Most consumers believe that the worst thing that can happen in a lawsuit is for a judgment to be entered against them. However, a judgment merely establishes the right for one party to collect money (or property) as a result of a court order. A judgment creditor still has to collect on the judgment, which is not an absolute guarantee.
If you have a judgment entered against you, there are several options to protect your property. This post will highlight them and briefly explain the benefits of each.
File an appeal – Parties on the losing end of a trial have the right to seek an appellate decision. Perhaps there were technical (legal) errors made by the court that had a substantial effect on the outcome of the case. If these errors are corrected, perhaps the outcome would be different. Also, a creditor could be barred from collecting on the debt while the appeal is pending.
File a bankruptcy petition – Seeking bankruptcy protection is especially important for businesses with judgments that exceed their assets. A bankruptcy can help in establishing a reasonable payment plan while the business continues in its operations. This may be a better option than an appeal depending on the circumstances.
Settling the debt – Even though a creditor may have a judgment, it may be willing to settle the matter for less than what was ordered. A settlement may be helpful given that a large down payment on the debt is more valuable today than payments (that may or may not come) in the future.
It would be prudent to discuss each of these options with an experienced attorney so that you may make an informed decision.