Can you negotiate a credit card debt if you are being sued? – Darby

Credit Card Debt

Can you negotiate a credit card debt if you are being sued?

—Darby

Yes you can negotiate and settle a credit card lawsuit. In some cases, if you cannot raise enough money to settle in a lump sum, you will be able to set up affordable payment arrangements to keep from being garnished, or your bank account levied.

 

Being sued for a credit card debt happens at different stages of collection.

 

Are you being sued by a collection law firm on behalf of your original creditor:

Lawsuits in the first stage of credit card collections (your account has never been sent to a debt collector) is not that common, but it does occur. Most of the time (but not all), you have at least 6 months of nonpayment before the risk of being sued begins. The risk of being sued increases incrementally from there. Your original credit card bank may target your account for placement with a collection attorney based on several factors. The following is not an exhaustive list, and not all that helpful to you (since you appear to already have been served a lawsuit), but others reading this later may get some benefit from it:

  1. The credit card is new, saw heavy use and was nearly maxed out, then payments were missed.
  2. The balance on the credit card is mostly made up of a balance transfer that was recently made (last 12 months, and with some creditors within the last 24 months).
  3. Recent purchases using  the card (last 6 to 12 months) make up a significant portion of the balance owed on the credit card.
  4. Use of a software package or manually identifying an account for placement with a debt collection attorney with authorization to sue because the account analysis shows you are paying other unsecured creditors (other credit card bills).
  5. Creditor collection trends and policies.

When negotiating a collection lawsuit on a credit card debt with your original creditor you can settle with a lump sum amount of money, or set up monthly payments you can afford on the balance. It is possible to get some of the balance negotiated down with lower monthly payments (time to pay), but that is not a frequent option in a lawsuit situation with your creditor.

 

If you want one on one support in a situation like this, we offer it to our members.

 

Negotiating and settling a credit card debt when you are being sued by a collection attorney representing a debt buyer is different.

Debt buyers buy defaulted accounts in bulk from credit card issuers. They pay different amounts for the legal rights to the debts they buy. The “fresher” the debt (6 to 12 months in default) the higher the purchase price. As defaulted credit card debts age, the less it costs to buy them. Credit card debts that get charged off by your original creditor are often bought and resold several times. The cost to purchase debts that have already been sold once or twice will be much less than was paid originally.

 

Debt buyers invest in unpaid debts and are taking a risk that they can get troubled credit card borrowers to pay up. Debt buyer collection has proven to be profitable. They don’t get people to pay on all of the accounts they buy. Not by a long shot. They only need to collect enough money on the portfolio to cover the cost of the purchase, the overhead to collect, and meet projected portfolio profits.

 

Debt buyers settle credit card debts they own for less than the total you owe on the account. They will either collect debts using in house debt collectors, assign accounts to a subsidiary collection agency, hire another debt collection firm, or place accounts with attorney debt collection law firms they have relationships with.

 

There are many debt buyers out there. Large and small. Some specialize in different areas of debt. For example, some buyers only buy up delinquent credit cards; some buy only medical bills, deficiency balances on repossessed auto loans, and with the housing market crash – some now focus on buying up defaulted HELOC and second mortgages. Credit card debt buyers and the debt collectors they hire will, more often than not, be identified from a list of “usual suspects”. The attorney firms used to collect debts are often major players in the debt collection industry, but there are new additions to the list of attorneys collecting debt every year.

 

Settling an old credit card bill when you are sued by an attorney hired by a debt buyer.

Debt buyers, the debt collectors and collection law firms they hire, use some similar criteria to identify who they will sue in order to try to get paid. They don’t really care if the credit card balance they are collecting on was from balance transfers, large purchases made prior to when payments were stopped etc. They do use software and manual methods to identify accounts that show an increased likelihood of getting paid the full amount when going through the expense of suing you.

 

The attorneys and debt collectors hired by a debt buyer often work on a contingency (original lenders and credit card companies hire collectors on contingency too). This means they get paid when they get you to pay. For this reason, they have developed different methods for evaluating which accounts will have the highest likelihood of a return – getting you to pay. This sophistication is often referred to in the industry as “skip tracing” and it has different levels. Some software compares what can be seen on your credit reports weighed against whether you are current with a mortgage, other loans, even the affluence of your zip code, or whether they have an attorney debt collector relationship in your state, or within a couple county distance.

 

Getting the law firm suing you to agree to a lower negotiated balance pay off and settle the debt will depend on a host of things.

Are you being sued by the original creditor or a debt buyer? Look on the court papers you received for who the attorney identified they are working for.

 

Are you experiencing personal financial hardships that are verifiable – unemployment, underemployment, medical or health concerns, are you on a limited income from federal benefits, are you currently being garnished from other unpaid debts…. depending on the answers to these questions, the amount you pay to settle the account, or the amount of the monthly payment you may consider agreeing to can be impacted.

 

When it comes to being sued by a debt buyer, you may want to consider defending against the lawsuit as an alternative to settlement or payment arrangements.

 

Debt buyers typically get a scant amount of detail about your debt from the creditor they buy it from. If your account was purchased and then resold again, the degree of separation from your original lender is even more of a problem.

 

Debt buyers may be limited in the way they can back up their claim about your debt in court. They often have an excel spread sheet that lists all the accounts they purchased in the portfolio that had your account in it. They may only have access to your name, account number, social security number, the balance owed at the time of sale, your address and phone number, where you work…. In other words, just the basic details.

 

Debt buyers suing people in court over credit card debts are playing a law of averages game. The vast majority of people don’t file an answer to the lawsuit with the court. There are many reasons a lawsuit will be ignored and the debtors head placed firmly in the sand. Guilt over not being able to pay up to that point, fear about the court process, uncertainty about the options to  manage through an old debt that has escalated to this point. When the lawsuit is ignored, a default judgment is entered because the court assumes the legitimacy of the debt, and that the balance being collected is all accurate and can be backed up by the plaintiff – the debt buyer – because there was no challenge or defense to the lawsuit.

 

Debt buyers, and the attorneys they hire to collect for them using the courts, are being called out for presenting the courts with robo signed affidavits similar to the mortgage foreclosure fiasco. They are often unable to get the data they need to back up their claims sufficiently in court. They are often unwilling to go to the expense of having experts and those most knowledgeable about your account flown out to testify. Sometimes the simple fact you filed a credible answer to the complaint with the court is enough to make a debt buyer settle more favorably, or to even drop the lawsuit and go away.

 

There is a cottage industry of consumer attorneys who have been having good success in defending people against debt buyer lawsuits. They are succeeding by raising challenges to the claims made by the debt buyer and the collection attorney. It seems their claims cannot be easily substantiated by the excel spread sheet they purchased from the original creditor or another debt buyer. There is a whole lot more to it than that, but that’s detail that you can discuss with a creditor defense attorney.

 

Hiring an attorney to defend you against a credit card lawsuit costs money. You will have to weigh that cost against what it may cost to settle the account. The smaller the balance you are being sued for, under say $2500.00, the less sense it may make to defend the suit from a pure economic basis. Also, many attorneys who are not familiar with debt buyer lawsuits will just tell you “pay the bill”, or “I can settle it, or get payments set up for you”. Well, you can do that too. What you need is an attorney already familiar with defending against debt buyer suits, and there just aren’t that many of them out there.

 

A good resource to find a creditor defense attorney is the National Association of Consumer Advocates. Click here and then click on debt collection in the menu. A drop down will appear, select Collection Lawsuit Defense. Be sure to identify your state in the upper left of this same page. If there are experience debt collection defense attorney’s who are members of NACA in your state, they will be listed along with how to contact them.

 

When it comes to settling a collection lawsuit with a debt buyer, we can provide one on one support. We cannot help you with legal pleadings and the like, just the settling, or payment arrangement part.You may have additional unpaid bills and have bounced back enough financially in order for us to help you put together a plan to handle a collection lawsuit and the other bills in order to prevent more aggressive collections in the future.

 

If your financial situation has deteriorated to a place where you are being sued for unpaid debt, and you have multiple debts that you are unable to pay, it may be time to consider bankruptcy as an option to manage the situation, and even get a fresh start in a chapter 7.

 

I took the time to answer your question with the detail provided above because there was not much background information provided with your question, and also because others out there searching for answers about settling a credit card debt lawsuit might find some of the information useful. You, and anyone reading this are welcome to post comments and questions below, or start a new questions using the Ask CRN page.

 

Edit: After publishing the answer above this morning, I read a great article on debt buyers and defending lawsuits in a semi local weekly print publication. Anyone concerned about debt buyer lawsuits, collection abuse and what I covered above should take the time to read: http://npaper-wehaa.com/inlander/2012/07/26/s7/#?article=1636112

Especially if you are in Eastern Washington, or North Idaho.

 

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Comments

  1. Thank you for posting this helpful article!
    I’ve been served by an attorney hired by an original creditor and it is called limited civil case.
    I owe $ 2,000 on the credit card and I am currently unemployed and broke.
    Should I file a response or negotiate the settlement?
    thanks!

    • Jill – If you can access the funds to settle the account, you agree you owe the debt and are not disputing any angle of what you are being sued for collection – settling makes sense.

      If you can answer a couple of questions in a comment reply I will have more feedback:

      Who is the original creditor?
      Did the creditor send the account to other debt collectors before it was sent to the attorney suing you? If so, who were those debt collectors?
      Who is the debt collector attorney/law firm suing you?
      When did you last make a payment on the debt?

      • Barclay Bank Delaware was the original creditor.
        I don’t know if Barclay send my account to other debt collector, I never get any letter writing from them none of any kind of offer settlement. The attorney’s are NELSON & KENNARD from Sacramento
        I owe them about $2000 and the last payment was Feb of 2010.

        • Jill – Thanks for the additional detail. You mentioned you are unemployed and low on dough. What amount of money can you come up with to settle? Using today’s trends (as of the date of this comment), I would normally target 40% for settling Barclay credit card debt when not being sued. Given that Barclay has Nelson and Kennard suing to collect it is likely you would have to come up with more than the 40% of the balance.

          • thank you for your advised.
            I don’t have any funds to pay them yet but i will figure something out, I just don’t want to get a default judgement and let them win.
            I will try to negotiate a settlement and request to removed the negative marks.
            Any advised on how will I negotiate this settlement?

