The next question usually is, “does it matter if I file my bankruptcy before or after the creditor gets its small claims judgment?” The answer depends on your individual situation. If you’re unemployed and have no non-exempt assets, probably not. If you’re employed and your wages are not exempt from garnishment, it’s usually better to file the bankruptcy before the judgment is entered and the creditor begins collecting on that judgment.
Small claims judgments are typically dischargeable in bankruptcy. So the obligation to pay on that judgment will probably be eliminated whether you file your bankruptcy before or after the small claims suit is completed. If you file before the judgment, the judgment will not be entered. If you file after the judgment, the creditor may be able to collect on the judgment from the time of the judgment until you actually file the bankruptcy, but won’t be able to collect once you file. In short, the timing of the bankruptcy filing doesn’t usually make a big difference, but you should talk to your attorney to learn if the specifics of your situation require an earlier or later filing.
Many consumers are afraid of getting sued in small claims, largely because they don’t know what will happen. Information can relieve that stress and allow you to make good decisions. If you have questions about small claims suits, feel free to ask in the comments below or on my Facebook page. While I can’t give legal advice without meeting you face-to-face, I can answer general questions.
Bankruptcy attorneys from around the country are taking part in this “Bankruptcy Alphabet” exercise. Please take a few minutes to check out these other blog posts on the letter “S.”
Scared – by Jacksonville Bankruptcy Attorney, J. Dinkins G. Grange
Schedules and Statements – by Omaha/Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell
Section 341 Meeting – by Allen Park, Michigan Bankruptcy Attorney, Christopher McAvoy
Security Interest – by Jay S. Fleischman
Signs You Should Consider Filing for Bankruptcy – by Livonia, Michigan Bankruptcy Attorney, Peter Behrmann
SOFA – by Northern Bay Area Bankruptcy Lawyer Cate Eranthe
Spouse – by Cleveland Bankruptcy Attorney Bill Balena
Statement of Intention – by Metro Richmond Bankruptcy Attorney, Mitchell Goldstein
Statutory Lien – by Dorota Trzeciecka Bankruptcy Blog
Step Plan – by Kurt O’Keefe Michigan bankruptcy lawyer
Strip – by Bay Area bankruptcy lawyer Cathy Moran
Stripping – by Los Angeles Bankruptcy Attorney, Mark J. Markus
Student Loans – by Colorado Springs Bankruptcy Lawyer Bob Doig
Student Loans – by Hawaii Bankruptcy Lawyer, Stuart T. Ing
Student Loans – by Lakewood, Ca Bankruptcy Attorney Christine A. Wilton
Stuff – by WilksLaw, DC Metro
Surrender – by Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein
Image Credit: TooFarNorth/flickr