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How Bankruptcy Can Help if You Received a Judgment from a Creditor

Posted By Allmand Law Firm, PLLC || 17-Jan-2014

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What happens when a creditor has a judgment against you? Some debtors make the mistake of ignoring the summons and experience a rude awakening when their wages or their bank account gets garnished. You have a certain amount of time to answer the judgment before further legal action is taken against you. If you fail to do anything you may be giving the creditor more of an advantage to collect non-exempt property from you including cash in your bank account.

Some states may not allow creditors to garnish wages, but they may have the option of garnishing your bank account. In Texas, creditors may look to garnish bank accounts, even if you have just a few bucks in the account. If the creditor obtains legal permission from the court they may continue to tap into the account until the judgment is satisfied.

Debtors have the option of opening another bank account to keep their funds in, but creditors can eventually learn about this account. In some states, such as Texas, creditors can act on their judgment for at least 10 years and renew it afterwards if you do change your account. Meaning, if you get a new bank account to try and avoid a garnishment, the creditor may still learn about it later through further legal proceedings.

If you are unable to work out a repayment schedule with your creditor or think you are in a position that makes it impossible for you to pay what is owed, you may want to review your options with a Dallas / Fort Worth bankruptcy lawyer. The judgment may be eligible for discharge.


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