Many people facing expensive unpaid judgments wonder if bankruptcy can help them escape the costs of these judgments. Depending on the situation, some unpaid judgments could have the potential to be discharged in bankruptcy. Finding out when this might be possible could help you start taking steps to escape the costs of your unpaid judgment. Consult with a Chattanooga bankruptcy attorney to learn more.
When Can Bankruptcy Discharge Unpaid Judgments?
Knowing when bankruptcy discharge does not work can be just as important as knowing when bankruptcy discharge can work. Certain situations and types of debt will not allow a bankruptcy discharge. Types of unpaid judgments and related debts that cannot be discharged in bankruptcy include:
Alimony payments or spousal support
Child support payments
Personal injury lawsuits
Personal injury lawsuits that cannot be discharged are those that involved injuries caused by drunk driving or substance use. In other words, courts are less likely to discharge the debt owed for personal injuries caused by reckless or harmful choices and actions. This is why situations related to fraud also prevent people from successfully filing for bankruptcy.
Any money or property obtained by fraud may not be discharged with bankruptcy. A bankruptcy discharge also only applies to debts that existed before filing for bankruptcy. Debts accumulated through unpaid judgments after the date of filing for bankruptcy may not be discharged in bankruptcy.
You might be wondering when bankruptcy can help you escape unpaid judgments. In terms of bankruptcy and default judgments, bankruptcy can sometimes delay or stop a judgment. However, this might be limited to a temporary blocking of the judgment.
Bankruptcy can help you temporarily escape the effects of a default judgment for creditors. In other words, you will have a break from dealing with a bank account freeze, wage garnishment, or interest rates while filing for bankruptcy. When the bankruptcy case goes through, you may still have to pay the default judgment from creditors when you have real estate.
Alternatives to Deal with Unpaid Judgments
Do not panic if bankruptcy may not help you escape an unpaid judgment. There are legal options for unpaid judgments that may help lessen their impact on your finances. Consider asking a lawyer about ways to negotiate a settlement with the creditor. This could gain you access to a more affordable payment plan with a lower interest rate.
A lawyer can also help you work with a judge to cancel a judgment against you. This opens up the option to file a defense in your favor to offset the judgment. In some situations, a similar outcome may happen if you can prove that you need your current money for basic life necessities. These usually include food, water, and shelter.
Call Tom Bible Law for Legal Help
You may not have to deal with an unpaid judgment. All you have to do is call us today at Tom Bible Law by dialing (423) 424-3116 for a consultation about your legal options. Our experienced team of Tennessee bankruptcy lawyers might be able to help you escape unpaid judgments through bankruptcy. We serve clients throughout the Tennessee cities of Chattanooga, Kingsport, and Tullahoma.