Stop Collection Lawsuits
Whether your family fell behind on credit card payments and couldn’t make them anymore or incurred massive medical expenses because of a car accident or illness, you could find yourself facing a lawsuit from your creditors, despite the nature of the debt or your current financial circumstances. In fact, even nonprofit hospitals can and will sue people who make minimum wage over unpaid medical debt.
Regardless of which creditor wants to take you to court, it’s important that you educate yourself about your rights. On this page, we’ve provided some information about how to respond to creditor legal actions. If you need additional assistance or want to learn more about whether bankruptcy may be a good option for debt relief, contact our lawyers at Wootton & Wootton for a free initial consultation.
Timely Action Is Critical If You Face A Creditor Lawsuit
Creditors often take action when they no longer have reason to believe that payment will be forthcoming in the near future. If you fail to take action shortly after receiving notice of the lawsuit, they may be able to secure a judgment against you, which could impact your credit and result in a garnishment of your wages.
Seeking bankruptcy protection before the lawsuit goes to court can be a way to avoid a judgment on your credit report and the potential embarrassment of such a lawsuit. That means that you may only have a few days or weeks in which to handle your initial application for bankruptcy.
Bankruptcy Can Stop The Lawsuit And Provide Other Benefits
Bankruptcy can give you immediate peace of mind and improve your quality of life by ending creditor harassment and collection activities. Provided that you successfully complete the bankruptcy process and receive a discharge, bankruptcy will also formally end your obligation to repay certain debts, thus freeing up your income for other payments, like your mortgage or rent.
Unsecured debts, such as medical debt and credit card debt, are eligible for discharge in Chapter 7 personal bankruptcy proceedings. However, priority debts, including tax debts, past-due child support and other important financial obligations, may not receive a discharge.
Secured debts, including your mortgage or vehicle loan, may require renegotiation or reaffirmation as part of the bankruptcy proceedings if you want to retain the collateral property. Most unsecured debts, with the exception of student loans, are typically eligible for discharge.
Find Immediate Relief From Creditor Actions With The Automatic Stay
Bankruptcy is designed to protect you – the consumer – from the burden of unpayable debts. It also gives you breathing room to sort out your debts and get rid of those that qualify.
A critical part of the process is the automatic stay. This court order, which goes into effect immediately after you file, prevents creditors from collecting on your debts. If you have been sued for a debt, the collection lawsuit will come to a halt. Likewise, your creditors cannot file any new collection lawsuits, nor can they enforce any judgments they obtained against you.
As a practical matter, bankruptcy gives you immediate protection from creditors. It shields you from all collection efforts. This protection will last the entire length of the bankruptcy proceedings. By that time, most or all of your debts will be discharged or repaid over time, depending on the bankruptcy option you choose.
Let Us Help – Free Initial Consultation, Flat Fees And No Cost Until Filing
If you’re facing collection lawsuits, repossession, wage garnishment or the countless other stresses that go along with out-of-control debt, you owe it to yourself to explore what bankruptcy can do for you. At Wootton & Wootton, our attorneys will sit down with you and walk you through the pros and cons.
With offices in Durham and Henderson, North Carolina, we have a long history of success in helping everyday people get out of debt. We’re passionate about helping people like you become debt-free.
Learn more by calling 919-794-8660, texting us at 919-382-3065 or contacting us online to set up your free, no-obligation consultation with one of our lawyers. Consultations are available in person, over the phone or through video conferencing.
Wootton & Wootton is a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code.