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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
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Experience:  Licensed to Practice Law
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I recieved court papers filed by my creditor for a ...

Customer Question

I recieved court papers filed by my creditor for a unsecured loan, to seek judgement against me and I''m worried to death about it, what is the legal process and does it have the same result on my credit report as if I filed bankruptcy, I''m considering this option also.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 5 years ago.

Hello and thank you for allowing me to address your legal question.

If you have been served with a Summons and Complaint, then you have been sued. After being served you have roughly 30 days (depending on jurisdiction) to file an Answer. An Answer addresses the allegations in the Complaint. For example, the Complaint may state something like:

(1) Defendant signed an agreement to pay $5000 in monthly installments of $500.

(2) Defendant has defaulted on the aforementioned agreement and is in arrears in the amount of $1500.

Your Answer must address the allegations like so:

(1) Count 1 of the Complaint if hereby admitted.

(2) Count 2 of the Complaint is hereby denied.

If you do not file a timely Answer, then the Plaintiff will win by default. In other words, the judge will treat your failure to file an Answer as an admission of the entire Complaint, and he will award a judgment in favor of the Plaintiff. If you file an Answer and deny various allegations, then a trial will be scheduled and the Plaintiff will need to prove the allegations in the Complaint.

If a judgment is awarded against you, your credit report/score will be negatively affected. However, the affect will not be as bad as a bankruptcy (a bankruptcy is the worst thing you can do to your credit). However, the Plaintiff will be able to attempt to collect on the judgment by doing things such as garnishing your wages and bank accounts, or placing a lien on your property and selling it. This is dependent on state law, so some methods of collection may not apply to you (for example, in Pennsylvania and North Carolina, wages cannot normally be garnished).

If the information that I provided was helpful, please remember to ACCEPT my post as that is the only way I will receive credit and compensation for my answer. Thank you and good luck!

DISCLAIMER: Please understand that the complexities of most legal problems cannot be sufficiently addressed in this setting. Accordingly, my post is intended as general information only, and should neither be construed as specific legal advice, nor as an adequate substitute for the retention of legal counsel.

TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 9610
Experience: Licensed to Practice Law
TJ, Esq. and 4 other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
Reply to BoredAtty's Post: can a lien be placed on a debt that is unsecured and can they garnish my wages all in this one hearing, is a payment plan negotiable at all ? Can I file bankruptcy to stop this ?
Expert:  TJ, Esq. replied 5 years ago.
"can a lien be placed on a debt that is unsecured"

A judgment acts as a lien on real property, so the answer is yes, a lien can be placed on your property even if the debt was unsecured (assuming the property is not exempt).

and can they garnish my wages all in this one hearing, is a payment plan negotiable at all ?


There will have to be a trial to determine your liability. That will presumably result in a judgment. The creditor will then have to file paperwork with the court and ask that your wages be garnished (assuming they can be garnished - again, it's state specific). That is separate from the trial, so it won't be done all at once. When the judge orders that your wages be garnished, the court will send the order to your employer. So, it will take a few weeks after the judgment before your wages can be garnished. You can certainly offer to set up a payment plan, but the creditor is not obligated to accept the plan.

Can I file bankruptcy to stop this ?

Yes, a bankruptcy would stop the entire lawsuit. Keep in mind your credit score would take a big hit, and your non-exempt assets would be liquidated to pay off your creditors.

If you have other questions, please let me know. I hope I've been of help. Please remember to accept my post. Thank you.
Customer: replied 5 years ago.
Reply to BoredAtty's Post: What happens if it is proven that I can't afford to pay their monthly amount as opposed to what I can afford?
Expert:  TJ, Esq. replied 5 years ago.
What happens if it is proven that I can't afford to pay their monthly amount as opposed to what I can afford?

I'm not sure what you mean by "their monthly amount." Are you asking what would happen if you can't afford to pay the monthly amount that they demand in place of garnishing your wages? If so, then I doubt they would demand anything more than what they could get by garnishing your wages since there would be no incentive for you to pay it.

But the botXXXXX XXXXXne is that you don't have to pay anything. You can simply refuse to pay, and force the creditor to do something like garnish your wages. If the creditor garnishes your wages, then generally speaking he cannot garnish more than 25% of your earnings (depending on your state). Unfortunately, if you can't afford to lose the amount that the court orders to be garnished, then you're out of luck. With regard to that, you simply have no choice.

