I was sued for a debt, is it too late to file for bankruptcy relief?

I was sued on a credit card debt, I didn’t contest the lawsuit and the creditor obtained a judgment. Now they have judgment lien against my home. Is it too late to file for bankruptcy relief?

For most bankruptcy filers, the answer is “No!” But if you can, don’t wait until a creditor obtains a final judgment. The quicker you act, the better.

In North Carolina, if a judgment is obtained against you, it acts as a lien against any real estate you own. This is called a “judgment lien”. This can prevent you from selling your home without first paying off the judgment. If you don’t have equity in your home or available cash to pay off the judgment, the judgment lien can prevent you from being able to sell your home.  But, help is still available through bankruptcy relief.

The Bankruptcy Code allows debtors to remove judgment liens when there is no equity available in your home above and beyond your mortgage and exemption allowances. I can file an adversary proceeding in the bankruptcy case to “strip” the lien from your home. An adversary proceeding is like a mini-lawsuit within the bankruptcy. However, if an adversary proceeding must be filed, it can make the costs increase in your bankruptcy case.

If you’ve been sued over a debt, don’t wait.  Give me a call today so we can discuss you options and hopefully save you money in the long run.