The Beltas Law Firm
|Posted on April 8, 2014 at 7:25 AM|
A judgment causes serious harm to a debtor’s credit, and in some cases, may be worse than filing for bankruptcy. Unlike bankruptcy, a judgment doesn’t go away until the creditor satisfies it. When creditors obtain a judgment, they can freeze a debtor’s bank account, garnish his wages and, in rare cases, seize the debtor’s personal assets. In New York, creditors have twenty years to collect a judgment and they can renewed it, over and over again. Also, judgments accumulate interest every year, and can cause devastating effects to the debtors’ credit score. It can prevent them from obtaining a job or promotion, getting a lease for an apartment, and obtaining a low interest rate for a car loan or credit card.
A creditor obtains a default judgment when the debtor does not respond to the court papers, or fails to appear in court. This usually happens because the debtor does not receive any court papers.
It’s important to get a default judgment set aside as soon as possible. This is done by filing court papers to get a default judgment vacated. If the judge grants the the relief requested, and vacates the judgment, then the debtor can use the judge’s written order to “unfreeze” a bank account and terminate a wage garnishment. Please note, however, that the judge typically does not dismiss the lawsuit in its entirety. Therefore, the debtor should anticipate litigating or entering into a settlement with the creditor. Please feel free to contact our office for more information about and how to vacate a default judgment.
Categories: Bankruptcy/Consumer Debt