If you are unable to meet the payment demands of a creditor, you may face a collection lawsuit. Not only will the creditor seek payment of the full amount of debt, but the complaint may also seek court costs, interest and attorney fees.
Collection attorneys commonly tack on up to one-third of the amount of the underlying debt for attorney fees, greatly increasing the amount you owe. Creditor collection attorneys begin the process by filing a complaint in the courthouse of the county of your residence. Initially, you likely will not be aware that a lawsuit has been filed against you. The collection lawyer will have the county court clerk issue a summons, which notifies you of the lawsuit. Things really get rolling when a process server personally serves you with a copy of the summons and complaint.
You have 30 days to file a written response with the court. Calling the collection attorney on the telephone or writing the attorney a letter does not constitute a proper response. If you fail to properly respond to the lawsuit, the court will enter a judgment against you for everything the collection lawyer requested in the original complaint. The judgment, once it is enrolled, becomes a lien against your personal residence.
The creditor’s lawyer will also attempt to collect the judgment by having the court issue a writ of garnishment, whereby the court orders your employer to make deductions from your paycheck until the full amount of the judgment — plus interest — is collected. Your employer does not have any choice in the matter. In Mississippi, a creditor can garnish up to 25 percent of your income each pay period without any regard as to whether or not you have money left to live on.
Fortunately, filing Chapter 7 or Chapter 13 bankruptcy stops collection lawsuits. You can avoid having liens placed against your property, and you can avoid wage garnishment. Even if your employer has already begun making deductions from your paycheck, the wage garnishment will stop. You can also remove liens placed against your residence as part of the bankruptcy process. In order to minimize your attorney fees, however, it is best to file Chapter 7 or Chapter 13 before a creditor obtains a judgment against you. If you have been served with a summons and complaint, you should call Pond Law Firm immediately.
Filing bankruptcy, Chapter 7 or Chapter 13 bankruptcy requires the experience of a legal team that can help you choose the best course of action for your unique circumstances. At Pond Law Firm in Jackson, we have more than 25 years of bankruptcy experience, and we are committed to your success. To schedule a free initial consultation, call 601-948-4878 or email the firm.
Jackson-based Pond Law Firm is a federally designated debt relief agency. Our lawyer helps people file for bankruptcy relief under the Bankruptcy Code.