Lawsuits and Garnishments- When a creditor has tried unsuccessfully to collect a debt the next step is a lawsuit. The creditor will file a lawsuit with the court in an effort to force you to appear under oath before a judge. If the creditor is granted an automatic “default judgment” it will later allow the Creditor to garnish 25% of your wages, seize money in your bank accounts and place a lien on your real estate.
Indiana Bankruptcy Attorney, Lloyd Koehler can protect your wages and your real estate. We can file a bankruptcy case TODAY and stop any further collection efforts.
STOP a lawsuit before the judgment or after the judgment.
STOP a lawsuit if you have a court date, you will not have to appear in court.
STOP a garnishment immediately, even if your paycheck is already being garnished.
STOP a bank account seizure even if your account is already frozen.
STOP a lien against your real estate.
Below is a list of terms which may assist you in understanding lawsuits and garnishments.
What is a plaintiff?
A plaintiff is the party who files the lawsuit. If a creditor or debt buyer files a lawsuit against you, the creditor or debt buyer is the plaintiff.
What is a defendant?
A defendant is the party who is sued by the plaintiff. If a creditor files a lawsuit against you, you are the defendant.
What is a summons?
A summons is your official notification that you have been sued. It tells you how and where to appear in order to defend the case. A summons is usually accompanied by a complaint. If you do not respond to the summons the creditor may be granted an automatic default judgment. Once the judgment is granted it will allow the creditor to garnish wages and bank accounts or lien your personal property.
What is a complaint?
A complaint explains why you have been sued. It contains the facts and the legal claims that are the basis for the lawsuit. In debt collection cases, the complaint is often very short and may provide very little information.
What is a judgment?
A judgment is an action rendered by the court against a debtor(s). The creditor may already have placed a lien against any real property the debtor owns, without the debtor having been informed. Other means of collecting a judgment can be wage garnishment, bank account levy, and the liquidation of other assets. Before any of this can be enforced, due process has to have been followed. A debtor/consumer should NEVER ignore a summons from the court. If one does not show up either in person or by legal counsel, the debtor automatically defaults. The creditor can then begin judgment collection procedures.
What is a judgment lien?
In a civil court case, after a judge or after a court-approved settlement — a judgment is entered by the court. As part of a typical judgment, the court orders the payment of money from one person to another. But the person who owes the money (the debtor) doesn’t always pay up. A judgment lien is one way to ensure that the person who won the judgment (the creditor) gets what he or she is owed. A judgment lien gives the creditor the right to be paid a certain amount of money from proceeds from the sale of the debtor’s property.
A judgment lien is created automatically on the debtor’s property if the property is located in the Indiana county where the judgment is handed down. For debtor property in another Indiana county, the creditor files a copy of the judgment with the circuit court clerk for that county.
A judgment lien in Indiana will remain attached to the debtor’s property (even if the property changes hands) for ten years.
Keep in mind: In Indiana, a creditor’s ability to collect under a judgment lien will be affected by a number of factors — including a fixed amount of value that won’t be touchable if the property is the debtor’s primary residence (called a homestead exemption), other liens that may be in place, and any foreclosure or bankruptcy proceedings.
What is a Proceedings Supplemental?
If you get a notice ordering you to appear at a Proceedings Supplemental (also called an “Order to Appear and Answer” or a “Proceedings Supplementary)” it means you were sued in court and the judge has already entered a judgment against you. Now the creditor wants to collect the money the court says you owe. If you do not know anything about the judgment, you can contact the court which entered the judgment to get more information. If a default judgment was entered against you, it is possible to ask the court to set aside the default judgment.
A Proceedings Supplemental is a court-ordered meeting between you and the judgment creditor (the person who got a judgment against you) to determine whether you have any way to pay the judgment. The judgment creditor will want to know about your income, savings and property. Your bank or employer may also have to give information to the creditor and the court. The purpose of a Proceedings Supplemental is to decide how you will pay the judgment. You can make arrangements to pay the creditor, your property can be sold, or your wages can be garnished unless you are judgment proof.
Do I have to go to the Proceedings Supplemental?
Yes. If you don’t go, you may be found in contempt of court and a “body attachment” (like an arrest warrant) can be issued. You could then be arrested and put in jail until another court date is set. If you miss a Proceedings Supplemental hearing, you should contact the court and ask that another court date be set.
Also, you need to go to the hearing so you can answer questions regarding your income and property AND to tell the court what exemptions you are entitled to claim, so that your creditor cannot take those items.
What will happen during the Proceedings Supplemental?
The judgment creditor and/or the court will ask you questions about your income and what property you own. You may want to bring proof of your income, such as paycheck stubs, or proof of social security benefits you receive. Sometimes you will actually meet with the judgment creditor, and not go in front of the judge. You can try to work out a payment arrangement with the judgment creditor. Before you agree to make payments, you should make sure you understand what a judgment creditor can and cannot do to get his or her money. You do not have to make an agreement with the judgment creditor; you can ask to go before the judge.
Filing a bankruptcy case will stop lawsuits immediately while we work together to find a solution to extinguish your debts through bankruptcy. No money up front can get your case filed the same day when necessary.
STOP a lawsuit before the judgment or after the judgment.
STOP a lawsuit if you have a court date, you will not have to appear in court.
STOP a garnishment immediately, even if your paycheck is already being garnished.
STOP a bank account seizure even if your account is already frozen.
STOP lien against your real estate.