            • Jill – Negotiating a settlement when sued is handled a bit differently than when negotiating with a credit card lender, or the collection agency the bank hires. Check out the details provided in this post and the many comments there: http://consumerrecoverynetwork.com/question/can-you-settle-credit-card-judgements-like-other-debts-stressed/ – You will find a good amount of information to help you.

              When you say you will request negative marks be removed I assume you are talking about your credit report. You will be wasting energy trying to negotiate with the collection attorney to get Barclay to remove any negative item on your credit report. The collection attorney is typically not in a position to negotiate credit reporting and would have no input with Barclay to get that done. Barclay will not offer to do so as an additional benefit to settling the debt for less than the balance owed in my experience.

              • I recently looked on mo case net and seen that I have a case filed for on capital one for 2200 for credit card debt. They have attempted to serve me but I work a lot because I’m currently going through a custody battle and I am never home and when I am I’m sleeping. I make decent money but I need to buy a cheap car (my truck broke down) so I can keep working and will have the money around beginning of May for a car but my court cases scheduled for March. Should I try to avoid being served until then, then call the office to settle even though I will only be able to pay around 100 a month or should I file bankruptcy 7 or 13? I have two other debts in collection, one is secured loan USAA and the other is credit card same compsny of over 13000. What happens if i never get served? If I file bankruptcy how much does it cost approx and would they take my car?

                • Michael Bovee says:

                  Jon – I would suggest talking with a bankruptcy attorney about your situation. Most offer a free initial consult. Check out http://www.nacba.org to locate an experienced BK attorney in your area.

                  If you learn something from the attorney about how either chapter 7, or chapter 13, would be something you want to avoid, come back and post an update and lets talk about other options. But filing bankruptcy would put this Capital One lawsuit out of its misery, and the USAA loans too (chapter 7 discharges unsecured debts).

                  You are indeed often able to keep a car through a chapter 7, but it depends on your states exemption amounts for that. Did I read your comment to say you are in Missouri?

  2. I just found out I a being sued by a collections (Asset Acceptance LLC) agency (original Visa card). How I found out: barrage of attorneys letters offering services.
    1. Due to my divorce, I made payment arragement with Visa (original debt a little over $1,500, current debt over $4,000)
    2. That arrangement was NOT renewed
    3. After my divorce, I moved to TX, job at school system paid $13,000/yr (No kidding)
    4. Tried to renogiate w/ Visa – no way!
    5. Visa added fees after fees, increased % rate, etc.
    6. Visa sold debt to Asset
    7. I went back to school — tired of minimum wage at my age (in my 50′s)
    8. Ending my internship this semester – no permanent job – have student loan + freelance (writer/ghost writer, marketing research)
    9. Divorce settlement clearly states that my debts incurred during my marriage are my ex’s sole responsibility.
    10. Have not being served yet – but know that’s coming.
    11. What can I do before I get served?
    12. Can I still settle? not sure where the money will come — but will do whatever it takes not to have to go to court and pay a lawyer.
    13. Please, I need help/suggestions.

    • Michael Bovee says:

      MC – In order to accomplish your stated goal of settling with Asset Acceptance and avoid court you will need to call the collection attorney Asset Acceptance hired to collect from you to negotiate and reach a settlement. You would get them to document the deal in writing and then pay the settlement.

      A realistic amount to settle with Asset Acceptance would be half of the value of the debt. Your hardships, lack of income, and the favorable consumer protection laws in Texas are of a nature where I have seen better settlement outcomes than 50%, but you should go into this with realistic expectations. If you need help with your settlement strategy consider calling into CRN for a consultation at: 800-939-8357 ext. 3.

      Some questions:

      Who was the bank that issued the credit card?
      When was the last payment made to the bank, or a collection agency?
      What is the name of the collection firm that has filed, but not yet served you with the lawsuit?
      Is your ex in a position to contribute some of the money for the settlement with Asset Acceptance?

    • Welcome to Texas; a state that understands bad things often happen to good people. If you do get served just make sure you respond. There is tons of information on the internet suggesting the best ways to do this. Next find out how much supporting documentation the creditor has. You can do this through the discovery process. Next show up on the court date and defend yourself; pointing out the shortcomings of the creditor to support their claim. I am making this sound more simple than it is but that’s because these are the basics you will have to do if served.

  3. Hello,

    I’m not being sued just yet, but I received a letter from a law firm (hunt & henriques) for my $3,000 capital one card. I want to call and settle an amount today. Any way I could lower the cost if I pay it all off on one payment? I’m not unemployed and I don’t have any medical issues.

    Thank you.

    • Michael Bovee says:

      Angie – Yes, you can call and settle today in this situation. With no hardship to provide details about, you should be careful not to go into personal financial details. Just stick to what ever caused you to fall behind in the first place, and that you can borrow the money to pay the agreed upon amount. For many that would be something like:

      “I had several unlucky personal events that gave me no option other than to choose between rent and food, and missing credit card payments. I am still struggling, but confided in a friend who can help me a little bit”.

      Keep it simple and brief.

      Capital One does not authorize the best settlements anyway, but at this stage of collection, which is placing the account with attorney debt collectors, the amount to target for settlement is often 70%. Of course I always recommend starting lower. But the 70 mark helps you prepare with a realistic expectation.

  4. Thank you for th advice. Luckily, they weren’t too rough on me. I settled and paid 2500 vs the 3000. I’m happy with that! I appreciate your help :)

    • Michael Bovee says:

      Angie – A consistent question I have been asked in casual conversation about my line of work over the years is – “So then what is a good settlement?”

      My answer is usually – “One that can be paid.”

      Your happy, their happy.

      Good job.

  5. Hi,
    I recently was hand delivered a justice civil citation in Texas saying I’m being sued by Capital One Bank for the amount of $1,795.52 and the Plaintiff Attorney is Michael J Scott. They had a separate yellow piece of paper with the attorneys office info to contact saying i could settle and avoid going to court. So I contacted them via email and got a representative and she said the balance was now over $1900 because of the court filing fee. She said I can pay in full with a check over the phone but that I have to contact them by phone. I don’t have phone service at this time and I’ve heard to never contact by phone and do it all in writing. I told them that I should get my income tax sometime soon and I can give them $800 and am still waiting on a response back. Don’t know if this was such a good thing to do but I got scared. Also should I fill out their Plantiff’s Request for Admissions and send it back to them and the court or will that matter?
    Thank you,
    Nicole

    • Michael Bovee says:

      Nicole – Negotiating and settling a credit card lawsuit is best done over the phone. The written part comes when you get the deal documented before funding the agreed upon amount. Here is an outline of what to look for in a debt settlement agreement: http://consumerrecoverynetwork.com/debt-settlement-letters-agreements

      You can make the call from anywhere (friend or family member cell phone, work phone), but be certain you are ready to seal the deal with an amount you can afford and that they will accept. I would not normally give this caution, but if using a phone other than your own, the number will get captured. If you don’t nail down a settlement in your first negotiation effort, they may make calls to that number trying to reach you (this is less of a concern when you are already being sued though).

      I do not think you made a mistake necessarily, when you offered 800 that would only be available from your tax refund. You made a settlement offer AND showed you are not flush with cash because the only way you have the money offered is from a one off yearly event. But here is the thing – It is not all that common to get a Capital One debt settled for 50-ish percent when there is a lawsuit filed. 50% with Capital One is common enough when negotiating a settlement with Cap One directly, or a collection agency they hire, but you are past that point. More often I see settlements negotiated in the 70% range with Capital One lawsuits. That’s not to say you couldn’t get this done for 800 to 900, but I would want to know a little bit more about your present circumstances.

      Are you working full time or part time?
      Do you have other credit cards that you keep payments current?
      Do you have other accounts that went unpaid showing up on your credit report, and if so, how many?

      If you are going to take any other approach than settling this account, you will want to participate in the court process. It is best to get help from an attorney in Texas on this. Not just any attorney though. You would want to connect with an experienced debt collection defense attorney. If you let me know the nearest large city when posting your reply to my questions above, I can email you some contact information for one near you.

      • I live closest to Austin Texas. I did contact an attorney that has dealt with several cases involving Michael Scott and he told me that it might be better to come to a settlement with them rather than hire him because his flat fee is close to what the full amount due is. He quoted $1250 flat fee to handle this one debt. Unfortunately I am unemployed and have several other unpaid debts on my credit report, 8 total. I don’t have any other things that I’m paying on at the moment.
        Thank you,
        Nicole

        • Michael Bovee says:

          Nicole – You point out a common issue with getting good legal support when the amount you are being sued for is a relatively low. It can make much more sense to apply the fees the attorney would charge to settling the debt instead. Combine that with the fact that settlement with the Scott collection law firm and Capital One puts the issue out of the way with certainty, where defending the suit does not guarantee a result, settling when sued makes more sense. Which is, I am sure, why you are out here on the internet looking for options.

          Given the fact that you are unemployed, have other unpaid debts on your credit report that the Scott law firm can see, and would have no other means to pay, consider making the call to the Scott firm and getting a deal done. If you are absolutely limited to the 800 you can up with, I am not sure you will get this settled. If you were able to come up with 1200 to 1300 I would be a bit more confident.

          If you cannot settle the debt, and end up with a judgment, there are things to be aware of, and also opportunities to settle later on when your finances turn around. See this post for more details: http://consumerrecoverynetwork.com/question/can-you-settle-credit-card-judgements-like-other-debts-stressed/

          • Ok, so since they made mention that they wanted to be paid by a check over the phone, it would be advisable to put the money that’s settled upon in a separate account just for handling debt?

            In regards to my other debt, on my credit report it looks like 3 of them haven’t gone to collections yet, should I work on resolving those first then work on the rest? I really want to get this all straightened out as soon as I possibly can.

            Also I just received a Settlement Opportunity in the mail just yesterday for a T-mobile debt but it’s not listed on my credit report at all. What should I do about that one? Sorry so many questions, I dug myself a deep dumb hole.
            Thank you,
            Nicole

            • Michael Bovee says:

              Nicole – You bring up a great point about having a separate account set up to fund your settlements. It is not something people often prepare for upfront. I encourage paying settlements from an account you do not pay regular bills from. Here is a brief report about having a different account you pay settlements with: http://consumerrecoverynetwork.com/paying-your-credit-card-debt-settlements

              It is best to settle debts with your original creditors before the accounts charge off and go to outside collection agencies, which is when your risk of being sued typically begins.

              Settling the account with T mobile now may prevent it from hitting your credit report later.

              How many different accounts are you dealing with?

