Start My Answer

Will Bankruptcy Stop a Judgment?

Melissa Lyken | March 01, 2023

You can stop the debt collection calls.

Summary: Are you filing for bankruptcy and worried about a standing judgment or one that's soon to be filed? Learn how bankruptcy affects judgments in this post.

Did your creditor obtain a favorable judgment on the collection lawsuit they filed against you? If so, your wages and bank account may be garnished, and properties may be foreclosed or repossessed to satisfy your obligations. Your judgment creditor may garnish up to 25% of your disposable income, and this is the last thing that you need to happen.

If you've explored all other options, filing for bankruptcy may be a good solution for you. Push your misconceptions to the side and focus on the advantages bankruptcy can bring you. Many everyday folks have filed bankruptcy, and like them, you can obtain a fresh financial start and future good credit. For now, let's concentrate on getting rid of your legal obligations by filing bankruptcy.

Avoid bankruptcy by filing a response to your debt collection lawsuit with SoloSuit.

Bankruptcy Can Stop Judgment

Bankruptcy is a constitutional privilege given to every citizen as a solution to their outstanding unpaid debts. It is a legal process that helps individuals and businesses get rid of their debts or have them paid via a repayment plan. The purpose of filing bankruptcy is to get your debts discharged. Legal forgiveness of your debts is the primary goal.

Anyone can file bankruptcy; however, the kind of bankruptcy you are eligible to file depends on your circumstances. The most well-known is Chapter 7, but individuals and businesses with high net worths may also qualify for Chapter 13 and 11. The applicability of each Chapter depends on the value of your total assets and income. Let's look at the differences between Chapters 7, 13, and 11 and determine which chapter you are allowed to file.

Call the Bankruptcy Hotline

Dial 888-790-4291. SoloSuit partners with the Free Bankruptcy Advice Helpline.

File Chapter 7 Bankruptcy to Stop Judgment

To file Chapter 7, you must first pass the means test. You must be able to demonstrate that you do not have sufficient means to pay all your debts. Chapter 7 is a liquidation bankruptcy, so all of your properties and assets must be disclosed. The assigned trustee will sell all of your assets and non-exempt properties, and the proceeds will be used to pay all of your creditors.

You will be allowed to keep your exempt properties, including your home, $1,000 in each personal property and equity in a car. If you do not have a home and you are only leasing an apartment, you will be allowed to keep $5,000 in personal property and $1,000 of the equity in your car.

Respond to debt collectors in 15 minutes with SoloSuit.

File Chapter 13 Bankruptcy to Stop Judgment

Chapter 13 is a reorganization. People who file Chapter 13 are those who failed the means test. In this type of bankruptcy, you can keep your properties and assets, and in return, you have to make a monthly payment to pay off all your debts within 60 months (without interest, penalties, or late fees). You will be required to propose a monthly repayment plan, which can be determined in two ways, first, via the value of your non-exempt assets, or second, via your disposable income. Whichever will pay the most significant amount off your debts will be used as the basis for determining the amount of your monthly payment.

File Chapter 11 Bankruptcy to Stop Judgment

Only individuals or businesses with $1,100,000 or more of secured debts or $390,000 or more of unsecured debts can file Chapter 11. Usually, only businesses can afford to qualify for filing Chapter 11. The process for filing Chapter 11 is essentially the same as when filing Chapter 13. However, your creditors will have the right to vote on your payment plan, and the legal fees are expensive.

Bankruptcy Doesn't Stop Unforgivable Debts

Filing bankruptcy may give you ideas of a debt-free life. However, this is not the case for those who have debts that cannot be legally forgiven. You will still owe these debts despite filing for bankruptcy. The debts that bankruptcy cannot eliminate are:

  • Tax claims
  • Government fines and penalties
  • Court fines and penalties
  • Debt not listed on the bankruptcy
  • Reaffirmed debts
  • Student loan debts, except when you can prove that paying it would cause undue hardship
  • Judgment on child support
  • Judgment on alimony
  • Judgment liens on your property

Respond to debt collection lawsuits fast with SoloSuit.

Discharging a Collection Lawsuit Judgment

A favorable judgment obtained by the creditor may be enforced by garnishing your wages, foreclosure, the placement of liens on your property, or levying your bank accounts. Fortunately, filing bankruptcy may halt enforcement of the judgment provided that the debt is a dischargeable debt. However, it will not automatically wipe out a judgment lien on your property placed before filing bankruptcy. You have to file a court motion to remove a lien.

An Automatic Stay Stops Collection Activity

When you file bankruptcy, the court will issue a stay order. Once the stay order takes effect, you are automatically protected from your creditor. Your debt ‘stays' but is not canceled as the stay order merely suspends any collection activity. This means that no creditors can call you or send any letters and file a collection lawsuit. If there is a pending suit, it will be suspended. If any of your creditors violate the automatic stay order, you can file contempt against them and make them pay for the fine and damages.

