Real property is unique in the eyes of the court, therefore, specific performance typically arises in these types of transactions. Specific performance is asking the court to force the opposing party into a contract that obligates them to honor the contract at issue, rather than awarding money damages. For example, a buyer can force a reluctant seller to perform the purchase sale agreement.



These are the requirements for the lawsuit:

  • Terms must be certain: Essential factors include identifying: (1) the seller, (2) the buyer, (3) the price to be paid, (4) the time and manner of payment, and (5) the property to be transferred.
  • The buyer paid adequate consideration and the contract was just.
  • The plaintiff must have performed the agreement.
  • The defendant must have breached the agreement.
  • A money award must be inadequate.

When a party wins a Specific Performance lawsuit, the court will order the sale of the property at the price and terms agreed upon. Moreover, the victorious party will also be entitled to a judgment for the rents and profits from the time he was entitled to the conveyance under the contract.

When a purchase and sale deal starts to go wrong, seek legal advice. While the other party may have breached the agreement, the wrong response (i.e., refusing to perform your obligations) can destroy your chances for success in the lawsuit.

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Wage garnishments are stopped instantaneously… except that different state laws and procedures can effect what happens to the current paycheck.

Bankruptcy is a federal proceeding governed by federal law, but state law often plays into it as well. This question about stopping wage garnishments is a good example of the mix of federal and state law.

Except in rare circumstances (mostly involving income taxes and student loans), your wages cannot be garnished for repayment of a consumer debt before the creditor sues you in court and gets a judgment. That lawsuit will almost always be in state court, because the jurisdiction of federal courts is limited. The vast majority of the time debtors do not respond to such lawsuits by the legal deadlines, so the creditors win their judgments by default. Once your creditor has such a state court judgment in hand, it must then follow state law in collecting on it.

But states’ garnishment laws vary widely. Most states permit wage garnishment in some form, but a few restrict it to only very select kinds of debts (like child support, taxes, and/or student loans). Other states which do allow wage garnishment for conventional debts often have special garnishment statutes favoring some of those same select debts. State laws also differ on what part of a paycheck is subject to garnishment compared to the part that is “exempt,” or protected. And laws differ on the details of garnishment procedure, which can become critical as we return to the topic of this blog—how fast a bankruptcy stops a garnishment.

The moment your bankruptcy is filed, the “automatic stay” goes into effect. The filing itself operates as a “stay,” or a stopping, of virtually all collection activity. It operates as an immediate and one-sided court order against creditors, made effective by the very act of filing the bankruptcy case.  So the bankruptcy filing and the automatic stay stops a wage garnishment in its tracks.

But what if the bankruptcy is filed within just a day or two after the money has been taken out of your wages under a state court garnishment order but not yet turned over by your payroll office to the creditor? What does the Bankruptcy Code’s automatic stay require here when it says that the bankruptcy filing stops “the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the [bankruptcy] case”? (Section 362 (a)(2) of the Bankruptcy Code.)  Money that was taken out of your paycheck before your bankruptcy case was filed is not “property of the estate,” which consists of all your assets as of when your case is filed. But arguably it’s not your money either as of the time when your case is filed because it was already legitimately taken from you by the garnishment order. So can the creditor get that money that your employer is holding, or would that be a violation of the automatic stay?  

Because different state laws may have different answers to the question of who owns money that has been garnished from your wages but not yet forwarded to the creditor, whether the automatic stay prevents that money from going to the creditor can turn on those different state laws.

Overall, reputable creditors tend to be cautious about violating the automatic stay, and so will usually err on the side of caution to prevent doing so. But other creditors may be more willing to be aggressive, especially if the state’s statutes and/or courts have given them some cover to do so.

The bottom line is that your experienced bankruptcy attorney will be able to tell you two things:

1) what the interplay between the bankruptcy code’s automatic stay and your state’s garnishment law means for a particular paycheck of yours; and

2) whether your specific garnishing creditor tends to be cautious or aggressive about garnishments stopped by bankruptcy.