              • What can you do if the credit card is over 9 and a half years old? They have changed hands so many times that I have no idea what is going on with it. I live in Indiana and the credit card length is 10 years. They have called but I don’t answer and have sent letters too. Is there anything I can do about this? I was told if I talked to them it would start over again from the day I talked to them. If you could give me some answers it would be greatly appreciated. Thanks again, Peggy

                • Michael Bovee says:

                  Peggy – The good news is that the statue of limitations is 6 years for credit card debt in Indiana. You cannot legitimately be sued for the debt at this point. And it should be off of your credit report by now.

                  The bad news is that the debt really never goes away. It can be sold, resold, sold again etc. Your best bet is to identify who is collecting by answering the phone. They are required to send you a written collection letter within 5 days of contacting you on the phone. You can use the return address on the written letter you get to send a cease communication letter certified mail return receipt. That will stop the calls until the next debt collector gets hold of it. If it does not stop the calls or collection attempts from the same collector who received your cease communication letter, post an update to this comment thread and lets go from there.

                  • Mr Bovee, I am being sued for a credit card that was charged off in 2006 in the state of Utah , I live in texas . I want to file an answer but am scared because I have no way to go to a court heading in state of Utah , what could happen in such situations?

                    • Michael Bovee says:

                      Cindy – How long have you lived in Texas? Is this a consumer debt? Who is the named plaintiff that is suing you?

                    • The original credit card was under advanta bank corporation. I am being sued by federated capital corporation who provided a charge off statement from advanta in amount if 9,452.23. So I guess it would be someone who buys old debt . I have lives in Texas since 1995, never lived in state of Utah . Around october 2013 federated capital sent a statement saying that the amount to pay off the debt was 30,036.69. Which is a ridiculous amount , not the amount they are suing for or that the charge off statement dated in 2006 states.

                    • Please let me know if u have any suggestions.

                    • Michael Bovee says:

                      Cindy – Something is not right. I want you to call an experienced debt collection defense attorney for a free consult to get to the bottom of this. Send me an email (same address you get these comment notices from) and include the name of a larger city near you. I will email back contact info to one or more attorney with the experience you need.

  6. I’m dealing with 9 different accounts now, including the T mobile one. So if it says on my credit report that the account has been charged off but it doesn’t state a collection agencies name what does that mean? So, I guess its looking like none of my debt is still with the original creditor.

    • Michael Bovee says:

      Nicole – If the account is charged off, but no collection agency is reporting, it can mean the following:

      The creditor placed it with an outside collection agency. You can call the creditor and they will tell you who that is and how to contact the collector.
      Your creditor may have sold the account to a debt buyer along with the right to the debt. Here again you can call the creditor and they will tell you if the sold it and who to.
      Your creditor may still have the account in house.

      Not all collection agencies report to the credit bureaus.

      Settling accounts that are charged off and with debt collectors is fairly similar to settling with your creditor.

      • Thank you so so much for all of your information and time! You’ve literally been the most help out of several people I’ve talked to. This gives me a very good understanding of the whole situation and I feel confident now that I can proceed with resolving my debt. Again thank you so very much Michael for sharing your wisdom!
        Many blessings,
        Nicole

        • Michael Bovee says:

          Nicole – My pleasure. As you progress through your negotiations and settlements and have additional questions or concerns, post here, or try the search box to find a page about a specific creditor, debt collector, or debt buyer that you are dealing with.

          Best of success!

  7. HI I RECENTLY GOT A LETTER FROM MIDLAND AND ITS ATTORNEY SAYING IM BEING SUED FOR $2600. I GOT IN CONTACT WITH THEM THEY TOLD ME IF I PAY IN FULL WITHIN THE FIRST WEEK THEY WILL DROP THE CASE AND I WILL HAVE NO JUDGEMENT AGAINST ME OR LAWSUIT. AND THEY WILL DROP THE CASE. IS THIS TRUE ? NOW I ALSO HAVE ABOUT 5 CREDIT CARDS AND A LOAN AND T MOBILE WHICH ARE ALL CHARGED OFF I KEEP GETTING LETTERS FROM COLLECTIONS. ANOTHER PROBLEM DUE TO MY CURRENT JOB I CANT AFFORD TO GET SUED OR I WILL LOSE MY JOB, BUT I DO WANT TO SETTLE ALL MY CHARGED OFF ACCOUNT WITH A PAYMENT PLAN. HOW CAN I DO THIS ?

    • Michael Bovee says:

      JOHNNY – There is no question that you can call up the attorney debt collector who sued and pay in full in order to get the suit dropped and take all risk of a judgment out of the equation. You can negotiate that deal 10 out of 10 times. But that is not really negotiating. If it were me, I would look to get some type of reduction by saying; “I cannot come up with the $2600.00 because I am spread too thin with bills and no savings. I may be able to come up with $xxxx.xx by Friday if I can get some family or a friend to help me out. Will that work?”

      If your primary goal is to stop the suit in its tracks without any monkeying around, but still with a view to some level of debt reduction, the $xxxx.xx you offer is going to need to be closer to the balance they are collecting.

      As far as settling your other charged off accounts with payment plans, you simply locate where all of the accounts are and call with a payment offer. You really are not settling, but would be able to negotiate the payment you can afford with each.

      If you post a comment reply with the creditors, collectors, debt buyers you are dealing with, along with the amounts owed, I can provide more feedback and strategies for you to consider to get the most out of a bad situation.

      Whats with the all caps?

  8. In 2008 my business failed leaving me in a situation where, looking back I should have filed Bankruptcy. Currently I owe over $300K in debt, with no assets (only about half shows on credit report). Now I am back on my feet with a decent job (making about 100K a year) in Southern California. interestingly I was told (by a close friend who went through something similar) in 2009 not to talk to any creditors since there was no way I could pay. So I stopped all correspondence early 2009. I didnt make any payments since mid 08. He told me after 4 years of no correspondence I could not be sued for the debt in California. Unfortunately do to finances, I recently had a divorce and my wife took what things we had, and I agreed to retained all debt thinking eventually I could settle it. All of my credit cards have been charged off and sent to debt collectors. I ignored them all. In the meantime I have brought my sub 430 credit up to 600 by keeping a small credit card ($500 and $750 ) active and paying my bills on time. So now just today I get served: Here are the details of my situation:

    1: Served by Pride Acquisitions regarding my Chase Credit Card for $39,000. Its a charge off.

    2) Last payment was probably mid /late 2008, on original balance of $25K

    3) Statement attached to summons was from Aug 2009

    4) Only real property I have is a old second vehicle…oddly enough I JUST purchased a car 3 days ago before they filed
    5) I am on a court ordered payment plan for a Spousal support settlement through April

    6) I have never talked to Pride acquisitions , however they have left me voicemails.

    7) I signed the summons….thought it might be final papers from divorce

    I am JUST now getting on my feet after 6 years of tough finances, and this is a real blow to me.

    I am curious what I should do. File an answer? Call them to settle (if I could get it down to about $4K and them showed paid on my report, it would be worth it. My concern is if I settle or get a judgement, this may start a windfall of creditors hitting me up. Plus I think I make to much to file bankruptcy now. Eventually I would love to settle my student loan ($80K), my supplier for my closed business(125K) , another supplier ($35K) and my 1 other Credit card ( $35K) and business credit line (35K) accounts for pennies to clean up my credit. Can a court really uphold a credit card debt in court? Thank you so much for your time and answers.

    • Michael Bovee says:

      MS – When a debt buyer like Pride Acquisitions sues for debts they buy from banks like Chase (they may have bought your credit card debt from another debt buyer), you have some fair odds of successfully defending against the suit. Probably even better odds if your last payment to Chase, or anyone on this account, was more than 4 years back.

      You should talk with an experienced debt buyer collection defense attorney before taking any steps from here. Most of this type attorney will consult with you initially at no cost. I can help you get a grip on settling with Pride Acquisitions after being sued, but you may not need to, or want to, after speaking with the attorney I would refer you to.

      Let me know in a comment reply if you would like for me to email you contact info for one of the best attorneys I know of for situations like yours. He happens to be in California.

    • oscar raman says:

      can u please email me the info on this lawyer in california. I have a similar story like MS Smith.

      • Michael Bovee says:

        Oscar – I sent you an email with the attorney contact info you requested. Can you share a little bit more about what you have going on? Are you dealing with Pride Acquisition as well?

  9. STEPHANIE says:

    So I live in Idaho and just got a notice that i was to be served with legal papers and they missed me. I called the court house and found out I am being sued by Asset Alliance for a debt from a long time ago with Citifinancial and my question is Isn’t there a certain time frame from my last payment of how long they have to take me to court? I know its been about 7 or 6 years since my last payment so if it has been over the time that they do have to sue me can it be dismissed? How does it work?

    • Michael Bovee says:

      Stephanie – Citi Financial was mostly engaged in personal loans that are often referred to a signature loans. This type of account in Idaho has a 5 year statute of limitation on legitimately filing a lawsuit to collect (credit card debts or open revolving accounts with 4 year sol in Idaho). Asset Alliance bought the debt. Actually, after this long, I would suspect that the Citifinancial account has been bought and sold several times.

      If you are certain about the date you last paid anything to citifinancial, it sounds like the sol has past. The sol passing does not mean people do not get sued, but it does mean that your defense to the suit is short and sweet – The debt is time barred.

      Ideally you would work with an attorney to get this dismissed. What is the balance owed, or be alleged as owed?

      • I Just got a copy of my credit report and my last payment was Feb 09′ which I do not remember paying all the way up until then so I guess that would make me within the SOL. I have not been served yet but as of right now I owe $1055.00. Do you have any advice you can give me? Do I call the lawyer and try to make a deal? If so how much do you think I should try to bargain with them? The original loan was taken out 2005, not sure if that helps any. Thank u!

        • Michael Bovee says:

          Stephanie – What is the name of the collection law firm?

          • It just says asset alliance LLC Bradley J knell…I havent actually gotten served.

            • Michael Bovee says:

              Stephanie – If your goal is settling the Asset Alliance collection, best case with pending lawsuit is likely going to be 50%. There are things about you that debt collectors can see from your credit report and other sources that may lead them to settle for a higher amount. What amount of money can you access to settle?

              • Well when I looked at my credit report there were a couple things here and there. Nothing as big as this one. Well I can probably get ahold of 550.oo and I would be happy with that. Hope they dont just deny me and want to go to court anyway. I really dont want this on my record even tho it is horrible anyway.

