Debts are part of everyone’s day-to-day life. Most people use credit cards, take out loans, and finance large purchases at some point in their lives. There is such a thing as good debt, and that’s the kind that gets you a higher credit rating. On the other hand, a person can overspend. Sometimes there are dire circumstances that put people into debt, like medical emergencies. Whatever the reason is, it’s important to talk to your credit card companies and come up with a solution before the situation gets out of hand.
Failing to repay a debt means that the creditor can start seeking legal redress, known as a collection judgement. If you ignore your credit agencies notices and they take legal action, they gain the right to pursue appropriate debt collection mechanisms.
Legal Debt Collection
Creditors are mandated by law to obtain a legal judgment prior to initiating the debt collection process. Before the court offers the debt collection ruling, the judge takes various factors into consideration, including the numerous reminders served upon the debtor. Failure to reach an agreement with the creditor is reason enough for the court to give the credit company the go-ahead to take significant actions to reconcile the deficit.
After taking the necessary legal steps, the creditor is allowed to use various methods against you to collect the debt. In the event of losing the case with a creditor or failing to respond as required by the law, the debt collection agency puts the judgment on public record.
Debt Collection Methods
The collection judgment is a specific amount that you must pay by a certain date. It’s usually the culmination of all your debts. An individual must pay their collection judgment on time. Otherwise, the agency can start to take severe actions to get their money back.
Wage garnishment is usually the first and most common action creditors take. The percentage that comes from your paycheck is generally non-negotiable unless you have a debt collection attorney who is fighting to ensure fairness in this process.
Collection groups may also seek to enforce a bank levy, where the agency obtains a court order freezing all funds in the defaulter’s accounts. The bank doesn’t have to notify the debtor before their books are frozen, and the only way to regain access to is repay the owed amount.
If you own property that is contributing to your debts (for example, not paying your home’s mortgage), then the creditor can hold the title on it until you repay the debt. Each state has specific laws protecting individuals, so there are certain types of property that the bank cannot touch. A legal expert can look at your case and let you know if you should worry about your assets.
Bankruptcy Options
The best thing to do is to make a deal and pay the collections agency before they go to court against you. If there’s no way to do that, seek the help of a bankruptcy attorney as soon as you can. Retaining a lawyer early in the process shows that you’re taking this case seriously. An experienced legal professional will make sure that you get a fair settlement without losing what you need to live your life.
Retain a Louisiana Legal Expert
With over 35 years of experience, E. Orum Young Law Offices have filed the most bankruptcies in Northeast Louisiana. Our firm offers seasoned bankruptcy attorneys who can assess your current financial situation and determine the best options for a favorable settlement in your case. Call (318) 450-3192 today for a free consultation.