Many judgments against you don’t matter once you file a bankruptcy. But certain ones are very dangerous. How can you tell the difference?

Letting a creditor get a judgment against you after it has sued you can sometimes result in that debt not being written off (“discharged”) in a later bankruptcy case. Or that debt may instead become much more difficult to discharge, even if eventually it is. But in the meantime it can turn an otherwise straightforward case into one much more complicated. 

So how can certain judgments make a debt not dischargeable? Because of a basic principle of law which says that once one court has decided an issue, another court must respect that decision. The theory is that litigants should only get to use court resources once to resolve a dispute. Once a court decides an issue, it’s been decided (except for the limited exception of appeals to a higher court).

But as I said, most judgments by creditors are NOT a problem in bankruptcy. That’s because most creditor lawsuits are about only one thing: whether the debt is legally owed. A judgment that establishes nothing more than that can generally be discharged in a subsequent bankruptcy.

The judgments that are dangerous are more complicated. They arise in lawsuits in which the creditor is alleging that the person owing the debt incurred it in some fraudulent or inappropriate way. If the judgment clearly establishes that’s what happened, then the bankruptcy court later has to accept that decision. If the wording of the lawsuit and judgment shows that the behavior was of the kind that the bankruptcy laws say results in the debt not being discharged, then without further litigation the bankruptcy court would rule the same way.

These cases can get complicated because often it’s not clear precisely what the previous lawsuit decided, or whether what was decided meshes closely enough with the dischargeablility rules of bankruptcy. There’s also the question whether the matter was “actually litigated” if the person against whom the judgment was entered did not appear to defend the lawsuit or did not have an attorney.  In other words you may or may not be able to get your day in bankruptcy court depending on whether in the eyes of the law you really already had your day in the prior court.

This risk of losing your chance to defend your case in bankruptcy court can be avoided by not waiting until after a judgment has been entered against you to see a bankruptcy attorney. That is especially true if the allegations against you involve any bad behavior other than not repaying the debt. As a general rule, if you get sued by any creditor you should see an attorney, even if you don’t plan on fighting the lawsuit and hiring an attorney for that purpose. That allows you to find out if the lawsuit could lead to a judgment making the debt not be dischargeable in a bankruptcy. And if so, you would then still have to option of filing the bankruptcy to prevent such a harmful judgment from being entered, instead of being stuck with it once you file a bankruptcy later.

Sometimes the timing of your bankruptcy filing hardly matters, but other times it’s huge.  The three examples in this blog should convince you that you want to avoid being rushed to file your case because a creditor sued you earlier and is now garnishing your wages. Instead you want to preserve the ability to file bankruptcy at a time that is tactically the best for you.

1. Choosing between Chapter 7 and 13:  Being able to file a Chapter 7 generally requires you to pass the “means test.” This test largely turns on a very special definition of “income.” For many people, their “income” under that definition can change every month, sometime by quite a lot. This means that you may not qualify to file a Chapter 7 case one month but then do so the next month. Being able to delay filing your case means being able to file when you will pass the “means test,” or at least more likely would do so, and therefore not be forced to file a Chapter 13 case. This means usually finishing your case in three or four months instead of three to five years, and almost always saving many thousands of dollars.

2. Discharging—writing off—debts:  Getting certain debts discharged is harder if those debts were incurred within a certain amount of time before the filing of your bankruptcy case. So being able to delay the filing of your bankruptcy case makes it less likely the creditor on one of these debts would challenge your ability to discharge that debt. Or if such a creditor would still raise such a challenge, defeating it would be easier.  The amount at stake is the amount of that debt, plus often the creditor’s costs and attorney fees, and your own attorney’s fees.  Avoid or reduce the risk of continuing to owe that after your bankruptcy is over by avoiding getting creditor judgments against you.

