Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
You say that you have been served with a summons, demanding payment "or they will sue" you. This is not quite correct. They have sued you, and if you fail to file an answer within the required period, they will obtain a default judgment against you. If they obtain a judgment they will be able to take your "non exempt" property and sell it until the judgment has been satisfied (paid).
The court will not "force you" to pay the judgment, it will allow the judgment creditor to execute (sieze your property). You have certain exemption rights. These exemptions normally (depending on what state you are in) include your "homestead" (your home, sometimes to a certain value), a certain portion of your salary, and other catergories of property. If the property they consider executing upon is exempt they cannot touch it.
Yes, bankruptcy protection extends to credit card debt. In a Chapter 7 bankruptcy, if your assets can all be included in exempt categories, you are "discharged" from your dischargeable debts (usually including credit cards). This means that the creditor cannot take measures to collect these debts (including suing you). In the mean time, when you file bankruptcy the creditors are stayed from attempting to collect these debts, while the bankruptcy is pending. Holders of secured debts are entitled to their collateral and can take that collateral if they obtain "relief from the automatic stay provision.
Another form of bankruptcy is "chapter 13", in which you agree to pay a portion of your unsecured debt over a period of time.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).