If you have received notice of a creditor seeking a money judgment, you’ll want to know what it is, as well as understand what you need to do next. As always, it’s advised that you work with a phoenix chapter 7 bankruptcy lawyer that can help you work through any potential legal actions that might be take against you because of debt.
What is a Money Judgment?
A money judgment is a decision issued by the court stating that a creditor has won a lawsuit and is entitled to a certain amount of money. In this case, the creditor would be entitled to the money that a debtor owes them. But before a judgment can even be issued, a lawsuit must be filed against a debtor. This means that creditor will take the debtor to court. If the debtor does not respond to the summons to court, then the court will issue a judgment in favor of the creditor looking to collect. The judgment is then filed with the court, and thus becomes part of public record.
The judgment is considered a lien against any property the debtor owns and also appears on his or her credit report. When a judgment is issued against a debtor, the creditor can satisfy its judgment by freezing the debtor’s bank account and also garnishing wages.
What To Do
When a debtor receives a copy of the judgment, his or her first step will be to gain an understanding of the amount of money that the creditor is entitled to as well as what each portion represents. It’s not uncommon for a judge to knock off some of the due amount in response to a defense or counterclaim that a debtor has filed.
A money judgment usually consists of the following:
The debt. This is the amount of money the debtor has either borrowed from the creditor, charged on a line of credit, or what is deficient on the loan.
Interest. A judgment usually includes the interest a creditor is entitled to under the loan agreement or contract. Additionally, interest can be tacked on from the time the judgment was entered into the court clerk’s record until the time a debtor is able to pay in full.
Court costs. Typically each state “awards” the winner of a lawsuit the costs incurred in bringing the case, including filing fees, service costs, discovery costs, and jury fees. This means that if you have lost the case, you will need to pay for the court related fees.
Any attorneys’ fees. If the original contract with the creditor includes the creditor’s right to collect attorneys’ fees in the event the creditor sues a debtor and wins, these fees are added to the judgment. This can be a hard hit, as sometimes these fees can add up to thousands of dollars.
A money judgment can be a difficult thing to fight. That’s why it’s always advised that you work with a phoenix chapter 7 bankruptcy lawyer that can help you get a handle on your debt before a creditor takes a judgment on you.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix chapter 7 bankruptcy lawyer that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
AZBK Lawyers 668 N. 44th St., Ste 320, Phoenix, AZ 85008 (602) 648-3274