I have received two requests for entry of default, but will file chapter 7 in upcoming months. Do I need to file sooner?
6 attorney answers
By filing bankruptcy now, you may be able to avoid having the default turn into judgment. Although filing bankruptcy May discharge the judgment, not having a judgment on your record has a few additional benefits.
I concur with atty Christianson who has correctly laid out the likely timetable. Your best bet is to find/consult/hire an Avvo BK lawyer by clicking the tab "Find a Lawyer" Many offer a free consultation by phone or in person. Take us up on it. BK is not a DIY project. Check with several and base your decision on the following: 1. How quickly they call you back; 2. Tney don't talk "legalese" and can explain/answer your concerns with confidence; 3. Check their client/peer reviews carefully. If there are any with less than 5 stars, keep calling others. Good luck to you.
You are not my client and I am not your attorney. This advice is given in the spirit of the AVVO platform and is based on general legal principles. You become a client when you enter into a formal retainer agreement with me.
Once the creditor has a judgment they may collect on the debt by filing liens against any real property or on personal property such as an automobile. Your wages may be garnished and your bank accounts levied. You may be served with a Notice to Appear for a Debtors Exam. All of these collection activities are stopped by the filing of a bankruptcy.
So, it depends on whether you own a home, are working, or have any money in the bank as to how soon you need to file. The court may enter the default quickly. You may keep track of the collection cases on the State Court websites for no cost, you can find the case docket which will show when the court enters the order of default . You can then figure your timing from there.
I suggest you seek a consultation with a competent bankruptcy attorney ASAP as there may be other issues that you need to look at for filing bankruptcy besides the default judgments.
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In addition to what has been mentioned, you also want to think about whether your income will increase or decrease in the next month or two. This change may qualify you for a chapter 7 or may disqualify you for a chapter 7. You do want to consider your options fairly quickly considering you have 2 default judgments around the corner. I recommend you speak with a bankruptcy attorney to discuss your options and pre-petition planning.
Please note: I am a licensed attorney in California. This response is intended only as general commentary. This response is not legal advice and does not create an attorney client relationship.
Once the judgment has been entered, the creditor gains additional tools in their collection effort, such as garnishment of wages, levy of bank accounts, and placement of liens against property. Filing your case can prevent these things from occurring, which alleviates additional stress in an already stressful time. In Michigan, any judgment liens placed can be stripped by filing the bankruptcy as well.
You may need to file sooner. Once judgments are entered against you, the creditor can seek to collect the judgment by such actions as garnishing your wages or levying money out of your bank account. They can also seek a court hearing where you would be examined under oath about your assets, employment, location of your bank accounts and other matters relevant to the collection of the debt. If you do not appear at this hearing, an arrest warrant will likely be issued for your arrest. As things can get very serious very quickly, I recommend that you do meet with a bankruptcy attorney to determine the best time to file.