In addition to the good advice the other lawyers gave, I would mention that there are two reasons it is often better to file bankruptcy for a dischargeable debt before rather than after it goes to court: First, if it goes to court first and judgment is entered against you, a lien can later be filed against any property you own, as well as garnishing of your wages and/or bank accounts. Second, the debt going to collection is normally a strike against your credit; then when judgment is entered against you if you lose, your credit score drops again. It also drops further with each post-judgment recorded collection activity, such as garnishment, liens, etc. It is true that filing bankruptcy in itself will bring your credit score way down; but the fewer strikes against your credit, the faster your credit score can be built up again, so it is at least marginally better to avoid as many court judgments, garnishments, liens, etc. as possible going into bankruptcy, as each separate strike depresses your score more; but the day you file, all collection efforts must stop.
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You haven't said what the monentary payments are.
Some judgments are not dischargeable in bankruptcy (such as damages from a DUI, child support, fraud, alimony, many taxes and student loans). Others are.
As a general rule, it is far better to file before than after a judgment. Once there is a judgment, the prevailing party could promptly do granishments, etc against you, and also that judgment becomes a lien on your property, which increases the cost (in some cases) of bankruptcy.
Since you are in a lawsuit you already have an emergency. You need to see a lawyer ASAP to weigh your options (and timing) as well as eligibility for bankruptcy. Feel free to call me with details at 404-768-3509.
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Provided you qualify to file, yes, you can always file, but depending on the nature of the suit, the debt may not be eligible to be discharged. The few examples that spring to mind include child support, alimony, and suits related to criminal & quasi-criminal offenses, such as drunk driving accidents or fraud.
So I would urge you to take your court paperwork to an experienced local bankruptcy attorney to review.
Hope this perspective helps!
Generally, judgments are dischargeable in bankruptcy, if the underlying debt is dischargeable. For example, debts incurred due to fraud are not dischargeable. So, a judgment for a debt incurred due to fraud is not discharageable. There are other examples, but this area of the law can be complicated. Go see an experienced attorney to help you decide if filing for protection under the bankruptcy code is right for you.
I hope this helps.
Steven A. Leahy
Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-client relationship is created or is intended to be created hereby. You should contact a local attorney to discuss and to obtain legal advice.
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