Judgments  

I’ve received a “summons and complaint” – what does this mean?

• If you’ve received a summons and complaint, that is the commencement of a lawsuit.

• A summons and complaint requires you to prepare and serve an "answer" on the creditor or their attorney - if you do not prepare and serve an answer to the complaint, you are agreeing to the contentions in the lawsuit. You should answer the lawsuit if you have a defense, or if you want to buy yourself some more time to consider your options.

• Keep in mind that the law limits the number of days you have to file your answer. If you’re concerned about what to do, consider contacting an attorney to review your options.

What happens if I do nothing?

• If you don’t file an answer, the party that brought the suit (the plaintiff) can ask the court to enter a judgment for the amount that party asked for in the complaint.

• Once a judgment is entered against you, the plaintiff can obtain a lien on your assets, levy your bank accounts, or garnish your wages.

• You can still negotiate with the creditor once a judgment is obtained against you.

Do I have to file for bankruptcy before my creditor gets a judgment?

• No, you do not need to file for bankruptcy before your creditor gets a judgment.

• Keep in mind that it takes weeks or even months from the date you received your summons and complaint (date of service) until the creditor has a judgment they can actually enforce against you.

• Generally speaking, a debt that is reduced to a judgment is just as dischargeable as the same debt prior to the entry of judgment. There are certain considerations to keep in mind:

  1. A judgment lien that attaches to your assets is generally only avoidable if it impairs one of your exemptions.

  2. If the complaint alleged fraud or other grounds that would make the debt non-dischargeable in bankruptcy, the entry of a judgment against you may prevent you from later contesting that issue – in other words, you may be unable to discharge that debt in the bankruptcy.