                • Also what other sources are you referring to? So my parents took out a loan in there name and had my name on there as well for a condo then they refinanced there house and payed it off. I am now making payments to them but would someone consider that an asset and would the bill collectors be able to find out about that and think i have money? I only make 13000.00 a year.

                  • Michael Bovee says:

                    Stephanie – Yes, if there is a home in your name that once showed on your credit report as a mortgage loan, and is now paid off, and your current address is still the same, it does make you a target for higher settlement percentages, especially when trying to negotiate a settlement with a collection law firm. This is not a hard and fast rule, but it is something to be aware of.

                • Michael Bovee says:

                  Stephanie – Even with a credit report that is a bit tattered, you will always want to keep from having a judgment show up on it, if you can avoid it. That same account showing a last payment of 2009 will fall off in 2006. If sued, and unable to negotiate a settlement, the judgment that may result will cause credit report damage all over again, related to the same account!

                  When you have other accounts showing up negative on your credit report it can make it easier to settle. When there are current payments being made to other creditors it can be more difficult to get the best available settlement.

                  • I dont see anything on my credit report about a home loan. Would it still be on there?

                    • Michael Bovee says:

                      Even if the mortgage is no longer on your credit report, county records will show ownership. Property title and county records are often part of the equation in settling with debt collectors.

  10. Hi,

    I have a debt due to Capital One on a credit card. Its around $2200… I didn’t know I was being sued by them until I started receiving advertisement from lawyers. The state I am being sued at is Ohio but I moved to Minnesota. So I never received the summons.I looked on public records online and it had the attorney’s name and an address to Capital One. Is it possible to negotiate the debt down AND offer a payment or is it better to just pay the full amount through a payment plan? Should I write a letter to the address on the public record site since I never receive any sort of paper? I don’t want to have to go to court because I know the debt is mine and would rather settle. I received my Bachelors in 2011 and even after applying for hundreds of job, was not able to maintain a stable job. I live with my parents and have continue to look for any type of employment, due to the hardship I have return to school. I will be getting a little help from my student loans next month in which I will be able to pay capital one some, but definitely not the amount they are seeking. What would be the best advice here?

    • Michael Bovee says:

      Mabel – If you have the ability to settle the Capital One debt for 60-ish percent in one lump payment, I would shoot for that rather than payments. Getting them to accept less than what is owed combined with affordable monthly payments is not very common at this stage. Their thinking when it comes to monthly payments will be: “If you can afford this amount every month for 12 months to pay half the balance, than you can afford this amount for 24 months to pay off the full balance”.

      The other issue is being sued in a state where you do not live. I won’t focus on that though, if your goal is to simply get this paid in one form or another rather than dealing with the legal process.

      • I never received the summon, but on an advertisement for lawyers I received… It was filed a week ago… I have no contact information other then the Capitol One address listed in public records online, also the lawyers name.. I googled the lawyer and she is based in Michigan. Should I contact her by obtaining her information through google search? Or is there a process….

      • I don’t have any contact information about the lawyer other then a Capital one address on public records online. I google the lawyer, is it okay to contact her through the contact info. I found via google?

        • Michael Bovee says:

          Mabel – Yes, you can be proactive and reach out using the contact info you found on line. Without a case number to look up, you will likely be asked for the Capital One account number, or your SS# along with your name.

  11. Hello, hoping for a quick solution to this. I was never served but was being sued by Capital One in Illinois. I paid the credit card directly, in full, including court costs a month ago. I just saw that another summons has been issued to me for this debt. I’m not sure if I should contact the credit card company – since I paid them directly and can confirm that they received it, although I’ve had no statement from them stating so – or the law firm since technically they service my account now. Any thoughts would be appreciated.

    • Michael Bovee says:

      Kay – If it were me I would actually both contact the law firm suing and Capital One. If this does not get remedied inside of a couple weeks post an update comment and I will have some additional feedback. We once had a situation like this for a client go on for months with Capital One and the attorney they hired. It did not get resolved until the complaints reached the OCC. I would like to save you some time and aggravation from something like that, but see if they can fix there second lawsuit mistake first.

      • Hello again,
        I did contact both Capital One and the law firm, in that order. I was told that I had basically screwed up their “system” by paying Capital One directly and that they would put file a motion to dismiss the lawsuit, but the law firm had no intention of doing anything regarding my case until the appearance date. Both Capital One and their legal team acknowledged that the debt had been paid.

        It’s been a few weeks since that conversation and my case has been updated four times, all on the same day — “notice of motion filed” “proof of service filed” “motion filed” and “motion spindled” with a court date for later this month.

        I’m not really sure if/how to follow up now.

        • Michael Bovee says:

          Kay – I mentioned in my prior post that communication between Capital One and their contracted collectors is less than optimal. There is no excuse for it. If I were you, at this point, I would show up for any hearing date related to your being sued with; all documents of payment, notes with dates of calls you made, who you spoke with, what was discussed and how the law firm seems to have no problem wasting the courts time with frivolous lawsuits – all while knowing the debt has been paid!

          Post a comment reply with the name of the law firm suing you. It will help others navigating this site in the future to know the type of debt collector they are dealing with.

  12. I received a summon today for an unpaid credit card from capital one or its attorney. How do I respond to this summon if I don’t deny the debt? Do I send it to the court or the lawyer or both? I don’t want to go any further. I just want to settle without going to court. I can’t afford the amount in one lump sum, so is it possible to negotiate still?

    • Michael Bovee says:

      Angela – Yes, it is still very possible to negotiate. How much are you being sued for? How much can you come up with to settle the Capital One debt and avoid responding and sending stuff entirely?

      • I am looking at $2300. I can come up with a lump sum of $800 next month.

        • Michael Bovee says:

          Angela – Settling and active Capital One lawsuit for 35% is not a realistic expectation. If you are going to put this behind you, without the additional effort of defending the suit to buy time, you are going to likely need to be prepared with at least 50 to 60%, perhaps more.

          If you do end up filing an answer to buy time, you do not necessarily have to “deny” the debt. But you could contest the amount. You basically need to create enough of a controversy to stretch this out until you can settle it. It is always a good idea to consult with an experienced debt collection defense attorney on something like this. If you post the state and name of the largest city near you, I can email you contact info for one.

  13. Paul Norsti says:

    Hi There … PLEASE HELP!

    I am being sued by an agency that bought the debt from my credit card company … the amount on the card is some around $1,400 – plus filing fees which is with superior court and should be that much, right?

    I have about $500 that I can give up RIGHT NOW to put this to bed … do I have a shot with the collection agency?

    This is my last outstanding card , but I am inches away from bankruptcy – I would just like to get it out of my hair.

    Sincere thanks for any info!

    • Michael Bovee says:

      Paul – Post a comment reply with who the original credit card was with and the balance owed at the time you stopped paying. The date you stopped paying. Who the collection attorney is that is suing, and the name of the debt buyer that hired the attorney to sue. Once I know this info I will be better able to respond to your question about negotiating and settling this for the amount you are targeting.

  14. Hello-any advice would be greatly appreciated
    Got a summons and being sued by midland and they are not the original creditor but there attorney listed the original creditor as ” original creditor identified as credit card number” and listed a (supposed credit card number I guess). Can they do this? What should I do?

    • Michael Bovee says:

      Jackie – It is not normal to have an original creditor listed in a collection lawsuit by a card number only (without naming the original creditor). They can amend the complaint to fix this though.

      It would help to have some more info.

      Do you have outstanding debts like credit cards that have gone unpaid for some time?
      If so, can you compare balances with the amount Midland Funding is suing over?
      If you can identify an account:
      When did you last make a payment?
      What state are you in?

      Also, who is the attorney suing?
      What is the amount of the suit?

      If you do recognize the debt, what are your goals for resolving the issue?

  15. Hello,

    My name is James. I have just received a notice from a dept collector, saying there suing me for 2,000 I owe from 2011. I would like to see if I can avoid going to court and settle with them. I can probably settle at 500. I am a Massachusetts Resident if that means anything.

    • Michael Bovee says:

      James – By notice do you mean you were served court papers?

      You can avoid court by negotiating a lower payoff and settling the lawsuit, but settling for 25% is not all that common when you are not being sued, let alone when there is the leverage they have when suing.

      I may be able to help you target an amount to offer if you can post a follow up reply to these questions:

      Who was the debt owed to originally? Is that who is suing, or is it a debt buyer? If a debt buyer, who? What is the name of the attorney debt collection law firm suing you?

      • It was a Sears Card. JA Cambeece Law Office bought the Dept. I tired making a offer or making a monthly payment plan but they wouldn’t accept. My parents just got the notice today. I don’t know the Attorneys name only there going to have a hearing at my local court house.

        • Michael Bovee says:

          Thanks for the follow up details James. Unless you have some hardship and limited income situation, 50 to 60 percent would be the low end of a reasonable settlement expectation. Debt buyer lawsuits can be successfully defended by an experienced collection defense attorney, but with a balance this low, that cost would run you as much or more than what it would take to settle the lawsuit.

          • I make 15,000 – 20,000 yearly. Coming up with that amount would be difficult, should I try contacting the Attorney and work out a settlement or just plead my case in court?

            • Michael Bovee says:

              Contacting the attorney before hand and reaching some kind of resolution is preferred. If you cannot put something together you can afford you can see what can be arranged through the court.

  16. Diane J. says:

    I am needing some URGENT help with my current situation. I became unemployed and got behind on my Target CC payments. Eventually I could not make them at all. The balance is about $2700. Target charged off my account (per my credit report). A couple months ago I found out I was being sued by an attorney for the Target debt. I called Target and it confirmed that this attorney is acting on behalf of them for the debt. I filed a response with the court and have appeared 2 different times for 2 mediations, both without resolution. Now the case is going in front of the judge (trial), final. I am still unemployed. I have a mortgage (& 2nd) which I’m able to stay current with payemnts with help from many many family members in addition to social security survivor benefits I receive on behalf of my daughter (father deceased). I seem to have hit a wall with family and cannot ask for any more help. I have many leads for employment but still waiting to hear back. I am worried and have no idea what to expect at this next court appearance. I don’t have the $ to settle, maybe make payments, but not very big ones.
    What are my options at this point?
    What will most likely be the outcome w/the judge at this next court hearing/trial?

    • Michael Bovee says:

      Diane – If you end up with a judgment from the Target lawsuit you will have to be concerned with the warnings in this article: Dealing with credit card judgment.

