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Advice about Civil Summons on Credit Card Debt - The Bills.com Blog
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Advice about Civil Summons on Credit Card Debt
Question: I was served a Civil Summons from the District court for a credit card that we quit paying on due to our finances. This is not the only credit card we had to quit paying on. My husband was layed off and I just had a baby. By the time we got on our feet our minimum payment were ridiculous. My question is If we filed Bankruptsy, would thesummons be revoked?
Answer: If you file for bankruptcy, then all ongoing cases against you will be put on hold. It does not mean that the summons will be revoked; rather it will be put on hold till the bankruptcy court determines if you qualify for chapter 7 or chapter 13. If you qualify for chapter 7, then in all likelihood, this debt will be dismissed along with the other qualifying debts. If you qualify for a chapter 13, even then, the court will decide on the payment terms for that debt.
Before you decide to file for bankruptcy, I encourage to speak to one of Bills.com's approved debt help providers to see what your available options are. You can do so by entering your information here: Debt Help Savings Quote
There are two basic types of consumer bankruptcy: Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, also called a liquidation bankruptcy, a bankruptcy trustee will examine your assets, and if you have any assets which
are not exempt, sell those non-exempt assets to repay your creditors. Once your non-exempt assets have been sold to pay your creditors, all remaining unsecured debts will be discharged by the bankruptcy court. Many people who file for Chapter 7 protection are able to keep all of their property because they have no non-exempt property. Each state has its own schedule of exempt assets, so you should consult with a qualified bankruptcy attorney in your state to find out if Chapter 7 is a workable solution for your situation. An attorney will also be able to tell you if you qualify to file Chapter 7 under the new guidelines enacted by Congress in 2005. You mention in your question that you may lose your home in bankruptcy, so it sounds like Chapter 7 was the bankruptcy chapter you discussed with your attorney. There is an alternative, though, in Chapter 13 bankruptcy.
A Chapter 13 bankruptcy, also called a "wage-earner's bankruptcy", allows you to propose a plan to repay creditors over time, usually five years.
Your monthly payment amount will be based on your monthly disposable income as defined by the bankruptcy code. After you have made payments to your creditors for five years, any remaining unsecured debts will be discharged. Chapter 13 is commonly used by debtors whose assets exceed the exemptions offered by state law. It is also used by many consumer debtors who do not qualify for Chapter 7 relief under the means test, which went into effect in 2005 with the Bankruptcy Reform Act.
If you are considering filing bankruptcy, you should consult with an attorney to find out if bankruptcy will benefit your financial situation. I encourage you to read more about bankruptcy at the Bills.com Bankruptcy Information page .
I hope you will be able to resolve your financial problems without the need to file bankruptcy.
I hope this information helps you Find. Learn. Save.
Good Luck,
Bill
www.bills.com/blog
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1. Posted by Martha on Monday 12th May 2008 06:59
My husband has been summoned to appear before a judge because he is being sued by Capitol One bank for a credit card he failed to pay because of financial problems. This debt already appears on his credit report. How can this suit against him affect him in the future and what is usually done when he appears before the judge. Thanks,Martha
2. Posted by Bill on Monday 12th May 2008 08:16
I agree, the delayed payments may have already caused his credit to go down, but it is imperative that he finds himself an attorney to represent him or do it himself and appear at court because he still has an opportunity to present his case before the Judge who might be sympathetic to your situation and will work out a settlement without a judgment being passed. On the other hand, if you do not do anything, the court will pass a default judgment against you for non-appearance and that judgment will be reported on your credit report possibly for the next ten years or more depending on your state laws and that will make your husbands credit look much worse than what it is right now. That is apart form any wage garnishments or liens that might be awarded as part of the judgment.