When Old Debts from the Past Come Back to Haunt You

 Do you have old debts in the past that you haven’t paid and are wondering if the creditors can still come back now and collect from you after so many years? This is a common question that I am often asked.
As a bankruptcy attorney, I see a lot of people in this situation. At some time in their lives, they messed up and failed to live up to their financial responsibilities which resulted in delinquency and legal actions by creditors. Most have gone through a difficult time in their lives such as a divorce, a failed business, sickness, disability or unemployment.
Years later, just when things are finally starting to get better, the unthinkable happens.
They get hit with a lawsuit, a judgment, a wage garnishment or they are shocked to find out that their bank account just got frozen. How are they going to pay the bills this month especially if they are living paycheck to paycheck? The day that this happens is not a good day.
I also see this situation when someone with past debt problems are trying to buy a house or a car. While their credit score may be good enough to qualify for a loan, the bank wouldn’t touch them once they pull the credit report and see judgment liens and other unpaid debts on their credit report.
This is when people realize that they should have taken care of their debts sooner than later.
Unfortunately, the situations I described above may be the very “jolt” that most people need to finally wake up and do something about their debts. But why wait until this happens? As I always tell people, debt problems only tend to get worse if they are ignored. The consequences may be more severe for you later. Example: Someone recently consulted with me regarding a judgment obtained against her 8 years ago. Due to added collection costs, attorney fees and interest, the judgment amount has almost doubled, and this is now what the creditor is trying to garnish from her paycheck! Ridiculous, I know.
Do all creditors sue? Not necessarily. It depends on the amount and on whether the creditor believes the judgment is collectible after obtaining a judgment. But don’t assume that they won’t. Another situation I see is that some people have moved so many times in the last few years and they weren’t even aware that the creditor had sued them and obtained a judgment. They only find out years later when they get that notice from their employer saying that their wages are being garnished.
Ray Bulaon is a bankruptcy attorney in Valencia who has successfully helped more than 5,000 clients in getting out of debt. For a free consultation, call 866-477-7772 or 661-775-4880.