      If you were unable to set up affordable payments while involved in the mediation, you may be able to after a judgment. You are not employed, so wage garnishment is not going to happen. You have a home they can put a lien against, but you can settle the judgment later and get the lien removed. That leaves serious concerns that your bank account could be levied after the judgment is entered. Getting set up with a payment arrangement through the court, and making those payments on time, can prevent your bank account being hit with a levy.

      Unless you have raised solid defenses against the Target lawsuit, the judge will be prone to grant judgment in favor of Target. You will then have to navigate that reality.

  17. Just got severed papers today original debtor is BB&T. The account shows charged off on credit report. The summons had attached a supposed copy of credit agreement but does not have my signature and looks like a print out of a pamphlet. Was told by Sheriff have 30 days to respond. The amount is $11,300. What should I do I know the account has to sold to another company because it’s charged off I live in NC

    • Michael Bovee says:

      Carmen – When did you last make a payment to BBT? Who is the plaintiff listed on the lawsuit (this would be the debt buyer)?

      You have couple of different options to consider, but before I go into those, knowing the answers to those 2 questions would help. Post your answers in a follow up comment and lets go from there.

      • Last payment was some time around September 9, 2011 Plaintiff: Sessoms & Rogers, P.A.

        • Michael Bovee says:

          Is there a name listed on the lawsuit other than BBT or Sessoms and Rogers?

          • Reads on Complaint page as
            BB&T Financial, FSB, F/K/A BB&T Bankcard
            BB&T Bankcard Coroporation

            • Lee C. Rogers Attorney for Plaintiff then has his address and phone number

              • Michael Bovee says:

                Thanks Carmen. It does not appear that your account was sold off to a debt buyer. BBT may have sent your credit card out to collection agencies in the past. Those collection calls and letters may have left an impression that BB&T sold off the account. If Sessoms and Rogers filed the complaint with BB&T listed as the plaintiff, they would not have done that unless they are representing the bank.

                2 ways to approach this are:

                1. Come up with a plan to settle the debt for less or make an arrangement for payment you can afford.

                2. Defend against the lawsuit in an effort to either defeat it, or settle it for an affordable amount.

                Original creditor lawsuits are more complicated to defend and defeat. This is made more so with a bank like BBT and its presence in North Carolina.

                What is it you are looking to accomplish with this situation?

                • Confused how can they represent BB&T when the account has been charged off? Got copy of credit report and also have letter received in the mail saying it was charged off. Originally was paying $50 month for 5 years for protection plan and when lost job they came up with excuses and said that the protection plan was no good. If were considering a settlement how much should I be looking?

                  • Michael Bovee says:

                    Carmen – Credit cards being charged off is an accounting function BBT is required to follow. The accounting function turns into a credit reporting item. Charge off also tends to be the most popular time frame banks like BB&T will send the account out to debt collection agencies, and also when banks will first consider selling off unpaid credit cards to debt buyers. Charge off is usually the earliest credit card lenders will consider suing to collect. Charge off does not mean BBT or other banks sell debt. American Express charges off unpaid credit card debt, but does not sell debts, and always retains the rights to them. Chase and bank of America on the other hand, sell a lot of charged off credit card debts (though not all debt and not all the time).

                    If you are considering settling with BB&T you will have to do the negotiating with Sessoms and Rogers now. Realistically you should be prepared with 50% or more of the amount listed in the lawsuit to settle. How quickly can you come up with that amount of money?

                    • If they can settle for 50% wouldn’t take but a couple of weeks to come up with money cause do have some in savings. Can it be requested to make the negative report of the charge off taken off credit report and exchanged a positive settlement?

                    • Michael Bovee says:

                      Carmen – The credit card getting charged off (6 months of nonpayment) by BBT is going to remain on your credit report for as much as 7.5 years from the date you first missed a payment. Trying to negotiate and settle a lawsuit, and making credit report changes part of why you would agree to a settlement, is not going to be productive for the following reasons:

                      1. BBT is not going to remove the charge off from your credit even if you paid in full.
                      2. Sessoms and Rogers has no ability to affect your credit rating at all, and they are who you will be negotiating a settlement with.
                      3. Since you know the credit report stain is going to stay, requesting a credit report change from an attorney debt collector, who can change nothing, often leads to higher settlement amounts because you are telegraphing to them you are not in as bad a shape financially to care about your credit report.

                      I know number 3 sounds odd, but here is what I am talking about:

                      You are being sued for a debt you did not pay BBT. You suddenly are going to contact the collector with a willingness to work out payment or negotiate a settlement. They are thinking that is because you are being sued, and they are right to think that. They feel they have the leverage in this situation, and they are right to think that. You bringing requests for more favorable credit reporting to the dance (that cannot happen anyway) means they now know that you will likely want to avoid further damage to your credit report by having a judgment show up in the public record section of your credit reports that will stay for 7 years, even if you later pay/settle/satisfy the judgment – which is what will happen if the lawsuit progresses with out settling or successfully defending it.

                      The charge off is from 2011 and will have less potency as time goes on. Getting the balance owed that is being reported down to zero will improve your debt to income ratio. Your credit is going to bounce back over time.

  18. Okay makes sense will see what I can get done and will try to give update when get things settle. Thanks a lot

  19. This is more of a legal question.. I received a summon from a local court being sued by capOne. I responded validating the debt, explaining my situation, and offering a payment plan. Two weeks later the court sent me a letter stating this matter will not be schedule for pretrial. If the parties desire a pretrial, they should file a joint motion and explaining why a pre-trial is necessary. Then it gave me a discovery deadline, a motion deadline, and a trial date…. Does anyone know what this means?

    • Michael Bovee says:

      Liz – You are being sued, so sending a standard debt validation request is not going to get you anywhere. There is no requirement for a debt to be validated in the traditional sense, you may read about on different websites, once you are sued. You can still get the same type of info you would like when using a debt validation letter in the most common way the request is used (sending to a debt collector you receive a collection letter or phone call from), but you have to now do that in a much more formal setting through the court, which is part of the discovery process mentioned in your comment.

      Discovery and motions are how you prepare for trial. There are deadlines set for this stuff in the normal course of a court process.

      If you want to resolve Capital One suing you to collect by setting up a payment plan, it is best to pick up the phone and work something out with the debt collection attorney Capital One hired to sue you.

      Hope that helps.

  20. beverly says:

    I was served a civil warrant, and am being sued for a credit card from Bank of America, I am being sued by Buffaloe & Associates which are layers for Cach, LLC. The amount is $6525.61 they say I owe. OK, in Nov. 2010 i settled with another collection agency for about $3500. I told them I would pay $3500 when I got my income tax which was about March 2011. They agreed to this and told me they were sending me a 1099-c. Which they did for 2010 and I put it on my taxes, they said since I settled with them in 2010 I had to do it. The amount of canceled debt on the 1099-c is 627.44. When I called them back in 2011 they said they no longer had my account, that they had turned it back over to Bank of America. So i called Bank of America they acted like I didn’t exist and said they didn’t know who had my account. $3500 is the amount I agreed to pay and know one would take it but they still sent me this 1099-c. Now 2 years later I am being sued, I called Buffaloe & Associates they said the least they can take is $5100 and they want to send me another 1099-c for this same credit card, I told them no, can they do this. I don’t care to pay $3500 what I agreed on, I can’t afford payment Please help me. Why won’t they settle this with me.

    • Michael Bovee says:

      beverly – I want to be sure I understand what you shared in your comment before I give too much feedback and suggestions for you to consider.

      It sounds like you had an “opportunity” to settle the debt where you were going to pay the 3500.00 months after the agreement. You did not actually send the 3500.00 in to settle in March 2011. When you called in to send payment, the account was no longer there. The account has remained unresolved since. Is this correct?

      What you outlined with the taxes is definitely out of the ordinary. You can amend the tax part of this though. Lets look at resolving the lawsuit first.

      Let me know I my brief summary above is correct in a comment reply. Also include the date you last paid Bank of America, and the state you live in.

  21. Your summary is correct. I am not 100% sure when I made my last payment, I believe about 2008 and I live in Tennessee.

    • Michael Bovee says:

      beverly – Cach LLC is a debt buyer with the goal of maximizing the return on their investment after purchasing your account. You may not be able to settle this for the 3500.00 you are targeting, but you may have success if you sweeten the offer a bit. Something else for you to consider is defending against the suit. There are not many lawyers who specialize in debt collection defense around the country. There are a few in Tennessee. You would have to retain the attorney to represent you, but the cost of that will likely be less than the 3500 you were prepared to settle with. It is often very difficult for for Cach LLC to overcome some of the arguments and defenses an experienced attorney working for you will bring to the party.

      If you would like to consult with an attorney of your own, reply with the name of a larger city nearest you. I will send you an email with contact info for the nearest one or two. Most of this type of consumer law attorney will offer to consult with you initially at no cost.

      • beverly says:

        Thank you very much, I live near Cookeville, Tn. I thought about contacting a lawyer but I was afraid of spending money on an attorney and still losing and getting a judgement against me anyway.

        • Michael Bovee says:

          beverly – I sent you an email with contact info for several attorneys with the experience you need. The closest one is more than an hour away though.

          Yes, spending the money and not getting the Cach LLC lawsuit dismissed would be a huge bummer. No attorney can guarantee an outcome. Having said that, some attorneys I know that defend debt buyer suits have never lost. You will get a better sense of what direction you want to go after speaking with an attorney.

        • Beverly,
          Do you care to share what the outcome was? Unfortunately Buffalo and Assoc is doing the same to me. Thanks

  22. I was just served papers that I am being sued for about $5000 by midland funding they are being represented by rausch,strum,israel,enerson & hornk, llc. This is the second time i have been sued for this same issue the first time i answered the petition ad it sat idle for 2 years when last November i was notified the case had been dismissed via a non-suit without prejudice. I have now received another notice of lawsuit. I would love to pay what is owed and just have it go away but I am unemployed and have around $700 of other debt i am dealing with every month. I just don’t have the funds to pay them. I went to a lawyer and his only advice was to file bankruptcy I really don’t want to do that me and my wife have been fighting with debt for nearly 7 years and are only a year or 2 from eliminating all of our debts. do you have any knowledge of this company or law firm and would you suggest trying to negotiate a lower payment. I could probably get $3500 if it really came down to it. I fear that negotiating could damage any defense I have but i just really don’t want to deal with it anymore and i don’t want to destroy my credit.

