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 the collection of debt in its tracks. That’s why debt collectors lie about it. (You probably should not take legal advice from people who are your opponents, right?) It doesn’t usually matter if the credit card has a judgment against you. We can stop those too.
Ultimately a judgment is important. In some cases, what the judge ruled on, in that case, will be fixed for good. So if a judge ruled you committed fraud, that may make it harder to get out of the debt through bankruptcy. (It depends on your jurisdiction.)
And 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.
Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg, and the Tampa Bay area.