How do they affect you?
What can you do to get rid of them?
How much to they really cost you?
You owe a creditor some money! You can’t pay! You just don’t have the cash and there is nothing left in your budget. You tell the creditors, but they just want their money! This is how it usually starts out. You have every intention of paying your bills, but you just can’t for one reason, or another. At this point creditors really do not have a lot of power: They can call you and say mean things on the phone and they can send you nasty letters. The creditor decides to take its debt collection process a step further and starts a lawsuit against you. In most cases, there is nothing to defend. You know you owe the money. The bottom line is the creditor gets a judgment against you, whether you realize it or not. They get the judgment for the amount of the debt and in many cases attorney fees and costs. Once the creditor has a judgment they can garnish wages, they can levy bank accounts, they can put liens on property, and they can go after personal property.
When a creditor garnishes your wages they take 25% of your income over and over again until the entire judgment is satisfied. This often leaves you without enough money to pay your rent, make your car payment, pay your utilities, or even feed your kids. And, the creditor does not care! The garnishment will continue until the debt is paid in full or until there is an order in place to force them to stop it.
Assume in this example that a Creditor has a judgment against you for $2,000.00. He can take the money out of your checking account. Imagine it’s payday and you have just put your paycheck in your checking account. It was $800.00 and let’s say the creditor knows where you bank and has already requested that the bank collect any money that gets deposited into your accounts. The $800 would be gone! If you have any money in a savings account, it will also be gone. A bank levy is where money it taken directly out of your bank account. They do not take just a little bit, they take all of it!! They will do it over and over again until the debt is paid in full. They will do this as many times as they need to until the debt is paid. In this example, it would be $2,000. Of course, every time they levy your account you’ll likely bounce checks and get bank fees, you also have no money to buy gas for your car to get to work. A creditor can continue to levy your account until their debt is paid in full or until there is a court order in place to force them to stop.
Lien on Real and Personal Property
The lien attaches to all real property that you own in the county where the lien is filed. A lien on real property is like having another mortgage, except you don’t have to make monthly payments on it. The lien is good for 10 years but it can be renewed, so even after 10 years it may still be on your property. If you decide to sell or refinance your property with a lien on it, the lien would have to be paid out of escrow. Also, the creditor may well be able to put your real property up for sale at public auction. This would be a tough way to lose your home. To make things worse, the judgment gets bigger and bigger because the creditor has a right to interest as long as the judgment is left unpaid. Then, adding insult to injury, the creditor can also come after other things you own, like your car, household goods, money in the bank, tools, equipment, etc. But first, most creditors must give you a right to claim certain “exemptions” (at least in California). Exemptions are categories of property that, up to certain limits, the creditor cannot take, but only if you claim them. If you are like most people, by the time you need to claim these exemptions, you are so dazed and confused and used to ignoring everything, you don’t even fill out the paperwork to claim your exemptions. That’s not good at all, because not doing so gives the creditor the right to come after almost everything you have, except for money in retirement accounts (other than IRA’s), depending upon the laws of the State in which you live. The judgment also goes on your credit report and that means no more credit in most cases. It also has some negative effects when you’re working a job with a security clearance. It’s embarrassing! It’s also something that can be taken care of using Federal Bankruptcy Laws!
Stop getting pushed around, feeling angry and losing sleep!
You can stop these negative affects of judgments fast!
Every thing you think is hopeless has a solution….if you ask the right person!
The Law Offices of John C. Kyle can give you straight answers to tough questions. They can also start the process to take that monkey off your back on the first visit!