Filing bankruptcy will remain on your credit report for ten years and will have a significant impact on your credit score. You may have a hard time getting new credit cards, mortgages, or other loans. However, that will not last forever. Within a year after being discharged, you can already start to rebuild your credit score. Filing for bankruptcy is not necessarily a bad idea if you've explored all other options.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

Get Started

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

How to Answer a Summons for Debt Collection Guides for Other States

Here's a list of guides for other states.

All 50 states.

Guides on How to Beat Every Debt Collector

Being sued by a different debt collector? We're making guides on how to beat each one.

Win Against Credit Card Companies

Is your credit card company suing you? Learn how you can beat each one.

Going to Court for Credit Card Debt — Key Tips

How to Negotiate Credit Card Debts

How to Settle a Credit Card Debt Lawsuit — Ultimate Guide

Get Answers to These FAQs

Need more info on statutes of limitations? Read our 50-state guide.

Why do debt collectors block their phone numbers?

How long do debt collectors take to respond to debt validation letters?

What are the biggest debt collector companies in the US?

Is Zombie Debt Still a Problem in 2019?

SoloSuit FAQ

If a car is repossessed, do I still owe the debt?

Is Portfolio Recovery Associates Legit?

Is There a Judgment Against Me Without my Knowledge?

Should I File Bankruptcy Before or After a Judgment?

What is a default judgment?— What do I do?

Summoned to Court for Medical Bills — What Do I Do?

What Happens If Someone Sues You and You Have No Money?

What Happens If You Never Answer Debt Collectors?

What Happens When a Debt Is Sold to a Collection Agency

What is a Stipulated Judgment?

What is the Deadline for a Defendant's Answer to Avoid a Default Judgment?

Can a Judgement Creditor Take my Car?

Can I Settle a Debt After Being Served?

Can I Stop Wage Garnishment?

Can You Appeal a Default Judgement?

Do I Need a Debt Collection Defense Attorney?

Do I Need a Payday Loans Lawyer?

Do student loans go away after 7 years? — Student Loan Debt Guide

Am I Responsible for My Spouse's Medical Debt?

Should I Marry Someone With Debt?

Can a Debt Collector Leave a Voicemail?

How Does Debt Assignment Work?

What Happens If a Defendant Does Not Pay a Judgment?

How Does Debt Assignment Work?

Can You Serve Someone with a Collections Lawsuit at Their Work?

What Is a Warrant in Debt?

How Many Times Can a Judgment be Renewed in Oklahoma?

Can an Eviction Be Reversed?

Does Debt Consolidation Have Risks?

What Happens If You Avoid Getting Served Court Papers?

Does Student Debt Die With You?

Can Debt Collectors Call You at Work in Texas?

How Much Do You Have to Be in Debt to File for Chapter 7?

What Is the Statute of Limitations on Debt in Washington?

How Long Does a Judgment Last?

Can Private Disability Payments Be Garnished?

Can Debt Collectors Call From Local Numbers?

Does the Fair Credit Reporting Act Work in Florida?

The Truth: Should You Never Pay a Debt Collection Agency?

Should You Communicate with a Debt Collector in Writing or by Telephone?

Learn More With These Additional Resources:

Need help managing your finances? Check out these resources.

How to Make a Debt Validation Letter - The Ultimate Guide

How to Make a Motion to Compel Arbitration Without an Attorney

How to Stop Wage Garnishment — Everything You Need to Know

How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)

Defending Yourself in Court Against a Debt Collector

Tips on you can to file an FDCPA lawsuit against a debt collection agency

Advice on how to answer a summons for debt collection.

Effective strategies for how to get back on track after a debt lawsuit

New Hampshire Statute of Limitations on Debt

Sample Cease and Desist Letter Against Debt Collectors

The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah

West Virginia Statute of Limitations on Debt

What debt collectors cannot do — FDCPA explained

Defending Yourself in Court Against Debt Collector

How to Liquidate Debt

Arkansas Statute of Limitations on Debt

You're Drowning in Debt — Here's How to Swim

Help! I'm Being Sued by My Debt Collector

How to Make a Motion to Vacate Judgment

How to Answer Summons for Debt Collection in Vermont

North Dakota Statute of Limitations on Debt

ClearPoint Debt Management Review

Indiana Statute of Limitations on Debt

Oregon Eviction Laws - What They Say

CuraDebt Debt Settlement Review

How to Write a Re-Aging Debt Letter

How to Appear in Court by Phone

How to Use the Doctrine of Unclean Hands

Debt Consolidation in Eugene, Oregon

Summoned to Court for Medical Bills? What to Do Next

How to Make a Debt Settlement Agreement

Received a 3-Day Eviction Notice? Here's What to Do

How to Answer a Lawsuit for Debt Collection

Tips for Leaving the Country With Unpaid Credit Card Debt

Kansas Statute of Limitations on Debt Collection

How to File in Small Claims Court in Iowa