By Stephen Behrends, Jan 11 2017 02:53PM
This is the first in a series I am calling “The Big Questions.” These are the things that I usually discuss first and worry about the most when I talk to someone for the first time about bankruptcy.
These urgent problems include getting legal paperwork like a summons and complaint. This called being served with a lawsuit or small claims case. This can include personal delivery to you or someone at your home. The paperwork usually gives you a deadline to “appear” in the case which really just means that you have to file your own paperwork or the debt collector will win a judgment automatically. Being served with paperwork is an urgent problem because it means that the collection agency is quickly going to get a judgment and be able to garnish your bank account or wages.
A judgment against you or a garnishment on your wages or bank account is an immediate concern. If you find out that there is a judgment, you should withdraw your money from your bank accounts to make sure that the bill collector who has it can’t get it first. If you file bankruptcy, it would stop further garnishment.
If a creditor has already seized your bank account or wages, you should talk to a bankruptcy attorney right away because you may be able to get some or all of the garnished money back if you file a bankruptcy case soon enough. Typically, our clients can get back funds that were garnished from their wages or bank accounts within the 90 days before they filed a bankruptcy, if the creditor received, in that 90 day period, a total of at least $600.00.
There can also be problems if you owe money to your bank. Even if the funds were, for example, social security or unemployment compensation that would be protected if other, outside creditors, tried to garnish them, your own bank could take them or freeze your account if you missed a payment or if you told your bank you were thinking of filing bankruptcy. If you aren’t going to be able to make the payments to your bank, you should open an account at a bank where you don’t owe any money. This is especially important if you end up having to file bankruptcy.
I will cover more of the urgent, immediate concerns in part 2 of “the Big Questions- Urgent Problems” which will be posted soon.