Dealing with legal papers can be a very daunting task. Having to deal with legal papers when you have no experience with them makes the process even more scary. Unfortunately, this is far too common of a reality for many people in today’s society. When served a stack of legal documents----Summons and Complaint---for a debt that you owe, it’s a good idea to have someone with background and expertise in that matter review it with you and advise you of your options.
Modesto Bankruptcy Attorneys Have Extensive Background With Lawsuits and Judgements
The first step in understanding your options with lawsuits and judgments is to speak with someone who is well versed in defending such actions. Our attorneys at Modesto Bankruptcy Attorneys have been successfully defending civil claims as far back as 2009. Our attorneys have successfully had these cases dismissed without the need for any court appearances; our attorneys have reached favorable payment plans with the creditors to avoid further legal action; and our attorneys have successfully discharged balances owed on judgments in both Chapter 7 and Chapter 13 actions without risking the client’s assets.
Understanding What A Summons Is
Generally, the first document you will see when you are sued by a creditor is the Summons. The Summons is a document that notifies you that a lawsuit is filed against you. The Summons will state the name of the plaintiff----i.e., who is suing you. The Summons will state the name of the defendant---i.e., the person being sued. It will also state the Court it was filed in, when it was filed, and it will provide you with the case number assigned to the case.
Further, the name of the attorney representing the plaintiff will be listed along with their contact information. Finally, the Summons (in California) will explain to you that you have 30 calendar days to file an Answer---i.e., your response---in that case against you---and if you don’t timely file that Answer, you might lose the case by default and without any further notices.
Understanding What A Complaint Is
The Complaint---which you will usually see directly behind the Summons---is a bit more detailed than the Summons. The Complaint goes into the details of the legal action the plaintiff is bringing against the defendant. Again, the Complaint will also contain the plaintiff’s attorney and their contact information---the case number---and the court the case is filed in. The Complaint will also reiterate who the plaintiff is and who the defendant is.
The Complaint will then go into the allegations the plaintiff is bringing against the defendant. The Complaint will lay out the legal basis for the lawsuit. The Complaint will explain the facts of the matter as to what led to this lawsuit. Furthermore, the Complaint will explain in detail each legal action the plaintiff is bringing. And in the end, the Complaint will conclude with a “prayer”—this is where the plaintiff states how much money they are suing the defendant for.
The Events That Lead To A Summons and Complaint
A Summons and Complaint---commonly referred to as a Lawsuit---is generally the creditor’s final attempt to collect on the debt owed to them. Presumably, the defendant owes money to the plaintiff. At some point the defendant stops making the payments owed to the plaintiff. This will generally trigger phone calls and late notices being sent out. If these attempts are not successful, either a law firm is hired or a law firm that is already on staff takes over the file.
As the law firm is now handling the matter, their goal is to collect the money owed to their client. This could lead to the law firm offering discounted payments in order to collect as much money as they can. If the account is still not satisfied, the law firm would generally then make the decision to file a lawsuit against the defendant.
The lawsuit is a combination of the Summons and Complaint, as discussed above. Now that the lawsuit is filed, the law firm must ensure that the defendant is served a copy of said lawsuit. The service is extremely important in the timeline of this process as this triggers the time the defendant has to file their Answer. From the service date, the defendant is given 30 calendar days to file their Answer in that case.
Not Timely Responding To A Lawsuit Can Lead To A Judgment
Some people think that by continuing to ignore collection attempts, they will just go away. Sure, it’s possible. However, the risk of trying this “bury your head in the sand” technique could have major negative impacts on your finances. Once a lawsuit is filed against you, the creditor will serve you a copy of that. Once it’s been served, you are now on the clock and given 30 days to file your Answer. A lot of people ignore this requirement but they have no idea what will come next.
After the 30-day window expires, the creditor’s attorney now has the ability to file a Request for Default in that case. In essence, this Request is the creditor advising the Court that the Summons and Complaint were both filed---they were served upon the defendant---30 days has elapsed---and no Answer was filed nor was any extension granted. Assuming the Court doesn’t find any procedural errors, the Court will now grant a Default Judgement in favor of the plaintiff.