I hope I've helped. Please remember to accept my post or I will not be compensated. Thank you.
Customer: replied 5 years ago.
Reply to BoredAtty's Post: Ultimately, I'm not trying to refuse to pay my debt of 10,500. I would rather work something out with my creditor, my fear is them taking me to court and the judge allows them to ask for an amount that I know I can't afford to make. For example 271.00 was my monthly account,I can afford 100 to 150.00 a month. If I understand you correctly, a JUDGEMENT is a public record, that forces you to pay ,otherwise, act as a lien on property in the state of Georgia. Isn't that as bad as filing chapter 7 ? What are my rights with respect to a judgement entered against me. It sounds like a judgement gives the creditor a green light to making my life miserable.
Expert:  TJ, Esq. replied 5 years ago.

If I understand you correctly, a JUDGEMENT is a public record, that forces you to pay ,otherwise, act as a lien on property in the state of Georgia. Isn't that as bad as filing chapter 7 ?

No, it's not as bad as a bankruptcy. A judgment says that you haven't paid one debt. A bankruptcy says that you haven't paid any debts, and that you're never going to pay them.

my fear is them taking me to court and the judge allows them to ask for an amount that I know I can't afford to make.

What are my rights with respect to a judgement entered against me. It sounds like a judgement gives the creditor a green light to making my life miserable.


Unfortunately, it is true that a judgment creditor can make your life miserable. He is entitled to go after any of your property (including money) that is not exempt under Georgia law. In Georgia, unless you are living on minimum wage (or close to it), then 75% of your disposable income (i.e. income that is not deducted by law, like taxes) is exempt. That means 25% of your disposable income is not exempt, and that is the amount that can be garnished (you can see exemptions for other property HERE – for example, $5000 of your homestead is exempt). Here is the specific Georgia law dealing with garnishments:

§ 18-4-20. Property subject to garnishment generally; claim amount and defendant's social security number on summons; information to be contained on summons of garnishment upon financial institution

(a) As used in this Code section, the term:

(1) "Disposable earnings" means that part of the earnings of an individual remaining after the deduction from those earnings of the amounts required by law to be withheld.

(2) "Earnings" means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program.

(b) All debts owed by the garnishee to the defendant at the time of service of the summons of garnishment upon the garnishee and all debts accruing from the garnishee to the defendant from the date of service to the date of the garnishee's answer shall be subject to process of garnishment; and no payment made by the garnishee to the defendant or to his order, or by any arrangement between the defendant and the garnishee, after the date of the service of the summons of garnishment upon the garnishee, shall defeat the lien of such garnishment.

(c) All property, money, or effects of the defendant in the possession or control of the garnishee at the time of service of the summons of garnishment upon the garnishee or coming into the possession or control of the garnishee at any time from the date of service of the summons of garnishment upon the garnishee to the date of the garnishee's answer shall be subject to process of garnishment except, in the case of collateral securities in the hands of a creditor, such securities shall not be subject to garnishment so long as there is an amount owed on the debt for which the securities were given as collateral.

(d) (1) Notwithstanding subsection (a) of this Code section, the maximum part of the aggregate disposable earnings of an individual for any work week which is subject to garnishment may not exceed the lesser of:

(A) Twenty-five percent of his disposable earnings for that week; or

(B) The amount by which his disposable earnings for that week exceed 30 times the federal minimum hourly wage prescribed by Section 6(a)(1) of the Fair Labor Standards Act of 1938, U.S.C. Title 29, Section 206(a)(1), in effect at the time the earnings are payable.

(2) In case of earnings for a period other than a week, a multiple of the federal minimum hourly wage equivalent in effect to that set forth in subparagraph (B) of paragraph (1) of this subsection shall be used.

(e) The limitation on garnishment set forth in subsection (d) of this Code section shall apply although the garnishee may receive a summons of garnishment in more than one garnishment case naming the same defendant unless the garnishee has received a summons of garnishment based on a judgment for alimony or the support of a dependent, in which case the limitation on garnishment set forth in subsection (f) of this Code section shall apply although the garnishee may receive a summons of garnishment in more than one garnishment case naming the same defendant. No garnishee shall withhold from the disposable earnings of the defendant any sum greater than the amount prescribed by subsection (d) or subsection (f) of this Code section, as applicable, regardless of the number of summonses served upon the garnishee.

Unfortunately, even if 25% of your disposable income is more than the $150 that you can afford, you will not have much choice in the matter because of the law I quoted above. Judgments can certainly bring harsh results. Hopefully you can avoid a judgment by settling with the creditor. I really wish I had better news for you, and I truly wish you good luck. Have I answered all of your questions? If so, then please remember to accept my post. Thank you.

Customer: replied 5 years ago.
I'm leaning more towards filing chapter 7 instead of allowing a judement to take my paycheck away from me, at least I'll be debt free. Thanks for all your help.
Expert:  TJ, Esq. replied 5 years ago.
Whichever way you choose to go, good luck and thank you for using Just Answer. Smile

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