If you are being sued for a past loan, credit card payments, or other types of debt, you need a Coral Springs, FL debt attorney who can help. Our qualified Coral Springs, FL debt attorneys can assess your situation and develop a personalized strategy that can help you defend or settle your lawsuit, or find another remedy that works for you.
There may be defenses available that can help with your case and even eliminate any liability you have to pay the debt. If you win your lawsuit, you may even be able to collect your attorney’s fees from the creditor. Other options, such as settling the lawsuit for a lower amount or filing bankruptcy, may also be appropriate in your case.
Settling the Debt for a Smaller Amount
After a lawsuit has been filed against you, it provides an opportunity to negotiate a debt settlement lawsuit. In some cases, the court will order the two parties to attempt to reach a settlement agreement. Debt lawsuits often settle before they proceed to the trial phase, particularly when the amount of money being disputed is not a large sum.
When settling the debt lawsuit, you can enter into a repayment plan with the debt collector or creditor to pay a partial amount of the debt in a lump sum. To do this, you typically must repay a substantial amount of the debt fairly quickly. This is because creditors will not have a lot of incentive to take the risk that you will default on the debt again.
Before you settle your debt for a smaller amount, there are some factors to take into consideration. For example, the debt will still appear on your credit report and it will list it in your credit history as a debt that was settled for less than the full amount. The listing is viewed negatively by other creditors and financial institutions you may wish to obtain a loan or credit from in the future. Additionally, any debt that is forgiven is considered income by the IRS and so, you will have to pay taxes on it.
Settling the Debt for the Full Amount
Borrowers can always settle a lawsuit by paying the full amount of the debt owed. Of course, if you were able to pay the full amount, you likely would have never had a lawsuit filed against you. However, if you can make payments over time and your creditor agrees to this arrangement, this is another way to settle your lawsuit.
In these situations, creditors are often very close to obtaining a judgment against you, which may allow them to seize your property or even garnish your wages. In exchange for dropping the lawsuit, the creditor may require you to provide them with access to your bank account so they can automatically withdraw the amount agreed on at certain times.
Still, creditors do have an incentive to settle the lawsuit before a final judgment is issued. Trials are expensive and by settling the lawsuit with you, creditors can save themselves legal fees, court costs, and other expenses that all add up throughout a trial.
Filing Bankruptcy to Deal with Debt
By filing bankruptcy, you can eliminate medical bills, collection amounts, credit card debt, and any judgment issued in a debt collection lawsuit. Filing bankruptcy will also immediately stop calls from creditors and debt collectors. As soon as you file bankruptcy, a judge will issue an automatic stay. The automatic stay prohibits anyone from trying to collect on the debt you owe throughout your entire bankruptcy case.
Before you file bankruptcy, you should determine whether a Chapter 7 or Chapter 13 bankruptcy is right for you. During a Chapter 7 bankruptcy, you can discharge many different types of debt, including credit card debt and medical bills. However, to qualify for a Chapter 7 bankruptcy, you must pass a means test. The means test essentially shows that you do not earn enough income to repay the debt. Certain types of debt, including child support payments, tax debt, and criminal fines are just a few of these.
If you do not qualify to file Chapter 7 bankruptcy or you want to better manage non-dischargeable debts, Chapter 13 bankruptcy may be a better option. During a Chapter 13 bankruptcy, your debts are not discharged but instead, they are reorganized into a repayment plan. Repayment plans in Chapter 13 bankruptcy typically extend between three and five years, meaning the payments you are required to pay are lower and more manageable.
What is Judgment Proof?
Creditors can only legally collect certain assets from you if they have filed a lawsuit against you and won. If you do not have any of these assets, you are considered judgment-proof because there is nothing for the creditor to collect.
Not all income can be levied or garnished by creditors, even if you owe a debt you have not paid. Supplemental security income benefits, Social Security benefits, unemployment benefits, public assistance, and VA benefits are just a few of these. If this is the only type of income you have, it is exempt from collection and creditors cannot obtain a judgment against you.
Still, it is important to remember that even if you are currently judgment-proof, that does not mean that will always be the case. For example, if you have recently lost your job, you may be receiving unemployment benefits, which are exempt from judgments. Once you find new employment though, that income is likely not considered exempt and so, a creditor may try to take legal action against you.
Our Debt Attorneys in Coral Springs, FL Can Help with Your Case
If you are facing legal action over a debt you owe, our Fort Lauderdale debt defense lawyers at Loan Lawyers can advise on your case. Our skilled attorneys have the necessary experience to negotiate with the other side or to prepare a defense that will eliminate any liability you hold for the debt. Call us now at (954) 523-4357 or contact us online to schedule a free review of your case.