    • Michael Bovee says:

      Bob – Yes, I have dealt with both. I do like your chances of settling this at 3500.00, maybe even slightly under that. Settling when sued, or with a judgment, is often a case by case process.

      You do not have to give up any defenses. You could even start off the conversation with the fact that this was brought to court in the past and dismissed. You do not necessarily want to spend the energy again, and are somewhat curious about settling out of court, but only if it can be done for xxxx.xx amount.

      I am assuming this account is still with the SOL for credit card debt in your state?

      • I am in Texas and I believe the SOL is 4 years. The papers i was sent say the account was charged off in December of 2009. I believe the last payment made to the account in question would have been in the summer of 2009. My spouse and I got pregnant and had no insurance most of our money went to medical bills and doctors visits.

        • Michael Bovee says:

          Bob – Texas is a 4 year SOL on credit cards. You appear to be within that time frame given the detail you provided.

          Start off with calling Rausch, Strum, Israel, Enerson & Hornik to work out a pay off you can afford. If you run into any trouble, post an update and we can go from there.

          • Well i did call and managed to settle for less. it was more than $3500 but it feels good to know it will be over with soon.

            • Michael Bovee says:

              Thanks for the update Bob. From this, and your previous comments, you are obviously committed to dealing with past debt struggles, and moving on with a brighter financial future. Best of success to you and your young family!

  23. I almost have the same situation with Beverly of Tennesee. Only thing is i reside in Southern California.
    Here is my story. I started my small business in 1993 and BOFA has my business bank account. Ever since the start I have a business line of credit with BOFA and payments with my loc is automatically drawn from my business account. In the early 2012 (March2012), BOFA stopped drawing the auto payment from my BOFA business account and eventually sold the debt to CACH LLC on August 2012. Today, i received a letter from Mandarich Law Group of Woodland Hills, CA demanding a payment of $16,141.60 which is more or less close to whatever i owed with my BOFA loc plus penalties.
    Please help!!!!

    • Michael Bovee says:

      Henry – Are you in a position to raise funds for a settlement with Cach LLC through the Mandarich collection law firm? The communication from a local collection attorney is a clear sign your risk of being sued for collection have increased dramatically.

      Putting together a plan of action if you cannot raise funds for settlement quickly is doable, but what amount can you raise in the next 30 days to put this old Bank of America account to bed?

      • That is my problem. My business is a service business and have been struggling to survive since the recession. That is why i was only paying the minimum monthly payment of $200.00 to BOFA.
        I cannot raise 16k in the next 30 days. Maybe i could borrow a thousand dollars from family but everybody seems to be in worst situation these days.
        What plan of action can i do? Thanks.

        • Michael Bovee says:

          Henry – You would not need to raise 16k. But if half of that is out of reach – same difference. If things are just that tight, you have a few options to consider before, or after getting sued (which I think likely at this point).

          1. Negotiate a payment arrangement that you are confident you can follow through on.
          2. Work with a skilled collection defense attorney when you are sued in order to beat back the legal collection action.
          3. Look at bankruptcy to determine how that helps and harms. If the help is more than the harm, file.
          4. Do nothing for now, even if sued, but make a few changes to how you manage your daily finances, and circle back to resolve the debt later (not a great plan, but can make sense in limited situations).

          If you want help drilling into each of the 4 options, it will involve digging into other debts, your income situation, assets you hold etc. You can call in for a consultation at 800-939-8357 ext. 3. You will speak with a specialist here at CRN. There is no cost for the call.

  24. Lauren hanson says:

    What is the sol for credit card debt in Washington state

    • Michael Bovee says:

      Lauren – SOL for credit cards in WA is listed as 3 years, but there is an appeals court decision that ruled 6 from a couple years ago.

      A better answer than that is not really available unless I knew more about the situation that has you looking for the information. Are you trying to respond to a collection call or letter, or have you been sued recently?

  25. Need help as well. I am being Sue by Midland Funding LLC and their Attorney’s name is Amanda R. Duffy. I live in Florida. This is a credit card that I had with Target and right now the amound is $12000 that they are sueing me for. I called today to try to settle for $3000 buy they did not accept and I also told them that the only amount I would be able to pay is $30 a month and that they refused also. They said they would send me a hardship package to prove my financial hardship. Should I consider going to court or try to settle for a hire amount which right now I cannot afford? I ask the representative if she could send me a list of my spending on the credit card without the bogus fees and interest rate, she said she can’t? Can I still persist on asking them for a copy?

    • Michael Bovee says:

      David – You can certainly look to settle this with a higher offer. You may need to double it.

      When were you served the lawsuit?
      When did you last make a payment to Target?
      In brief, what was the hardship that led to your inability to keep payments current on the Target credit card?
      What type of financial hardship are you experiencing today?

      You can certainly request accounting of how the amount you are being sued for is being determined. Now that you are being sued, the way that gets done is by defending the suit and getting into the discovery process and requesting all of that.

      If you can post a follow up comment with answers to the above questions I will have some more feedback.

      • When were you served the lawsuit?
        Feb 21,2013
        When did you last make a payment to Target?
        *****December 15,2009
        In brief, what was the hardship that led to your inability to keep payments current on the Target credit card?
        *****Had a child and had just gotten a new job after being fired
        What type of financial hardship are you experiencing today?
        *****have another child on the way,

  26. What is the statute of Limitation For the state of Florida?

    • Michael Bovee says:

      Credit card SOL in Florida is 4 years.

      • Thursday will make it 30 days, how do I answer the court? Do I need to show up for the summon or since we are nagotiating they will put the summon on hold?

        • David – No, there will be no hold on the summons while you attempt to negotiate a payment with the attorney collection agency. This late in the game, and assuming you are unable to make an agreement to settle today or tomorrow, I am going to encourage you to connect with an experienced debt collection defense attorney for help with answering, and perhaps even getting the suit dismissed. Post a reply with the name of the nearest larger city in Florida and I will email you contact info for the type of attorney you should look to connect with.

  27. Bernardina says:

    Hello Michael, Main Street Acquisition Corp. Assignee Bank Nevada Na Direct Merchants, MasterCard. Sent me a Summon notice for Pretrial conference this month 25 , for 3,196.67 plus court cost, and prejudgment interest, 310.00 and service fee of 40.00 dollars. Well in 2009 my account was only 900.00 , but when I went to Peru I was offered in the Aeroport in South America a phone that they said have free calls only to rented was 9.99 and paid with my credit card after 4 day my credit card was over charge,for more 2,500 at the time HSBC never credit me for this charges , anyway I haves fraud protection and I don’t remember the another plus plan. I live in Florida Manatee County really I don’t know what to do . I’m unamployed , can you help me please what to do and how to talk to them. Do you have idea how much I will have to paid? Or this people will let me make monthly payments. Thank you.

    • Michael Bovee says:

      Bernardina – Did you file disputes regarding the charges at the time? Did you file a fraud report in order to trigger any protections?

  28. Hi Michael,

    So I’m freaking out…. I live in Southern Cali. Yesterday I received a Notice Of Intention To Sue letter from Mandarich Law Group, LLP (a law firm in Woodland Hills, CA). I have a debt in the amount of $2,041.54. The original creditor is Citibank South Dakota, N.A., but it was charged off to Cach, LLC. Now the debt has been passed to Mandarich.

    I’m freaking out because I don’t want to be sued by them. I don’t really want to make a settlement with them because I don’t want to have to deal with the whole owing taxes thing that comes along with agreeing to settle. I would like to just go ahead and pay the full balance that I owe.

    My questions are:
    -Is it possible for me to make monthly payments? If so, how much would be sufficient to pay each month?
    -If Mandarich does agree to a payment plan, is it my right to get the agreement in writing before making any payment to them? If so, what all should such a “contract” consist of?
    -I don’t want to use my checking account to make payments. Can I opt to do money orders or some other form of payment each month? What are my options, if any?

    Thanks so much! I hope to receive your response soon!
    DMG

  29. Michael,
    I forgot to mention that the date marked on the letter I received is March 7, 2013. In the letter, it says that “Our client has authorized us to file a lawsuit to collect the balance owing on the above-referenced account should we not resolve this matter within ten (10) days from the date of this letter.” However, I didn’t receive the letter in my mailbox UNTIL March 15, 2013! That’s only 2 days for me to respond back to them (March 17th, which is a Sunday and they are closed!!). How is this possibly fair of them to do? Why would this letter reach me on the 15th…..two days before the 10 days runs out????? Is this acceptable on their part?

    Thanks,
    DMG

    • Michael Bovee says:

      Donna – In the situation you described with Cach LLC owning the debt and Mandarich law group collecting (soon suing), your payments should first be something you know you can afford with confidence. I will throw a number out there of 250.00. Can you afford more, or less than that?

      Yes, the way they wrote the collection letter to you with a deadline date prior to suing you to collect is somewhat common. Sometimes the suit is is filed right after the date listed in the letter expires, sometimes weeks after. I have no doubt that they do intend to sue.

      You do need to get any agreement in writing. Here is an outline of what to look for in a settlement letter.

      I have trouble following your logic about owing taxes on settling a debt. The tax is triggered from a savings, if it is due at all. The amount saved may not be as much when you factor in any tax owed on the amount forgiven, but it is still savings. Also consider that the 1099c on a settlement is triggered when the amount saved is in excess of 600.00. If you have the money available to pay Mandarich law group for the Cach debt in one lump sum, offering several hundred less than what you owe will get the settlement done, avoid the lawsuit, and not trigger a tax concern. Here is a brief report about owing tax on forgiven debt.

      If you do want to use money orders, that is normally acceptable. You might get some push back on it though. There is not the same level of concern with auto draft payments as there have been in the past. I do encourage using a separate checking account to make payments on settlements. Normally there is more time to prepare and approach settlements, but if you have more settlements or payment arrangements left to do, this report is worth a read: http://consumerrecoverynetwork.com/paying-your-credit-card-debt-settlements

      • Hi Michael,

        Thanks for getting back to me. Ugh! I have so many questions! If you can answer each below, I’d REALLY appreciate it. :) I’m contacting them FIRST THING Monday morning to see if this can be resolved before they sue me…

        -Being that March 17th (my deadline date to contact them within 10 days) is on Sunday and they are closed, what do you think are the odds that they’ll go ahead and sue if I call them first thing Monday morning? Again, this letter wasn’t even delivered in my mailbox UNTIL Friday, March 15th! I check my mail everyday, so I know the letter just arrived to me on the 15th….

