Once your creditor has filed the lawsuit, you have the right to defend the case and try to avoid having a judgment issued against you by the court. A judgment is a court order that says you owe the money and empowers the creditor to collect against you. Once the judgment is issued, your creditor has several tools at their disposal for collecting the money owed. Here are some of the options:
- Debtor’s examination: Your creditor can obtain a court order that requires you to come to a court to answer questions about your assets under oath. You must attend the examination. If you fail to, you may be found in contempt of court and can face an arrest warrant, fines, and other potential problems. At the debtor’s examination, you must answer questions asked by the creditor or its attorney. Those questions will focus on everything you own, where you work, your bank account information, wage information, and many other things regarding your financial matters. You are required by law to answer these questions truthfully. The creditor can use the information obtained to seek garnishments and other collection procedures.
- Wage garnishment: Your creditor can apply to a court to have money withheld from your paycheck. A notice will be sent to your employer and the money will be subtracted from your pay by your employer and sent to the court for payment on the debt.
- Account garnishment: Your creditor can apply to a court for an order allowing them to collect their judgment, or a portion of it, by contacting your bank and having them remove the money from your bank account and submit it to the court.
- Setoff: In some circumstances where a debtor has a debt with their bank or credit union, the bank or credit union may be able to simply withdraw money from your account without any court judgment.
- Judgment lien: Once a creditor gets a judgment against you, they have the ability to have that judgment perfected into a lien against any real property you own. This will then secure their against your property and give them the ability to foreclose against it.
- Attachment of other assets: Once a lien is obtained, a creditor can also seek to collect it against vehicles, equipment, personal property, other sources of income, inheritance, and other things you may own at the time of the judgment or any time in the future as long as the judgment is still owed.
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