Creditors are no fun here in Arizona, and presumably elsewhere. And when attorneys represent creditors, they always take the position of the Men In Black when they were impersonating FBI Agents: "We have no sense of humor that we are aware of."
But when a creditor gets a judgment, he loses all sense of proportion.
He starts to think he ought to get PAID! Clearly, he goes too far!
And he takes action in an effort to get paid. For one thing, judgment creditors file the judgment in the county where you own real estate (that's your house) and the judgment thus becomes a judgment lien on your house!
It can sometimes be scraped off in a bankruptcy, on the theory that it impairs your homestead exemption, but that'll cost more in legal fees and costs, and nothing in Court is ever certain. Lawyers are taught to be able to argue any position that doesn't make their heart actually stop with embarrassment. That leaves a lot of latitude for argument in a Bankruptcy Courtroom.
A judgment creditor will also notice a debtor's exam, which is a procedure where the judgment debtor is questioned under penalty of perjury, and probably after an electronic asset search of some sort has been done. A debtor has easy choices: tell the truth and lose assets, or lie and deal with the consequences of perjury.
Most people can't lie well, and nobody ought to lie, ever.
Makes debtor's exams interesting, no matter which direction the debtor decides to go.
The creditor will always want to garnish wages and bank accounts, because that's money, not a boat that has to be sold. Makes the whole process easier.
So after you pay Mom the half million dollar preference payment, and you're waiting the year and a day before you file your Chapter 7 Bankruptcy in Arizona, try not to let a judgment be taken against you.
It can complicate your life, and your bankruptcy.
P.S. did I explain how a judgment is treated when the judgment holder files a complaint to determine whether his judgment can be discharged? You can fight about whether it should be discharged, but you've probably lost the ability to fight about the AMOUNT of the debt. That's a bad thing.
Summary: some debtors suffer from clinical depression, which interferes with their ability to function well. Some are just folks not good at crossing ts and dotting an i. In either case, the debtor is not well served to twiddle thumbs when the debtor gets sued. And an Arizona bankruptcy lawyer would rather the debtor did not permit a judgment to be taken against the debtor prior to the filing of a bankruptcy in Arizona.
