Cinderella’s Sad Story of Garnishment

Once upon a time, Cinderella had a money judgment entered against her.  She thought nothing of it at the time because she could no more pay her debt than go to the ball.  Then along came her Fairy Godmother and next thing you know, Cinderella had won the Prince Charming lottery. Right in the middle of happily ever after, a creditor garnished Cinderella’s newfound wealth.  Her brand new great big mound of money was swept clean from her account, just like that—poof!—it was gone.  “Surely you would not take my good fortune from me!” Cinderella protested. “The judgment is good for 20 years,” replied the creditor.  And thus Cinderella went from rags to riches and back to rags again.   A Money Judgment is just a piece of paper, EXCEPT a creditor may watch your bank account over the next 20 YEARS.  If your credit score goes up, that creditor might reappear.  With a Money Judgment, he may get your car, your real estate (except homestead), or garnish your bank account without prior notice to you, freezing any good fortune you come into. Everybody should pay their debts; however, certain incomes are exempt to prevent a choice between paying the […] Read More

What Is Good in 20 Years?

You can get a 20-year warranty on a mattress, roof shingles, and vinyl flooring.  You know what else is still good in 20 years?  That debt judgment against you. So you got sued in Small Claims Court.  If you had nothing for a creditor or debt servicer to collect, then they still did not get paid and all they got was a judgment against you.  The thing is, that judgment is good for 20 years.  Your creditor or debt servicer can collect at any time during those 20 years.  That is a good deal for creditors and debt servicers…not so much for you. The other thing is, once you have a money judgment against you, the collection can happen with fewer symptoms than a heart attack.  You wake up one morning and the money in your bank account got disappeared.  They can garnish everything in your account up to the amount owed without prior notice.  Again, a good deal for creditors and debt servicers…not so much for you, especially if you were trying to pay rent that day. Everyone should pay their bills, but you have to be able to stay in your home, feed yourself, and put gas in […] Read More

Key to Bankruptcy

The key to avoid Bankruptcy is to pay all your bills, have perfect credit, and kids with straight teeth…we cannot all live at Walgreens. The key to Bankruptcy is to get all the other issues in your life resolved.  Do you need time for a mortgage modification to go through, and are you going to have the cash flow to support it?  Are you starting a new job that will bring in a regular income?  What are your goals and what are you doing to address them? “Bankruptcy” is best used as a term of recovery rather than an act of desperation.  It can give you a fresh start or reset.  Sometimes it is easier to rebuild credit from zero rather than to spend years paying off all the creditors.  Depending on your circumstances, Bankruptcy can help you rebuild quicker—it stops the bleeding and starts the healing. Bankruptcy is not for everybody.  There are consequences you need to know and understand before you enter Bankruptcy.  Seek competent legal counsel to discuss the specifics of your situation and whether Bankruptcy is the best strategy for you.   Read More