Credit card judgments are like ticking time bombs: You never know when they're going to go off.
For many consumers, bankruptcy is the best way to diffuse this potentially disastrous situation.
As consumer debts grow, more lenders are choosing to obtain judgments against defaulting borrowers.
With a judgment, lenders and their bill collectors are granted the legal ability to garnish wages or seize property.
In most states, a judgment remains enforceable for up to 10 years. That means that your lender can decide to execute a judgment at any time. If you have a judgment on your credit report, you'll always be at risk - and the odds of legal action only increase with time.
Since it costs money for lenders to obtain a judgment, you can bet they won't want to squander additional dollars to have an existing judgment renewed. If you've had a judgment against you for a while now, there's a good chance debt collectors are preparing to take action soon.
Of course, the simplest way to protect yourself is to pay down debt. If possible, contact your creditor and either agree to make payments or attempt to negotiate a settlement. Make sure to get your agreement in writing before you pay a dime.
For many folks, however, making payments is easier said than done. If credit card debts have spiraled out of control, it may not be feasible to get current without help.
But just because you can't afford to pay your delinquent debts doesn't mean you can ignore them. Living in denial doesn't just prolong your financial problems; it actually worsens them as late fees, high interest rates and legal actions accumulate.
Unpaid debts have a way of touching nearly every area of your life. Whether it's finding a job, getting a loan, or holding your family together, your success may hinge on how you handle your financial obligations.
By filing for bankruptcy, you can prevent a creditor from executing a judgment - and wipe out the debt that put you at risk for legal action in the first place.
If you can't afford to pay your debts, how will you manage to get by when creditors start seizing your hard-earned money? Bankruptcy protects your paycheck from wage garnishment and saves you the embarrassment of giving your employer a glimpse into your private financial life.
The only thing certain about debt is that it will never go away on its own. Bankruptcy has the power to protect your privacy and possessions, stop creditor harassment and start you down the path to financial freedom, once and for all.