Legal Question in Credit and Debt Law in Pennsylvania

It depends on your assets and circumstances. If they are just in the lawsuit stage, you have options. If you have a lot of debt, consider filing bankruptcy if you are relatively young and will be needing credit (house purchase or re-fi, car loan etc.). If you are elderly ,on a fixed income, and will not be needing credit, then bankruptcy may make no sense.

If you have a legitmate defense (debt is barred by the statute of limitations, debt is not yours, you owe less than the complaint says or if the debt has been sold and proper documentation is not attached to the complaint), it may make sense to litigate and get up with an attorney ASAP as you only have 20 days from the date you received the complaint in which to respond. Many attorneys will provide a defense (Attorney Greg Artim (http://www.gregartim.com) is one such an attorney that I know of at Law Guru but I am sure there are others).

If you have no legitimate defenses (this is your debt and there is no statute of limitations defense) and can't file bankruptcy for whatever reason, then the credit card company is going to get a judgment against you regardless of whether an answer is filed or not - its just a question of when.

Nobody likes having them but judgments are not the end of the world. I have many Pennsylvania clients that have had judgments entered against them. It is the aim of my clients to get these judgments resolved, but on a timetable that benefits my clients, not the creditors. However, much will depend on your assets. Pennsylvania provides no homestead exemption. However, if there is a mortgage on the property and it is jointly owned by the spouse or another party, the creditor in all likelihood will not execute on the judgment and force a sale of your home. If you have a motor vehicle that is still being financed or owned free and clear but worth very little, that is probably safe as well. IRAs, 401(k)s, retirement/pension, Social Security, workman's compensation or unemployment are all safe too. There is no wage garnishment for a credit card debt. If you get regular wages, you cannot keep more than $300 in the bank or the creditor will levy (seize) your bank account. While there also is no protection in Pennsylvania for furniture, it is unlikely that the sheriff will order this to be sold. Creditors want money, not your used furniture.

If this happens, most creditors will be willing to work out a payment plan of 1% to 2% of the debt (on average ) whereby you pay and as long as you do the creditor will not seize your possessions or bank account. However, this should only be considered in extenuating circumstances.

Judgments earn interest at a rate of 6% per year and will only get bigger. Judgments on real property can be revived every 5 years; judgments on personal property are good for 20 years. What this means is not that they automatically go away; they don't. It only means that if the judgment is not revived or after 20 years, it can no longer be enforced by seizing your bnk accounts or possessions or by selling your land. So the judgments do need to be resolved.

If you want to discuss your options in confidence, I give free email consults and can give better advice if I know your specific circumstances and the identity of the creditor and amount of the debt. Please contact me at [email protected] to learn more.