First, let me tell you a little bit about Nickie. In one word – Wow! She is an extremely impressive, hardworking, mother. She works three jobs and has a teenage daughter at home. Can you imagine having to work three jobs, raise a teenager by yourself, and still pay off your debts?! Yikes! Despite Nickie’s tenacity, she fell victim to overwhelming debt. She made every effort to pay off her debts, but finally reached “the point”. If you reach “the point” when it comes to your debt, you’ll know exactly what I’m referring to. Nickie started receiving court summons in the mail that eventually turned into judgments. As she knows, the next step is wage/bank garnishment. Once that happens, the creditors will start taking up to 25% of her paychecks. Our MN Bankruptcy Attorneys simply could not let this happen.
What Is A judgment
Briefly, we’ll take a departure from Nickie’s story and explain what a judgment actually is. A judgment is a court decision explaining the rights/responsibilities of parties involved with a lawsuit after a judge has made a decision based on the fact. The process of obtaining a judgment starts with an individual falling behind on their debts. Once someone becomes delinquent on their debts, a creditor will attempt to collect. When those attempts fail, the debt is turned over to a collection agency. The collection agency will attempt to collect on the debt. When the collection agency fails to collect, the debt is turned over to a law firm that specializes in debt collection. The law firm will then file a lawsuit against the person who owes the debt. The individual will receive a summons in the mail and be provided an opportunity to respond to the summons. Absent extenuating circumstances, the individual’s response carries little weight. A judge will then review the facts of the case. If the judge determines the individual is responsible for paying the debt, he or she will enter a judgment in favor of the creditor law firm and authorize wage/bank garnishment.
Nickie's Financial Situation
Nickie’s situation is a little unique. She has a house with a lot of equity in it. In other words, her house is worth a lot more than what she owes on it. In most circumstances, having equity in your house is a good thing. When it comes to bankruptcy, there are a few things we have to make sure we keep in mind so that clients like Nickie can keep their house. Luckily for her, here in Minnesota we can protect her house by using Federal or State bankruptcy exemptions. Federal exemptions will only protect the equity in her house up to $23,675. Well, Nickie has more equity then that, so we needed to look at Minnesota exemptions. In Minnesota, with a few exceptions, we can protect up to $390,000 of equity in her house. So, that’s what we did. Nickie losing her house was simply not an issue.
Now that we found a way to protect Nickie’s house, the next step was to find a way to protect her from liability on the judgments that were entered against her. Absent paying off the underlying debt, there are few options for removing liability on a judgment. Bankruptcy, in most cases, is the best option. Whether we file a chapter 7 or chapter 13 bankruptcy, Nickie’s responsibility to pay off the debt associated with the judgments in her case is discharged. Besides Nickie’s house, there were not a lot of other assets we were concerned about needing to protect. So, Nickie and I agreed to file a chapter 7 bankruptcy.
How Chapter 7 Bankruptcy Helped Nickie
Chapter 7 bankruptcy is a great option for people in pursuit of getting their life back. The entire process takes roughly 4-6 months. The best part – as soon as the case is filed, our clients get the relief they need from their creditors. There are quite a few steps in the process, but our MN Bankruptcy Attorneys handle the heavy lifting. Our goal is to make sure every one of our clients is treated the way they deserve to be and get the resolution they need.
Once Nickie’s case was filed, she no longer had to worry about the potential for garnishments. However, even though her liability on the judgments no longer existed, the judgments will still show up on her record after the case has been finalized. This is very common and nothing to be concerned about. There are steps that must be taken to remove the judgments from her record, but we plan on working together to get that taken care of.
Why Nickie Contacted The MN Bankruptcy Attorneys At Kain & Scott
Nickie sought the help of our MN Bankruptcy Attorneys because of the financial hit she expected to take after receiving notice of pending judgments. She realized her debt was not going away and there was no way she could support her family if her pay checks started to get garnished. She reached out to our MN Bankruptcy Attorneys to discuss her options. We discussed her options and put together a plan of attack to solve the issue she was confronted with. During the entire process, Nickie was very involved with asking questions and accomplishing anything we asked of her. We were able to get her case filed in as little as one week.
Moving forward, there’s no doubt Nickie will reap the benefits bankruptcy has to offer. She’s hard working and motivated. Because of her desire to break free from her overwhelming debt, her courage to reach out to a MN Bankruptcy Attorney, and motivation to achieve financial freedom, she is well on her way to getting her life back!
