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February 2015 Archives

Can Creditors Collect a Judgment Lien during Bankruptcy?

When an individual files for bankruptcy protection, he or she may have judgments against them. Some of these court judgments awarding certain sums to judgment creditors may have been secured if the judgment creditor took the steps necessary to file judgment liens in the counties where the bankruptcy debtor owns property. Once the debtor files the bankruptcy case, can the judgment creditor still enforce the judgment lien? Can that creditor collect the amount due under the judgment?


For many individuals or sole proprietors preparing to file for bankruptcy, Chapter 7 is the preferred choice. Filing for bankruptcy under Chapter 7 allows an individual or sole proprietorship business to discharge most debts in exchange for the liquidation of nonexempt assets, the proceeds from which are used to pay creditors. Not all assets must be liquidated under Chapter 7, however. If you are considering filing under this chapter, it's important to understand which types of property will be exempt during the process. 

Enforcement of Judgments in New Mexico

When a plaintiff sues a defendant to recover monies owed by the defendant and eventually succeeds in winning the suit, an award of damages is incorporated in to the judgment of the court identifying the exact amount of the judgment and whether any court costs, attorney’s fees and interest may also be part of the judgment. (In the event interest is award, the court will state the rate at which it will accrue from a specified date.) But the mere rendering of the judgment in a New Mexico court does not, in and of itself, mean that the defendant will immediately take out his or her checkbook and pay the plaintiff the amount due under the judgment.

New Mexico Law on Garnishment Withholding

In the previous blog post, the question of whether filing bankruptcy can stop a garnishment collection was addressed.  As discussed, many types of garnishments can be stopped by the mere filing of a bankruptcy case because an automatic stay will effectively suspend, if not end, any such collection. However, recovery of some priority debts via garnishment such as alimony or child support will not be stopped by the automatic stay.

Can Filing Bankruptcy Stop Garnishments?

Garnishment actions represent one of the primary methods in which certain debts are collected. If a plaintiff (a person  company or governmental entity) sues an individual and obtains a judgment against that individual, the plaintiff can take additional steps to garnish the defendant’s regular wages. Separated and divorced spouses seek garnishment of wages from their ex-partners who owe back child support.  When a regular wage earner sees part of his or her pay check reduced by garnishment, can the wage earner file bankruptcy to stop the garnishment?

Kaiser Study Examines How Medical Debt Causes Distress Including Bankruptcies

At the beginning of last year the Kaiser Family Foundation issued a report examining how high medical bills can cause enormous financial problems leading, in some cases, to bankruptcy. The study identified seven features or themes which can explain why 1 out of every 3 Americans suffer severe financial consequences from high medical debt. The report finds:

The Difficulty of Eliminating Student Loan Debt via Bankruptcy

As the cost of college tuitions and related costs have soared over the last twenty years, about 1 out of 4 former students find themselves refraining from paying back their student loans at various times over the course of their loan repayment period. The prospect of getting out from under that particular kind of debt by filing for bankruptcy protection may clearly seem like an attractive option. But student loan debtholders need to be careful. Filing bankruptcy, whether it is a Chapter 7 liquidation or a Chapter 13 reorganization, may not necessarily solve the problems of the student loan debt.

High Medical Expenses Still the Biggest Drivers of Bankruptcies

The size and scope of debt created by medical expenses continues to be the biggest cause of bankruptcies in this country. According to a study by NerdWallet Health, a division of the price-comparison website, bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year. Nerd Wallet predicted at the time of the study - done in 2013 - that households with 1.7 million people will have sought bankruptcy protection.

Why Divorces Trigger So Many Bankruptcies

Divorces have and continue to be a common cause of personal bankruptcies. According to Clear Bankruptcy, of the 1.5 million people that filed for bankruptcy in 2010, about 8 percent of them did so because of the pressure caused by splitting up and divorce.  This begs the question why does this occur so often?

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