I HAVE BEEN SERVED WITH A LAWSUIT BY PORTFOLIO RECOVERY ASSOCIATES. I DON’T KNOW WHAT TO DO.
When you get served with a summons and complaint, you should not ignore it. Once a creditor gets a judgment, it is good for 20 years. They can try to garnish your wages, or levy your property. If you own real estate, a judgment will attach as a lien on your real estate.
If you have a defense to the complaint then you should get counsel to represent you. However, if you are like a lot of Mr. Taieb’s clients who owe Portfolio Recovery money, then you should file a bankruptcy to get the stay into effect. The bankruptcy stay stops all types of proceedings against you. It is automatic. Only in rare instances where a debtor has filed numerous bankruptcies in the last year, the stay will not apply. Thus, if the creditor already started a wage garnishment or is ready to levy on your property, the bankruptcy stay will stop the creditor. Many of Mr. Taieb’s clients are also served with information subpoenas. This form wants all your financial information so that the creditor knows where you have assets. If you don’t respond to an information subpoena, they can issue a warrant for your arrest where you have to appear before a Judge. Once the bankruptcy stay goes into effect, it stops any action by the creditors including the potential arrest for not responding to an information subpoena.
If you have minimal assets or a home with minimal equity where you are current on the mortgage, you can file a Chapter 7 as long as you are under the median income. New Jersey has one of the highest median incomes in the nation. However, the one thing you must be cautious about Chapter 7 is that you are only allowed to keep so much property. Thus, if you have substantial furnishings or jewelry, which is above the exemptions, then a Chapter 7 trustee can sell the property or you have to buy out the trustee.
Understanding the exemptions is crucial since they protect your property so the bankruptcy trustee can’t sell your property. Even if you qualify for a Chapter 7, but have non-exempt or non-protected property, the trustee can sell your property or you must buy the trustee out. Mr. Taieb recently had clients who had substantial whole life insurance so they had to buy out the trustee to protect themselves from having him cash in the life insurance.
Also, if you need to reorganize due to a foreclosure or repossession you would want to file a Chapter 13. This would stop the lawsuit and also allow you to reorganize your debt.
Finally, if you are above the median income, you must do a Chapter 13. Please contact TAIEBLAW to see which chapter applies to you.
Steven N. Taieb, Esq. is here to help you and is a South Jersey Bankruptcy Attorney who has helped over 7000 people with their financial problems for the past 32 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.
We are more than happy to discuss all your options and to see if bankruptcy is the best option for you.