3. Choosing property exemptions:  The possessions you are allowed to keep in a bankruptcy depend on which state’s exemption laws apply to your case. If you moved to your present state of residence within two years before your bankruptcy is filed, you will not be able to use that state’s exemptions but rather your former state’s. Especially if you are getting close to the two-year mark, having flexibility about when to file would allow you to pick whichever state’s exemptions were better for you. Otherwise, you may either lose an asset in a Chapter 7 case, have to pay the trustee to be able to keep it, or else even be compelled to file a Chapter 13 case to keep it.

You may sensibly ask: if you do get sued, what are you supposed to do to avoid getting a judgment against you, so that you’re not later rushed into filling bankruptcy at an unfavorable time?  The answer: see a bankruptcy attorney as soon as you get sued to figure out how to deal with that law suit and with your entire financial circumstances. The earlier you get advice, the more options you will have.


What you don’t know CAN hurt you, if it’s a judgment against you by a creditor. Judgments can hurt in three big ways. 1) They enable the creditor to use powerful collection mechanisms against you to collect the debt. 2) A judgment can rush you into filing bankruptcy at a legally disadvantageous time. 3) And under some circumstances a judgment can make it harder to write off the debt in your bankruptcy.

I’ll tell you about the first one of these in this blog, and the other two in my next ones.

The vast majority of lawsuits by creditors and collection agencies that are filed to collect their debts end with judgments against the people owing the debts. That’s because the main point of these lawsuits is to establish that the debt is legally owed, which is usually not disputed. Also, much of the time the debtors are at the end of their financial rope and can’t afford to hire an attorney to find out what their options are, much less to defend the lawsuit. So judgments are entered “by default”—meaning the deadline for the debtors to respond passed without any action by them, allowing the creditor to get a judgment. Often debtors are not given any notice that a judgment has been entered against them, so many do not realize that it has, especially when nothing seems to happen for months or even years afterwards. And very few people are fully aware of the possible consequences.

Most people know that a judgment gives a creditor the power to garnish your wages and bank accounts. But preventing garnishments by just keeping your money out of bank accounts and not being paid a regular wage or salary are often not enough to make you “judgment-proof.” For example, a judgment usually becomes a lien against any real estate you own, or will own in the future. That includes not just property under your own name but also your rights to property held jointly with a spouse, parent, or through a trust or estate. An aggressive creditor has a variety of other tools available to it, including getting a judge to order you to go to court to answer questions under oath about what you own. The creditor can get an order to send out a sheriff’s deputy to your home or business to take your possessions to pay the debt. If you are owed money by anyone, that person can be ordered to pay the creditor instead of you. If you own a business, the creditor can force your customers to pay it instead of you, and sometimes can even come to your place of business and take money directly out of the cash register to pay the judgment debt.

I don’t want to give the impression that these kinds of strong-arm collection procedures are used in most cases. But I talk regularly with distressed new clients who have been surprised, and financially hurt, by what a creditor has done to them and their assets.

Beyond the direct damage a creditor with a judgment can do to you before you file your case, such a creditor can cause you very real problems in your subsequent bankruptcy case. I’ll introduce this here and then discuss it more in my next blog.

If you are induced to file bankruptcy quickly to stop an ongoing garnishment or other financially devastating collection activity, you lose one of your most important advantages: the timing of the filing of your bankruptcy case. A lot of what happens in your bankruptcy case turns on precisely when it was filed. Not having the flexibility to pick the best timing can, among other things, turn a hoped-for Chapter 7 case into a Chapter 13 one, can mean a difference of many thousands of dollars, and can generally turn a straightforward case which meets your goals into much more complicated matter.

My entire job can be summarized as helping my clients meet their goals as smoothly and calmly as possible. The lesson here is that, whenever possible, the time to see an attorney—and if you have overall financial problems, specifically a bankruptcy attorney—is right when you get sued. Not after a judgment has been entered and you’ve lost some of your precious power over your own destiny.