If you've fallen behind on payments, and a creditor's attempts to collect on the debt have been unsuccessful, they might choose to take legal action. But does this mean it's too late to address the issue? Is there anything you can do to prevent a lawsuit from being filed and stop judgements against you? What are some actionable steps one can take when confronting this type of situation? Consider the following information to avoid future issues.

3 Tips for Stopping a Creditor Lawsuit

1. Reach Out Directly to the Creditor

Clear and open lines of communication between your creditor and yourself could possibly avert a lawsuit and stop judgments before they are reached. Contact them directly, and calmly and rationally explain the situation that led to the money problems and your inability to make payments. But don't make that the focus of the conversation. Instead, steer the discussion toward solutions. Let them know you want to make good on your obligations, and you are willing to do what it takes to repay what it is owed. If you aren't able to pay the balance in full, suggest a payment plan that is doable for your current financial situation. The creditor may be more amenable than you might imagine.

2. Fight the Lawsuit

If the first option fails, consider fighting the lawsuit. To be as prepared as possible and to ensure your rights are protected, hire a lawyer who focuses on providing debt help, someone who has experience dealing and negotiating with creditors. It's important to remember that just because a creditor is taking legal action doesn't necessarily mean they will win their case. To have the best chances of an outcome in your favor, enlist the help of a lawyer who understands the intricacies of litigation, negotiations, and settlements.

3. File for Bankruptcy

Filing bankruptcy should be a last resort after all other options have failed. As soon as you file, an automatic stay will prevent the lawsuit from moving forward in the courts. Bankruptcy isn't right for everyone--it will have lasting effects on your credit and won't discharge every single type of debt--but it's certainly worth exploring in order to stop judgements against you and regain some firmer financial footing.

If you're involved in a creditor lawsuit or are thinking about bankruptcy, trust the Law Office of James B. Mallory III to look out for you. Since 1984, Attorney Mallory has been representing Iredell County, NC, clients in all aspects of bankruptcies, foreclosures, and creditor lawsuits. Call (704) 872-1911 or visit him online to schedule a consultation, and stop judgements from wreaking havoc on your financial future.