accumulated savings, but it also contains certain important limitations. Because of the complexity of Florida’s garnishment and wage exemption laws, you should contact the Benenati Law Firm and speak with one of our attorneys who have personal experience with Florida bankruptcy laws.
What we do is determine what is in your best interest. Should we try to settle the debt or often, if there are other debts, we need to consider filing bankruptcy to press the Restart Button on your life. It is something I personally did in 2008, and I can really empathize with my clients and what they are going through.