        - So, in your opinion, is it better to pay the $2041.54 in full? Or is it better to just take a settlement? Does it look worse if a person just settles instead of paying off the entire debt?

        -You mentioned $25o in monthly payments…. I do strongly believe I would be able to meet that payment each month. But is that amount an amount that they’d probably accept? Or would they require a larger payment per month??

        -When I agree to pay whatever monthly amount, how soon are they going to want me to start making payments? Again, I don’t want to pay ANYTHING UNTIL I have something in writing saying what the “deal” is. I don’t want to get screwed over…

        -I definitely don’t want to use my personal checking account to make payments! But how is one able to open another checking account? Do I just tell the bank my situation and see if they’ll let me open up a second account? I’m not sure if I’ll be able to open another one….

        -As for my fear of having to pay taxes after making a settlement…. I thought that ANYTIME you decide to settle instead of paying off an entire debt that you would HAVE to owe taxes. But you’re saying that you ONLY have to pay taxes on a settlement if the amount saved is MORE than $600??? Is that correct? So if my debt is $2041.54 and I am able to get a settlement of $1500, thus saving $541.54, then I would not have to pay taxes on that savings because it’s less than $600??

        Sorry for so many questions, Michael. I just want to make sure I understand everything and know what I’m talking about when I speak to them Monday morning. I hope you’ll be on this message board all day Sunday because I’m sure I’ll need more of your help. Lol. I just want all this to be behind me already! :( Okay, I’m getting ready to read over the sample settlement letter you provided me….

        THANKS SO MUCH!!
        DMG

        • Michael Bovee says:

          Donna – I doubt a process server is going to show up at your door tomorrow with the lawsuit.

          When it comes to settling debt in collections, and especially at the collection stage you are at, you do not get much bang for your buck if you pay it off in full. The damage to your credit has already taken place. Getting collection account updated on your credit report as paid will be the benefit. One reason you may have for paying the full amount could be because no settlement can be negotiated, and you want to avoid a lawsuit being filed, or you have been sued and want to make certain you put an end to it and get it dismissed.

          I threw the 250.00 a month payment option out there as a round number. It is a number I also calculated based on the amount of the debt being collected. Getting payments like that, as long as there has not been a legal collection process started is fairly common.

          If you do end up going with a monthly payment, it is better to get it over with as soon as possible. Just be sure you agree to an amount that you know you will have each month and by the date due. How soon a payment is due can vary. If you do not need time to pull money together, give them 3 to 7 days to get something in writing over to you if they are not going to fax the agreement to you. If you do need time to make the first payment, end of month is a fairly frequent target. You definitely want to get any payment arrangement, or negotiated settlement agreement in writing before paying a penny. You really should read the detailed report I linked to in my other comment.

          You would need to talk to your bank about their policies for opening a second checking/savings account. It is very common, so you should not have any trouble. If you do, you can always open one at a different bank nearby and close it out later.

          As far as taxes when settling a debt for less go, you really should read the linked report on the topic. Not everyone will owe tax on forgiven debt even if the amount saved is over 600.00. The threshold for a creditor or debt owner to report forgiveness of debt is 600.00. It is possible you would owe tax on a settled debt when less than 600 is forgiven. If you do not receive a 1099c from the debt owner next year, you will need to remember to include that in your tax filing. Again, read the linked report.

          I am not going to be in much today. I do get comment updates on my phone, but I do not reply to them that way. If you post more questions and concerns today, I will be sure to respond to them late tonight from home, or first thing in the morning (I am on pacific time).

          • Michael, let me just first say how much I greatly appreciate your help with all this! So glad I came across this site when I did!

            -As for getting the settlement agreement in writing…. Do most creditors expect people to ask for this before paying? I’m DEFINITELY going to ask to get the agreement in writing, but I’m worried about them telling me they can’t or won’t give me an agreement in writing. What should I do if they tell me such a thing? I want to be prepared on how to respond if they try to fight me about sending a written agreement. I fear tomorrow they will tell me they are going to move forward with suing me if I don’t accept their verbal agreement (being that I’m on a tight deadline).

            -A little confused… Am I the one who needs to draw up the written settlement agreement and send it to them? Or are THEY the ones who need to draw it up and send it to me? If they are the ones who need to draw it up, and they send it to me, what should I do if I see things in the agreement I have questions about? Or if I see things that SHOULD be included that they failed to include?

            -Should I request to them that once I’m finished making all my payments that my credit report reads “Settlement Paid in Full”? What should it read once I complete all my payments?

            -What do you feel is the best way to make payments to the creditor? What would be the ideal choice? My thinking is that a money order is the best/ideal way to go because you don’t have to include your bank account info. However, I’m scared they’re going to tell me they can’t/won’t accept money orders. If that’s the case, I’m thinking I’ll open up a savings account at my current banking branch and just use that account SOLELY for paying the creditor each month. I just hate that they’ll have banking info (even if it’s not my checking account that I use on a regular basis). Using a Cashier’s check would also have your banking info on it, wouldn’t it?? I’m SO confused on which way to go! I just want to make sure I’m protected the best possible way without getting screwed. Your thoughts on this?

            Again, a HUGE thanks for all your help!! I’ll be awaiting your response. :)
            DMG

            • Michael Bovee says:

              Donna – Once you negotiate a settlement agreement over the phone, every legitimate debt collectors is used to backing up the deal in writing. It is something they have a template for and just need to personalize to you and insert the details. If you run into trouble with getting a letter post an update in this comment string, or better yet, post anything related to settlement letters and agreements in the comment section of the related link in the above comment post. I can help you from there.

              You do not need to draft the agreement. They have a standard form they will use. It is better to have communication the create generated on their letterhead.
              If you have concerns about what is, or is not, contained in the written agreement you receive, definitely post those questions in the comment section of the settlement letters and agreements report. This way others reading that page can benefit from the exchange.

              If there is a Cach LLC entry on your credit report right now, it does not really matter much how it gets updated as “paid in full”, “paid for less” etc. Getting it to reflect a zero balance is the key. If you are referring to the original Citi bank entry in your credit report, that one should be currently showing as a charge off with a zero balance owed. Settling or making full monthly payment arrangements with Mandarich collection law firm is not going to change the Citi entry at all.

              Offer payments via check by phone, or ACH payments through your checking account is not as high a concern when you have a written agreement and are following through with what was negotiated in print. I get the hesitancy though. If you absolutely want to stick to your guns on how you remit payment I would suggest using a money order or cashier check issued by your own bank drawn from your regular account. This will allow you to track payments, when they clear, and have easy access to all payment documentation should anything come up down the road.

              • THANKS, Michael! I appreciate you taking time to always answer all of my bullet points. Your answers are so helpful in my making decisions about how to handle this! :)

                -So you don’t think it’s necessary really for me to open up a savings account or another checking account to make payments? I should just use the checking account that I currently have? And sorry if this is a dumb question, but just so I’m clear…ACH payments means they will automatically take the money out of my account on the payment due date? Correct?? Whereas check by phone is me calling them on the payment due date very month and giving them my account info for them to take the money out? Correct??

                Is there any other advice you want to offer, or anything else I should know before preparing to “battle” tomorrow morning with Mandarich Law Group? I’m soooo nervous about this! I know I won’t be able to sleep tonight. My biggest fear is them telling me I’ll have to pay the full $2,041.54 up-front tomorrow, or they’re going to sue. There’s no way I’ll be able to pay that full amount tomorrow! I’ll have to do it in payments. And if they do ask me to make that full payment on the spot tomorrow, how should I react?

                I know you mentioned you’re on Pacific Coast time…I am, too! :)

                Thanks!
                DMG

                • Michael Bovee says:

                  Donna – Yes, ACH mean automatic payments drawn from your account on a set day. I always encourage setting up a separate account for payments toward a negotiated settlement. Not everybody wants to do that. In a one off situation I still recommend it, but it becomes less of a concern when dealing with one account, and while making one lump sum payment to settle a Cach debt placed with an attorney. You are looking to make a monthly payment agreement. You would not provide any banking or payment source information until you have the agreement in writing, so less of a concern here as well. If something other what was agreed to were to occur, it is generally not too tough to correct. If a correction is not quick and simple, the documentation of the settlement or payment agreement and the bank records will be used to beat someone over the head with. I hope that answered your question about setting/not setting up an account. It really is your choice. I prefer people set up a new account, but the hyper concern over doing that when resolving a legitimate debt with a large debt collector is less than it was 10 years ago.

                  Check by phone is what you described.

                  I think you are ready to call Mandarich law group. If they will not accept your monthly payment offer when you tell them that is all you can afford, ask what they are looking for monthly and post an update here. We can go from there. There are other alternatives for handling this. But lets see what they do first.

                  • Donna – In my opinion, based on what you have shared, it is best to make payments from a bank account, and not a prepaid card. The only reason I can think of to avoid paying from an account at your current bank is if you are sketchy that you will be able to follow through on the payments, miss one, they sue and get a judgment, and now know where you bank. But they can find that out quick enough anyway.

                  • This reader comment has been moved to the article that discusses setting up a set aside bank account to pay settlements. The comment and my reply can be found here.

  30. Oh, and Michael, another things that scares me about having to owe taxes is that my dad is the one who always takes care of getting my taxes done every year (he doesn’t do them himself, but I give all my tax stuff TO HIM to give to our tax preparer)….and he has no idea I have this credit card debt. Sadly, I really don’t want him to have to find out about it….

    • Michael Bovee says:

      Donna – There are certainly other things that influence anyone when deciding how to best manage their way through a debt collection situation. If your concern about your father knowing about your credit card debt being in collection reaches to a level of paying the debt off in full, than that’s that.

  31. Hi Michael,
    So I called MLG this morning… They agreed to the monthly payment of $250, made on the 27th of each month. The guy I spoke with said I would have to go the automatic payment route, to which I then asked if I could make the monthly payments via money order because I didn’t have a bank account (as you know, I really do have a checking account, but I didn’t tell them that because I wanted to see if they’d accept the money orders first), but they said they can’t accept money orders. He then mentioned I could make the payments via pre-paid debit cards. I’ve never really used those before and he told me a little about how they work. All I was thinking in the front of my mind is that it won’t have my personal account info on it (which is what I’m worried about most), so I said I’d go ahead and make payments with a pre-paid debit card.

