Defending Debt Collection Suits
If you have been sued, but a final judgment has not been entered, you may respond to the suit and raise defenses provided you act in time. You may also be able to negotiate a settlement. Some creditors will even allow a settlement with a payment plan, but you usually save by paying a lump sum settlement. When a person is sued, he should immediately consult with an attorney to get help determining whether there are valid defenses to the suit. If there are solid defenses, a better settlement may be possible. The Consumer Financial Protection Bureau offers tips on negotiating a settlement with a debt collector as well as sample letters for responding.
Judgment Already Entered
If you already have a judgment against you that is impairing a valid homestead exemption, bankruptcy can usually be used to remove the judgment. This is called voiding the judgment. This does require an extra procedure called a Motion to Void Judgment Lien, but it is necessary to clear up the judgment so you can obtain your fresh start. If you can file bankruptcy before the judgment is entered, this may help your credit may improve faster following bankruptcy. In Texas, there is also a procedure for removing the judgment lien from the homestead outside of bankruptcy. If you have judgments against you, be sure to discuss them with your bankruptcy attorney who can advise you on whether the judgment is voidable. Sometimes, people are not sure if they have a judgment against them. In Gregg County, you may research the court records online.
Creditor’s Collection Options
Generally, the creditor has ten years from the date of the abstract of judgement to take enforcement action. Taking enforcement action, such as requesting a writ of execution by the sheriff may extend the time to collect the judgment.
Lawsuits and judgments are very serious. Consulting with a knowledgeable bankruptcy attorney as early as possible in the process is extremely important. Every situation is different. An attorney will be able to review your paperwork and suggest possible options.