This Default Judgement is the Judge’s Order stating that without having to plead their case further, the plaintiff wins the lawsuit by default. Now the plaintiff will request to convert that into a Money Judgement and once that’s been issued, you are now facing a court order stating that you owe the creditor that sum of money. The rules of the court also allow that judgment to gain interest at a specified rate until the judgement is satisfied.
A Judgement Puts You At Risk of Having Your Bank Accounts Levied
If the creditor knows where you bank at, they now will have the ability to levy that account. Since they already have the judgement entered, the creditor will just need to request the Judge sign a Bank Levy Order. Once that’s signed, the instructions will be sent to the specific bank. The instructions to that bank manager will be simple: Pull the money from this person’s accounts and send it to us.
For example, let’s say the judgement entered against you is for $10,000.00. The bank will be required to pull money from your accounts to satisfy that judgement. Assuming you have a direct deposit set up from your job, consider that the direct deposit hit your account that same day. By the next day, that money will be taken from your account without any further notice to you. Now you are sitting on a bank account that has no money in it and you still need to pay your monthly bills such as rent, mortgage, car payments, etc.
Wage Garnishment Can Be Issued With Your Employer
Another option the creditor has once the judgement is entered in their favor is to take money from each of your paychecks. They will do this by requesting the Judge issue an Earnings Withholding Order---i.e., wage garnishment. The Order will state your employer’s information and the amount that they are owed. It will further demand that a certain amount be taken from each of your paychecks until their debt is satisfied. The demand amount is generally 25% of your disposable check amount. Based on that percentage, your employer would garnish $250.00 for every $1,000.00 you earn and send that to the creditor to satisfy their judgment.
Also keep in mind that their judgment is gaining interest until the judgment is fully satisfied. Unless you resolve this judgment in some manner, you will have each of your future checks garnished until the amount is paid in full. Most people at this stage do not have significant disposable income remaining each month so having to survive on 25% less money could be the difference between paying your rent/mortgage or not being able to.
Having A Lien Placed On Your House
If you are a homeowner, a judgment can be very scary and burdensome to your future. The judgment creditor has the legal ability to place a lien on your house once they have a judgment entered in their favor. They do so by filing an abstract of judgment in the same county that you own the house. Once filed, they now have a valid lien against the equity in your home. Again, this will continue to accrue interest until satisfied in full.
With the lien on your home, the creditor has the ability to eventually foreclose on your house, leaving you in a much worse situation than you previously were. In the alternative, if you refinance the mortgage or end up selling the home prior to a foreclosure occurring, you will need to satisfy that judgment in full during the sale or refinance, costing you significant extra money than you anticipated.
Knowledgeable Bankruptcy Attorneys Can Help
As scary as judgments can be, you actually do have some options. Quite often, filing for Bankruptcy relief could prove to be your best option when dealing with a judgment or pending judgment. By filing either Chapter 7 or Chapter 13 bankruptcy, a legal tool known as the Automatic Stay goes into effect. The Automatic Stay, among other things, forces the plaintiff to immediately stop further legal action against you unless given specific authority from the Bankruptcy Court to move forward.
The fear of having your paycheck garnished, bank account levied, or lien placed on your home immediately stop. Further, the goal in the bankruptcy filing would be to receive a discharge of that obligation and any other dischargeable obligations that you have. Once the discharge is entered, the creditor holding that judgment is not legally owed any money.
Find A Qualified Bankruptcy Lawyer With An Office Near Me
Dealing with judgments is a scary endeavor if going at it alone. There are many legal consequences that could result once a monetary default occurs. Those legal consequences can be swift and harmful to your finances and assets. Our legal team at Modesto Bankruptcy Attorneys has the ability to successfully eliminate obligations owed on legal judgments in a manner that is beneficial to you, your family, and your assets. Please CLICK HERE or give us a call at 209-314-3010 to schedule your free initial phone consultation at your earliest convenience.