Plaintiff was awarded judgement in a debt collections case

Submitted by dotHack_Effect t3_11dnga7 in personalfinance

I was recently involved in a court case in Texas where the collector was awarded judgement. I do not own property other than furniture in an apartment that I rent, and I own a vehicle as well. I believe that what I do have falls under "judgement-proof" so that cannot be taken. I've read about collectors seizing bank accounts to take money from there, but other than that, do I have any options left? Can I still try to pay the debt that I owe, even if it's a lower amount?

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Knipfty t1_ja9sito wrote

You lost. You didn't pay the debt when you had the chance, and now owe it plus fees and interest. Best to speak to the collector and arrange a payment schedule. And stick to it.

They can also garnish your wages.

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Fubbalicious t1_ja9ziyx wrote

Sorry to say this to you, but once they get a legal judgement against you they can use that judgement to lien your bank accounts and other real property (eg. house, car, etc). I would suggest working out a payment program with them so they don't start garnishing your wages or lien your bank account (especially at inopportune times like when rent is due), that way you can at least keep excess money in the bank without risk versus trying to live as a cash only nomad with nothing in your name.

As a general warning to others, once creditor gets a judgement against you, it's too late to even file bankruptcy since that debt will stay with you so long as they keep renewing the debt--which they can do indefinitely. Also depending on the laws of your state, you may also owe compound interest on this debt if it's not being regularly paid off.

If you ever get into a situation where you're unable to pay your creditors and they are threatening legal action, SEEK legal help immediately. If you were eligible for bankruptcy, you could have filed bankruptcy before the judgement and depending on that debt, it would have been discharged.

In any case, it doesn't hurt to reach out and try to get an offer in compromise. They may settle for a lower amount than what is owed or will be owed with interest/penalties, but with the judgement they really don't need to. Since you have nothing to lose for asking I would at least try.

Edit: I also should mention that judgement proof generally means that the person who has a judgement against them will not have any assets worth the plaintiff's time to go after. Depending on your age and your future earning potential and whether you want to go through the rest of your life with no bank account or assets in your name and how aggressive the plantiff is in going after you, you may or may not be judgement proof. So in other words, if you make barely any reportable money, live only on physical cash and avoid putting anything in your name (eg. home, cars, etc), then yeah I guess you're judgement proof. If you have any aspirations to move beyond that, then that judgement will hover over your head until it's paid.

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dotHack_Effect OP t1_jab4crp wrote

Thank you for your response, I'll definitely get in touch with the creditor as soon as possible. It's definitely a HUGE lesson learned; hopefully it won't get any worse than it already has... Talk about learning lessons the hard way.

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kindkel44 t1_jab6i76 wrote

A judgment in Texas lasts for 10 years and it can be renewed. You might be judgment proof now but they are hoping your financial situation will improve. Your wages CANNOT be garnished for consumer debt. They can, however garnish your bank account. This includes any joint bank accounts. If you contact the firm that sued you, they will work out a settlement with you. You get better deals with lump sum settlements, but payment plans are also an option. Here is more information. https://texaslawhelp.org/article/what-judgment-proof-means

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Hambarker t1_ja9qfac wrote

I think you're best served by consulting with an attorney if you can afford one.

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