Creditor Judgment and Bankruptcy - Frank J. LaPerch, PC

What Does It Mean If a Creditor Gets a Judgment Against Me?

If you have not paid a debt it is possible the creditor will file a claim in court and obtain a judgment against you. What does this mean?

A judgment is the result of a lawsuit. If a claim is filed against you regarding a debt and you do not file an answer within a certain period of time, a default judgment can be issued. If you do respond to the claim a consent judgment could be issued, which in most cases includes repayment terms. The third option allows you to file an answer and go to trial, which means the final decision regarding the judgment will be made by a judge or jury.

Gives Creditors Increased Power against You

Judgments in collections cases turn an unsecured debt into a secured one – which means the creditor gains more rights. They have access to more tools for debt collection, such as garnishing wages or a bank account, or placing a lien against any real estate you own. To read more about unsecured versus secured debt, check out this article from

There are limits concerning how much a creditor can seize from you, but if the creditor wins the claim and a judgment is filed against you, you can expect the debt will need to be repaid one way or another.

Judgments can also affect Chapter 13 bankruptcies. If you own property, then the judgment will be considered a secured claim and will need to be paid in full under the Chapter 13 repayment plan. It will also be paid before any of the unsecured creditors. Depending on the circumstances, it may be possible to convert the secured claim to an unsecured claim. Obviously, an unsecured debt turning into a secured judgment complicates an already difficult situation.

And it goes without saying, a judgment appears on your credit report and negatively affects your credit score for several years.

In New York, the judgment creditor is also entitled to 9% interest on the judgment. Unfortunately, for the struggling debtor, an unresolved judgment continues to grow at a significant rate.

Can Filing for Bankruptcy Help?

Bankruptcy is not the right option for everyone when a claim is filed and a judgment is pending, but it is the best option in many cases. Much of this depends on how likely it is for the creditor to win the claim (very likely if you owe the debt), and whether or not you can arrange for repayment. If you have more than one outstanding judgment and in general are struggling financially, chances are your situation will only get worse if the judgments are not addressed.

Do you have questions about a claim filed against you? Have you been served with a lawsuit and you are unsure what to do next? We can help. Contact the law office of Frank J. LaPerch, PC at 845.942.5500.

Questions/ Summary of Case

This field is for validation purposes and should be left unchanged.

Contact Us

  • 148 South Liberty Drive
    Stony Point, New York 10980


    Get Social

    facebook linkedin

Frank LaPerch

Copyright © 2024 Frank LaPerch | All rights reserved | Sitemap
Rockland-Bankruptcy on Attorneys Delivered
Legal Website Design by Legal Web Design | Authored By Frank LaPerch