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The request for entry of default is being made by the creditor to get an early judgment against you because it appears that you failed to file an answer. You need to consider filing a chapter 13 bankruptcy right away as it will freeze the two lawsuits right in their tracks. This is because as soon as a BK is filed an automatic stay goes into effect and the creditors will have to get permission from the BK judge to get the stay lifted.
Once the BK is filed, you will likely have 3-5 years to pay off arrears on the home and other secured debts. As for credit card debts, you may only have to pay cents on the dollar under the chapter 13 repayment plan.
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That's correct, if they get a entry of default, they can try to start collecting on it as soon as the default judgment is granted.
They can try to attach the judgment to freeze you bank accounts and to garnish your wages and also to take your non exempt assets. Under federal law, they can only garnish about 25% of your wages.
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