Sometimes individuals may be unaware that there is a judgment out against them. In fact, this can go on for years. Eventually, they do discover the issue. Most will receive a letter or some other form of contact from an attorney advising them that they have a judgment against them. If the judgment has been in place for years, the debt is obviously old. Some believe the “age” of the debt/judgment may provide them with some safety, of sorts. They hope that it comes with an expiration date that will give them a “pass.” This is not true. If you are in receipt of a letter from an attorney advising you of a judgment in place against you…your wages, your bank account and even your property are currently at risk.
For instance, consider Evan. He’s a man in California who was informed by an attorney that he had a judgment against him from 2007 (for old credit card debt). In the state of California, judgments from credit card debt have a ten-year validity time frame. After those ten years, an attorney could, with little trouble, renew the judgment and regain its validity. Conjointly, the balance compounds by a fixed rate of 10% interest with every passing year the judgment goes untouched. Evan threw his letter away and did not make any response to the notification at all. As a result, Evan’s wages were garnished.
In this type of case, the debtor’s wages have the possibility of being garnished. Albeit, the collection attorney would have to acquire a court order for this to happen, but an experienced attorney could achieve this in 45 days or less. The debtor’s employers could start garnishing their wages after the court order is in action.
Individuals in this situation also have to consider the potential ramifications on their professional reputation. Financially distressed employees are worrisome to employers, to say the least. They tend to be preoccupied with their troubles and their work ethic declines. Law enforcement is especially wary of financially distressed employees because there have been connections made between financially troubled enforcement officers and an increased inclination to accept bribes to settle misdemeanors.
This belief leaves administration fearful of those enduring financial distress and poses a significant risk to job stability. And while garnishment isn’t a valid reason to let someone go from his or her employment, another perfectly valid and rather convenient reason could be conjured up easily that serve as a justifiable reason for termination.
The best option for a debtor put in this position would be to pay off the debt. Paying off the balance is the most efficient method of eliminating the problem. It also has the added benefit of improving the debtor’s credit. Sadly, most in this position are not in the financial position to do pay off this the debt or they wouldn’t be facing a judgment in the first place.
In that case, filing for bankruptcy might be the ideal solution. Filing for bankruptcy would effectively eradicate the judgment and the balance. An alternative to bankruptcy would be to settle the account with a short-term repayment of the settlement or a lump sum payment by dealing directly with the creditor.
If you discover that you have a judgment out against you for an old debt and you aren’t sure what to do – take some time to consider your options before you proceed. But whatever you decide, do not wait complacently for the day of judgment to come and whisk you down to a figurative financial hell. That’s no way to go about solving the problem. Be proactive. Take the necessary steps to properly resolve the issue and prevent it from growing.
If you have any additional questions regarding bankruptcy, the bankruptcy process or how to file bankruptcy in California, please get in touch with one of the experienced bankruptcy lawyers at Westgate Law.