A reaffirmation is an official way to “reobligate” yourself on the loan. This involves the lender sending us a reaffirmation contract to be signed by you.
How Long Does Someone Have To Respond To The Lawsuit Notice?
You have 20 days to respond to the lawsuit notice. You are not going to get a notice from the court that sets a hearing date. Once you are served with the summons and claim, you have 20 days to respond to it. If you do not, then legally the plaintiff is entitled to get a default judgment against you. If you don’t take steps to exercise your rights within that 20 day period, you might be facing a default judgment and a potential garnishment from that point forward.
What Actually Is A Default Judgment ?
The judgment is an ultimate resolution of a case. It’s the court saying, “Here is who is entitled or not entitled to their claim in the lawsuit.” In Minnesota, once the 20 days pass, the court assumes that there was no response because there was no defense to present, i.e., you had no rebuttal to the plaintiff’s allegations. The law is set up at that point to say that the plaintiff wins by default. Then there are grounds for the plaintiff to get that judgment; and once that is entered, that empowers them to garnish 25% of your wages or money in your bank account up to the full amount of the judgment.
What Recourse Do I Have To Stop Garnishment Of My Wages?
You essentially have four options if you are being garnished. Your first option is avoid the garnishment because you qualify for an exemption. Examples of exemptions include if you have received some kind of assistance based on need, such as food assistance, medical assistance or some other sort of assistance within the past six months. Your garnishment paperwork must be resubmitted by the creditor every 70 days. Every 70 days the creditor has to file a new notice of intent to garnish wages on your employer, and you have to be given another exemption form to determine if some of the exemptions apply.
Another exemption is if you earn less than $290 a week. If none of these exemptions applies to you, then unfortunately, you cannot claim the exemption. If they do, you have to complete the form and send it back to the creditor within 10 days. If they don’t receive it within 10 days, they can go through with the garnishment. If you missed the 10 day deadline, you can petition the court for a hearing to have the court overrule the garnishment on the grounds of an exemption. It’s time consuming, and it can actually be pretty costly too. It’s difficult to do, but it’s certainly an option.
The second option is an attempt to settle the matter with the creditor, but you lose quite a bit of negotiation leverage once they have the ability to garnish your wages. You might try to work out a monthly payment plan with them; but if they are already getting 25% of your income, it’s very difficult to negotiate a settlement where they are taking less than that. You might be able to settle with them in terms of a lump sum payment. For example, if you are getting a tax refund or something similar, then you could pay down some of the debt and settle it that way.
Another option is to attempt to vacate the judgment through the court. You are essentially asserting your defense after that 20 day deadline has passed. It requires making a motion with the court, briefing an argument and attending a hearing to argue to the judge that it is unjust that you have this judgment against you because it is inappropriate. It is difficult to vacate the judgment because you have to convince the judge that A) you have a defense to plaintiff’s claims and would have had a good chance of winning the lawsuit; and B) your failure to present those defenses within the 20 day deadline should be excused for a particular reason. Note that ignorance of the law is not a defense. This can be a costly option.
Finally, the fourth option is to file bankruptcy protection. On the date your bankruptcy case is filed, the court issues an automatic stay. An automatic stay prevents any type of collection action from your creditors, and this includes creditors who have a judgment against you. The garnishment is stopped on the date your Chapter 7 or Chapter 13 bankruptcy is filed. Actually, for a lot of our clients, we are able to recover some of the wages that were garnished in the 90 days prior to filing their bankruptcy. Bankruptcy can be a very powerful tool to stop the garnishment from proceeding.
For more information on Response To Lawsuit Notice, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling today.
Chapter 13 is essentially a payment plan that you organize through the court system. Think of it as a consolidation loan with teeth.
There are 2 things you must do after your case is filed: (1) attend the meeting of creditors (aka the 341 hearing); and (2) complete a debtor’s education course via phone within 75 days from the date your case was filed. The 341 hearing is sometimes referred to as the meeting of creditors because your creditors can attend the meeting and ask you questions about the information contained in your petition.