Lately, I am seeing more people come in for a bankruptcy consultation that have been sued by one of their credit card companies. Usually, it is for smaller amounts, less than $5,000. Nothing sends more panic through a person to have the process server show up at the door one evening (they always seem to drop by late at night) and get handed a lawsuit.
While receiving the lawsuit is nothing to ignore, it can help calm your nerves a little to understand the litigation process and when you can expect that your credit card will actually be able to obtain a judgment against you. Below are the steps to how a judgment is obtained in Texas.
Step 1: You Receive the Citation and Petition
The documents the process server has dropped off at your house likely were comprised of a Citation and Petition. The Citation is the document that lets you know that a lawsuit has been filed against you and that you have the first Monday after 20 days (in small claims court, it’s the Monday after 10 days) to respond by filing a written Answer with the court. This is called the Answer Date.
The Petition is the document that lets you know who is suing you and what they are alleging you have done or what amount of money they are trying to get from you.
Step 2: Responding to the Petition
If you dispute what is alleged in the Petition, you must file a written Answer to the Petition on or before the Answer Date. If you submit a written Answer the case will then be put on a track towards heading for trial. If you don’t file a written Answer you risk getting a Default Judgment entered against you.
Step 3: Default Judgment
If you do not file a written Answer to the Petition by the Answer date, you will likely have a Default Judgment entered against you soon after that. A “Default Judgment” is the court’s determination that you owe the money alleged.
Step 4: Your Wages Cannot be Garnished
Unlike other states, wages in Texas are not subject to garnishment, meaning the credit card company cannot have a portion of your wages set aside to pay their Judgment. However, a checking/savings account can be garnished, and the amounts on deposit seized to pay the Judgment.
Stopping the Lawsuit Through Bankruptcy
If you have been served with a Lawsuit the filing of a bankruptcy case will stop this process in its tracks. No matter what stage or step the lawsuit is in, once the bankruptcy case is filed with the court the collection case against you must stop. Even if a Default Judgment has been entered against you, it can be eliminated through a bankruptcy filing.
If you need to file bankruptcy and are having your checking account garnished, the bankruptcy will stop the garnishment and void the underlying judgment.
You Have Time, Just Not a Lot of It
Once you get served with a Lawsuit, you don’t need to panic. However, you can’t ignore it and expect it to go away. There is plenty of time to meet with a bankruptcy attorney, get your bankruptcy case ready to file, and file it prior to a default judgment being entered.
If you have been served with a lawsuit, I would be happy to meet with you and discuss your bankruptcy options or determine if it is a lawsuit you should contest. My bankruptcy consultations are always free. Give me a call at (940) 692-7800 or via email at firstname.lastname@example.org.