on the Bankruptcy Soapbox

Service of a summons in a collection suit seems often to be the prod that gets procrastinating debtors into my office to file bankruptcy. Yet it is not the emergency that they think. Their financial world will not end if a judgment is entered before they file bankruptcy.

These collection actions are usually on credit card debts and almost always the client admits the debt and has no defense to the suit. Therefore, filing a truthful answer would do little to alter the situation.

Second, the debt is just as dischargeable in bankruptcy if embodied in a judgment as it is as a monthly bill in default. There is no loss of rights should the judgment be entered before commencement of the bankruptcy case.

Procedurally, even when the defendant (the person who has been sued) fails to timely answer, the plaintiff must jump through several more hoops just to get the piece of paper that is the judgment, and still more hoops to compel some sort of payment on that judgment. It all takes time, and it is usually not nearly as important to the plaintiff as to the defendant.
If you are served with a summons, take a deep breath. It probably signals that you need to file and you need to face up to that fact, but it doesn’t mean the world ends in 30 days, when the answer is due.

Gather up all of your bills, your paystubs, and your last tax return, and see a bankruptcy lawyer.

More on lawsuits

Cathy Moran

This entry was posted on Tuesday, September 18th, 2007 at 7:22 am and is filed under Bankruptcy decision, Dealing with debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.