Thankfully for those people who are struggling with overwhelming debt, the answer to this question is YES. If you are sued by a creditor (a person or company you owe money to) and the creditor gets a court judgment, you may file bankruptcy and wipe that judgment out.
Normally a creditor that has gotten a court judgment can do three things to try to get money from you, including: 1) garnish your wages; 2) levy your bank accounts; and 3) put a lien on your property.
Bankruptcy Stops Wage Garnishments
After getting a court judgment, the creditor can have an earnings withholding order served on your employer. That document requires your employer to take 25% of every check you get and send that money to the County Sheriff’s department. The Sheriff then gives that money to the creditor. The earnings withholding order continues until the debt you owe is paid in full. A bankruptcy filing stops garnishments.
Bankruptcy Stops Bank Account Levies
A judgment creditor can use the court judgment to order your bank to freeze your checking and savings accounts and take all of your money up to the amount you owe the creditor. Filing a bankruptcy stops bank levies.
Filing Bankruptcy Can Allow You to Remove Judgment Liens from Your Property
When a creditor gets a court judgment against you, it can take that judgment to the County Recorder’s office and have it recorded as a lien against your property. If you own a home, or other real estate, this lien is a secured debt and stays on your property accruing interest until you sell or transfer title. If you sell the house, the creditor gets paid before you do.
Filing bankruptcy before a court judgment can be recorded stops the creditor from getting the lien. In some cases, filing bankruptcy even after the lien is created can allow you to avoid or strip off the lien, i.e., you can get rid of it.
To learn if you can prevent judgment creditors from garnishing wages, levying bank accounts or obtaining judgment liens, call an experienced bankruptcy attorney who can answer your questions and give you expert advice. For 27 years, I’ve helped literally thousands of residents of Sonoma, Marin, Napa, and Lake Counties file bankruptcy and get a fresh start.
For a free consultation about your options, call the Law Offices of Brian Barta at (707) 542-2844
