What Is a Judgment?

Bankruptcy Can Stop Collection Actions

If you have been struggling with debt but have not filed bankruptcy, you may find that a creditor has filed a lawsuit against you. If the court issues a judgment in favor of the creditor, you are at risk for wage garnishment and/or levies of your finances and property. Filing bankruptcy can put a stop to these collection activities, even if the creditor has already begun garnishment or levies.

You will need assistance from an experienced bankruptcy lawyer to fight a judgment. Prescott Pearson & Tande, PA, has provided bankruptcy representation to people and businesses in Minnesota for more than 40 years. In that time, we have helped more than 70,000 clients in bankruptcy and debt matters involving garnishments, repossessions and lawsuits involving credit.

We understand your concerns and will work quickly to prevent further losses.

What Can a Creditor Do With a Judgment?

A judgment is entered after a summons and complaint is issued if the debtor does not respond. An answer can be entered by the debtor if there is a valid defense. If a judgment is entered, creditors are allowed to take legal collection actions against the debtor to recover their losses. Judgments typically will allow creditors to:

  • Garnish your wages for up to 25 percent of your take-home pay
  • Levy your bank account
  • Levy your nonexempt assets (boat, motorcycle, second home, nonhomestead property such as a cabin)

A levy is the seizure of your nonexempt assets, which may include financial assets, personal property and real property. A creditor may sell personal and real property after seizing it.

Filing bankruptcy will stop a judgment because of the protection of the automatic stay. In many cases, it will not return any money you have already lost to the judgment. However, if more than $600 was taken within 90 days prior to filing bankruptcy, a demand may be made for the return of the funds as an avoidable preference. It is important to speak with an attorney as soon as you think you are in danger of your assets being levied.

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Call for a Free Consultation Today

  • Minneapolis-St. Paul Area: 651-968-8096
  • Minnesota Toll Free: 888-366-0827

Please call us at the numbers above or contact us online to schedule a consultation.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.