When you fail to repay your credit card debt, a lawsuit may be filed against you by the credit card lender. Such a lawsuit often results in the creditor winning a judgment against you, despite the opportunity you are given to present your side of the case in court. The judgment will give the credit card company additional power to obtain the money you owe them. They will be able to garnish your bank accounts and wages, and place a lien on your real estate or other property. Thus it will become impossible for you to sell the property without paying the debt first. Another significant affect of a credit card lender winning a judgment against you is that the debt you owe will become secured.

In Chapter 13 bankruptcy cases a secured debt is given a higher priority than an unsecured debt in terms of repayment.  Therefore in a Chapter 13 bankruptcy, secured debts are paid first and in full, before any unsecured ones. Unfortunately, this could mean you would have a larger monthly payment throughout your Chapter 13 bankruptcy. If you are facing such a lawsuit it is important that you contact a bankruptcy lawyer as soon as possible. They should be able to help you by filing bankruptcy immediately. In this way an “automatic stay” will be instituted which will stop the lawsuit and any other collections activities by creditors against you. Then the creditor will be unable to obtain a judgment against you and your debt will remain unsecured.

If you live in Denver, Aurora, Arvada, Brighton, Broomfield, Commerce City, Englewood, Highlands Ranch, Lakewood, Lafayette, Littleton, Northglenn, Westminster, Wheat Ridge, or Golden, Colorado, please feel free to contact me with any questions.  

Kevin D. Heupel, Colorado Bankruptcy attorney, 303-955-7570, COBankruptcyHelpEmail, free-consultation form.