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SPECIAL FEATURE: What Happens When You Lose a Debt Lawsuit?

Posted By admin || 10-Apr-2012

What Happens When You Lose a Debt Lawsuit?

A credit card company or creditor may sue when payments on an account are no longer being paid.  Winning a lawsuit against a credit card company or creditor may seem slim if evidence is provided to the judge showing you owe the credit card debt .  While losing a suit isn't the end of the world, if you ignore a summons received, it may present additional financial problems.

When you lose a lawsuit, a judgment is awarded to the creditor or plaintiff.  At this point, the creditor will look for payment.  Paying off the judgment may include the creditor moving forward with additional legal action.  You may decide to work with the creditor in paying what is owed to avoid garnishments and levies.

A wage garnishment may be placed against your wages if the creditor is awarded a judgment.  The action allows creditors to obtain a certain percentage of your paycheck until the debt is paid in full.  Some states, such as Texas, may not allow for garnishment of wages for unsecured debt.  In states where the action is allowed, your employer withholds a certain amount of funds from each paycheck and it is forwarded to the creditor to be applied toward outstanding debt.

A bank levy, also known as a bank seizure is another way creditors seek payment after winning a court judgment.  Once a levy is in place you lose access to funds in the account.  This may affect funds that are directly deposited into the account.  Some states may not allow for this action.  Questions or concerns can be discussed with a legal expert.

Categories: Lawsuits
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