Debt collection: What happens when an old judgment is revived?

When a creditor sues you and obtains a money judgment, it is up to that creditor to collect on that judgment using the procedures available to them through the courts. Sometimes judgments are not collected and there might not be any collection activity for a period of years. There is a statute of limitations period in which time a creditor must collect on the judgment or else the right to collect goes away. If, however, the creditor files a petition with the court to renew the judgment, it can be enforceable against the debtor for the next statutory period of time.

To the extent a judgment against you can be renewed over time, you may be asked to pay a money judgment from many years ago, at some point in the future. When creditors have money judgments they often sell or contract with a collection law firm or company to collect the amount due through use of the court’s authority to seize bank accounts, garnish wages, seize assets and otherwise compel the sale of property to satisfy the debt. Only an automatic stay through the bankruptcy laws can stop collection efforts.

If you get a notice or credible threat that your money, assets and property could be seized, a bankruptcy lawyer can help stop the collectors.

Filing a petition for bankruptcy relief creates a set of rights and duties among debtors and creditors. The automatic stay provision in the bankruptcy code prevents creditors from contacting you or engaging in debt collection activities while a bankruptcy case is pending and ongoing. If the holder of the money judgment continued threatening to or engaging in activity to seize your accounts or assets they would be in violation of the automatic stay provision, and in violation of federal bankruptcy law.

Click to learn more from Joseph Wrobel, Ltd. from the sample of “automatic stay” articles in the blog library.

There are other options you could take if you decide the debt owed in the judgment is not substantial and bankruptcy is not your current plan of action.

If the creditor trying to enforce an old judgment does not have “standing” which generally means, the legal right to sue and use the courts enforcement abilities, the old judgment might not be effective against you. In many cases debts are bought and sold like any other assets, and the person claiming you owe them money might not have the proof that they rightfully own the debt they say you owe them.  Making the debtors prove they are trying to collect on a valid judgment they have the right to enforce is an important part of a lawyers job, defending their clients against potentially bogus creditor claims.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney today.