At the time of this blog (October 2023) our country is in about $33 trillion worth of debt. Unlike the government, we can’t just print money when we want more of it! One of the most popular lawsuits we get at our firm are debt lawsuits. Whether you took out a loan that you couldn’t afford or had some type of financial hardship, it's not uncommon for debts to slip through the cracks. Ignoring a debt might seem like the easiest course of action (when you owe the money), but the consequences become much more severe when there’s a debt lawsuit.
Understanding the Situation:
Many of our clients wonder if I don't own anything, what can they take? The answer lies in your assets. If you don't have significant assets in your name, creditors won't be able to seize your property. However, this doesn't mean you're off the hook entirely as they can still get a wage garnishment or bank levy against you.
Wage Garnishment:
One route a creditor may take is garnishing your wages. This means a part of your paycheck is diverted directly to repay the debt. While this can be a significant financial inconvenience, it's a common legal recourse for creditors and they can take up to 25% of your wages.
Bank Levy:
Another frustrating that that creditors can do is get a ruling to levy your bank account. This involves freezing your account and taking funds to satisfy the debt. This is obviously a serious measure, so it's crucial to address the debt before it reaches this stage.
The Importance of Addressing Debt Lawsuits:
Ignoring a debt can seem like a temporary relief, but it's a short-sighted approach. A debt lawsuit is not something to brush aside. It's a legal matter that, if left unresolved, can have far-reaching consequences for your financial stability and creditworthiness. If you talk to your creditor early enough, there is a chance that they will work with you to avoid the lawsuit. However, if you see that you’re not getting anywhere with the creditor, and a debt lawsuit seems inevitable, we recommend consulting with an attorney immediately. By seeking legal advice promptly, an attorney will be able to help you understand your rights, potential defenses, and guide you through the legal process. With an attorneys help, it's often possible to get the case dismissed or negotiate a settlement with the creditor, potentially reducing the total amount owed. This is a more manageable way to address the debt.
While not owning significant assets may protect you from getting assets seized, it doesn't excuse you from your debt obligations. Wage garnishment and bank levies are common repercussions in debt lawsuits. Ignoring a debt lawsuit is one of the worst things you can do for your financial well-being; it’s best to be proactive and face the issue head-on. Getting out of debt is a real challenge, but with the right measures, it’s highly possible; on the other hand, dealing with wage garnishments and bank levies will put an unnecessary burden on building wealth and creating opportunities for yourself and your family. Nobody wants to be in debt, but the worst thing you can do in a debt lawsuit is ignore the case and cause bigger problems for yourself that could have been avoided.
