I noticed that there were two articles in yesterday’s New York Times related to bankruptcy.
First, that the number of personal bankruptcies has climbed to its highest level since the 2005 reform act was passed. Click here.
Second, that on top of this awful economy, debtors in many states are dealing with the harsh reality of wage garnishment. Click here. Though we are very lucky that Texas law does not permit wage garnishment, I still advise my clients to answer any lawsuit filed against them. The debtor may be able to work out a better deal after answering, and if a lawyer answers, the debtor might even win the case or resolve it on quite favorable terms. Also, a judgment allows the creditor to attach non-homestead property, garnish bank accounts and tax refunds, and force the debtor to answer post-judgment discovery. A bankruptcy filed before the judgment is entered stops the judgment from being entered. It’s best, though, in that scenario to consult with an experienced Texas lawyer who could review your assets and plan carefully for the bankruptcy filing.
