Receiving a Summons and Complaint from a creditor, or being threatened with a judgment can be scary, but what does it really mean for you financially? This is a question that a lot of potential clients have when we first meet. Please read on to find out more!
Wage Garnishment
In Minnesota, when a creditor gets a judgment against you, they are immediately empowered with the ability to get funds directly from your employer through a process called wage garnishment. Once a creditor finds out where you are employed, they will send a Notice of Intent to Garnish Wages to you along with an exemption form that you can fill out if you are protected from garnishment for any reason (i.e. you have recently been on assistance, or have recently been receiving unemployment, etc.). If you are protected from garnishment, you should fill out and return the form to buy yourself some time. However, if you are not, the next thing the creditor will do is send a Garnishment Summons to your employer. Fourteen days after receiving that notice, your employer MUST begin garnishing your wages. Through the wage garnishment process, the creditor will receive 25% of each check until the debt is paid in full, with interest. Once a wage garnishment starts, there are only three ways to stop it: 1) contact the creditor and pay/settle the debt; 2) the debt is satisfied through the garnishment, or 3) filing bankruptcy.
Selling/Buying Real Estate
When a judgment is filed with the county recorder’s office, it becomes a lien against any property that you own in that county. Although the creditor cannot use the lien to foreclose on the property, the lien will need to be addressed before the property can be sold. In some cases, having a judgment against you will also prevent you from buying real estate. Once a judgment lien is recorded, there are only two ways to move forward: 1) pay the underlying debt; or 2) file bankruptcy and get the underlying judgment discharged. Then, once the bankruptcy discharge is entered, our Credit Repair Specialist will help you discharge the judgment in state court, so the lien can be removed and the property can be sold. Judgment liens are the most common thing that we see that will derail the sale of a home.
CALL NOW FOR A FREE STRATEGY SESSION FROM A MN BANKRUPTCY LAWYER AT LIFEBACK LAW FIRM
If you are facing a judgment and would like advice, please reach out and let us help you. It is definitely beneficial to file for bankruptcy prior to the judgment being entered, so timing is key. If a judgment has already been entered, do not worry, we can still help, but there will just be an added step or two along the way! When you are ready to get your life back, reach out to Minnesota’s most kind and helpful bankruptcy law firm by going to www.lifebacklaw.com. You will be so thankful you did!
