If you are unable to pay a debt, the creditor can file a lawsuit and, get a judgment against you. Once the creditor has a judgment against you, the creditor can garnish your wages, seize your assets, and require you to show up at court and answer questions about your assets.

However, If you file a bankruptcy case, it will immediately stop almost all collection activity and garnishments, even if the creditor has a judgment or is already garnishing your wages (the exception is a child support garnishment, which will not stop). Of course, you won’t be able to get back any money a creditor has already taken, but the creditor will not be able to take any more money or property after the day your bankruptcy case is filed.

If you can, file your bankruptcy case before a creditor gets a judgment against you. That way, you won’t have to deal with garnishments or judgment liens, and you won’t have a judgment on your credit report.