What assets are at risk for credit card debt?
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What assets are at risk for credit card debt?
I am being sued by a credit card company for $40,000. I owe the money but cannot agree to settle right now. They have informed me that I will need to accept “Agreement For Judgement” to work out a payment plan. I haven’t signed anything; only verbal communication. Suit is only in my name and I only have a personal account in my name. I am married and we own our own business. What is the worst that can happen? Should I speak to a litigation attorney about this? I’m in Camp County, TX.
Asked on October 15, 2010 under Bankruptcy Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
If you are sued and the credit card company wins--which they almost certainly will, if you owe the money--they will get a judgment in their favor. If you still don't pay at that point, they can use that judgment to go back to court and seek to garnish your bank account(s); put a lien on any real property you own; and also either put liens on other assets or possibly execute on assets (i.e. force a sheriff's sale of your property). The effect on your business will depend in large part on what business structure it is. If it's an LLC or a corporation, while they can attempt to act against your ownership interest--e.g. get an order that if you sell the company, the proceeds need to be applied first to your debt--they should not be able to go after the company itself. If the business is a d/b/a then it and its assets are your assets, and are as vulnerable as your personal property.
You should speak with an attorney--$40k at stake is well worth it. You may wish to consult with a bankruptcy attorney--that might be your best option.
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