    However, I didn’t think about how I can’t have proof of me making monthly payments if I use a pre-paid debit card. There’s no paper trail made when using such a card, is there? I feel like I made a mistake in saying I would make my payments this way.

    Please help with this… Is using a pre-paid card to make these payments a bad idea? Is my better choice to just go ahead and open a savings account with my current bank, and have the collectors take monthly payments from there? The guy I spoke with seems pretty reasonable and calm (for a debt collector, anyway. Lol.), so I’m thinking if I have to call him and tell him I want to change my method of payment he’ll be okay with that.

    Oh, and if you do think I should go the bank account route, do you think it’s best for me to just open a savings account with my current bank, OR open a new checking account with a totally different bank than where I bank now?

    As always, your help is MUCH appreciated!!! Looking forward to reading your thoughts.

    Best,
    DMG

  32. Michael,

    I was served with papers today from Capital One that say “Original Notice and Petition for a Money Judgement.” The amount that they show I owe is $1122.89 from July 2012. I was in an accident last year and since then have had three brain surgeries and will be having a surgery on my spinal cord on April 22. I had short term and long term disability through my employer, however I had to fight for both. I was finally awarded my STD in December (I filed in July) but the amount was only around $4000. I had not had income since July so I had to use this money to pay my mortgage and utilities. I explained this to Capital One several times on the phone and told them I am still fighting for my LTD.

    I did receive a tax return this year, but again needed to use this money to pay my household bills. After receiving phone calls everyday (sometimes more than once a day) I finally blocked their number on my phone. My question is I have no funds at this time to pay Capital One. As it stands, I am facing having my utilities disconnected on April 1 because my taxes were basically enough to save my house. There is an “Appearance and Answer of Defendant” paper attached to the court papers I received. I am supposed to tell them if the Claim is denied, admitted, or admitted in part (and enter an amount). Am I better off denying the claim?

    I did make regular payments on this account while I was still working and usually paid more than the amount due. The balance before I stopped paying was around $700. The late fees and interest are (I am assuming) how it got to be $1100.

    • Michael Bovee says:

      Lindsey – Late fees, penalties, and a few months of default interest rates will make a smaller balance account grow PDQ.

      It is up to you whether you file and answer and deny the claim. It sounds like you agree with it from what you wrote, but filing an answer making general denials does help you buy time while trying to come up with a plan. You can also consider filing the answer and looking forward to a hearing date in front of the judge in order to tell your story. You have compelling hardships. You may find the judge suggests to the attorney for Capital One suing you that they work out an affordable payment with you.

      Not that this is helpful, but my experience proves that Capital One is the least caring of any bank operating in the states. I have had success taking a situation like yours, with all of the physical and health issues, direct to key people at virtually ever large bank issuing credit cards, and gotten debts completely written off (and not sent to collections or sold off to bad debt investors), or settled for an amount far lower than would typically be available (using doctor letters etc). Capital One, in my opinion, could give a rip and will not tolerate compassion in their culture – rant off.

  33. hi,
    my mom got served with a lawsuit in texas (brownsville texas) for a chase credit card for $2400.00 and mom filed an answer but was a no show for civil court date hearing. She was scared to show up.

    So how can mom find out what happened in that court hearing. Will she get a copy of the judgement the plaintiff won and how soon from the date of the hearing will she get the notice.

    She ‘s now worried she will be put in jail for not showing up or that they will put a lien on her only residence she has and has lived for 30 years.

    Both mom and dad only get social security and dad has 1 more bank account for his teacher retirement pension check…..is this exempt?

    Thanks
    gloria

    • Michael Bovee says:

      Gloria – It is too bad your mom did not show. There is nothing to be afraid of when going to court for a credit card lawsuit. It’s about as scary as showing up to contest a parking ticket for the most part.

      I cannot say how long before she receives a notice of the judgment entry. You can call or visit the court to pull a the details of what happened and how much any judgment entry was for. The amount is probably higher from attorney fees.

      She cannot be put in jail for not showing unless this was a court ordered mandatory appearance for some type of judgment enforcement or asset hearing. But you or she can call and speak with the court, or a Texas attorney, to set your mind at ease on this concern.

      Money in your dads bank account where his teachers retirement check is deposited in likely not exempt from a bank levy.

      • What if both mom and dad file for chapter 7 or chapter 13 bankruptcy as soon as possible. Will this help them?

        • Michael Bovee says:

          Gloria – Filing for bankruptcy will stop any collection, judgment, levy, garnishment etc. for a debt like this in its tracks. But if this is the only debt they have to worry about, it would likely be more economical to settle it when compared to the cost of filing bankruptcy. The cost of a chapter 13 would probably be more than the balance of the judgment. The amount the judgment can be settled for may be about what the national average cost of filing a chapter 7 would be.

  34. I was served today. Was wondering if I still have time to settle with creditor. I’m in cook county illinois, the plaintiff is Precision Recovery Analytics, original creditor was GE Money. I am being sued for $4,600. Do i contact the attorney representing the plaintiff to negotiate? thank you. also how much do you think would be acceptable in your experience?

    • Michael Bovee says:

      lynn – There is nearly always time to settle a collection lawsuit out of court. I have a few questions for you.

      When was the date (roughly) of your last payment to GE Money?
      What amount of money can you come up with to settle in a lump sum payment?
      Are you willing to engage in the court process if it meant you had better odds of saving more money?

      • Hi Michael,
        my summons states a total of $4,558.67 as the claim amount. I just called the The Shindler Law Firm to see what they would say about settling. He said the amount is a total of $4,800 with fees, court costs. shouldn’t this total be on my summons. why the different amount now?
        I haven’t paid on this credit card in over 2 yrs. Statute of Limitations in IL is 2 years. the rep on the phone said it’s another 3 years left that they can collect? hmm..
        I can come up with $2,000. offered and he said the lowerest they would do after some negotiating back and forth was $3,600.
        I would like to save money and would possibly be interested in fighting in court. I called the law firm Edelman in Chicago this morning. they want me to send them a copy of my summons for a free consultation. not sure which direction to go.

        • Michael Bovee says:

          lynn – I am fairly sure the SOL for credit card debt in Illinois is 5 years. It is a good idea to provide the collection defense attorney a copy of the summons for them to review and advise from there.

  35. Hey there. I got a notice on my door today (citation). From my county officer stating that I’m being sued by citi financial in the amount of 4732 and I have until April 15th to file a answer. Iv never been through this and could really use some advice. I just want to come together on a settlement offer and go no further. Is that even possible?

    • Michael Bovee says:

      Holly – negotiating a settlement after just being sued is pretty common. Sometimes you are able to come to an agreed amount to settle that you can afford to pay in a lump sum with little effort. Other times, in order to get to an amount that is fair and affordable, you need to defend the suit. I know you want to settle and have this go no further, but when it comes to settling when sued, your success will depend on several things.

      I have more feedback to offer, but want to get some additional details first.

      Is Citifinancial listed as the plaintiff, or is there another name there? I am specifically asking if you are being sued by a debt buyer.
      What state do you live in?
      When was the last payment made on the loan?
      What is the name of the law firm suing you?
      What amount of money can you pull together in a lump sum to offer them as a settlement?

      If you can answer those questions in a comment reply, I can provide additional feedback.

  36. Bryan T. S. says:

    My wife and I were recently issued a summons from a debt collection attorney. We will answer it in the time alotted. Two seperate summons, two loans in default. One says (case#1) $3000.00 no mention of principal amount or anything else. The other(case #2) shows principal $1876.00 and another amount with interest and penalties $4876. I want to offer my tax return to pay off both debts in the amount of $2500.00 (high hopes they will except). How would I pay them and not get ripped off in return? If they don’t except, I have nothing else. What then? My wife and I nearly lost our home, but we crawled out. We had a job loss and hours cut all at once. Thank You for your time.

    • Michael Bovee says:

      Bryan – I would need to go into a host of details with you about your prior hardships and what is going on now to be able to get a feel for the 2500.00 being enough to knock these to lawsuits out. It may be easier (and less intrusive) if you call in for a consult to cover the details. You can call 800-939-8357 ext 3. A CRN specialist can help you understand where you are at with all of this.

  37. I have received a summons with no court date from Cap One and have sent an answer to the summons asking for validation on the Debt. I sent it Certified Mail/signature requested so I can make sure the Attorney, Nixon, Beals and ? receive the answer as well as the Court Clerk. When asking for validation of the debt including receipts and interest rate and calculations of how they came up with the $6550.00 They claim I owe. I stop pmts to them a year ago due to health problems that has caused me to file for SSD which has been denied twice and now waiting for a judge hearing which will take up to a year from March 2013 to get a hearing. The only money is from my husband. The accounts I had was negotiated by a arbitrator company and all are settled except this one with Capital One. With the help of the arbitrator company , we tried to settle for 50 to 60% & they would not take the lump sum. They wanted 80%. Thats when I sent the answer to the summons because the company I am working with said they think we can settle for less and since I am
    in Okla. they cannot touch my husbands cking or garnish his wages and I am unemployed due to my health and my checking account has very little kept in it. I have no job, no money but we do own our home and own a 10 acre tract in both my husbands name and mine. I realize they can put a lien on
    both but until we sell they will not see any money. no plans to sell anytime soon. My question is this: How long does it take for them to reply to my answer and will that happen before a court date is filed? Question 2: Do you think I will be able to get this attorney for Cap One to eventually settle for less and how much less should i negotiate when trying. Question 3; If they answer and are able to produce what I have asked for and it is accurate, I plan
    to let them get the judgement and wait them out for a lesser amount. My credit is already a mess now! My husband however has great credit and was not
    happy with me for having this credit. I am in OklaHOMA AND WHEN DO YOU THINK A COURT DATE WOULD BE SET AND WILL I GET MY ANSWER TO CALCULATING THE DATE PRIOR? THANKS FOR YOUR HELP.

    • Pamela – I am not sure if I am interpreting your comment correctly, but the way it reads to me is that you sent a typical debt validation request as your answer to a collection law suit. The time for a typical debt validation letter is before being sued. Once sued, you are still entitled to get details like what you are looking for with a debt validation letter, but you have to go about it in a MUCH more formal court process.

      What is the name of the debt arbitrator company you are using? Have they been of any assistance with how you are approaching the lawsuit?
      They may indeed be able to settle this Capital One lawsuit, but you are highly likely to be settling at the rate offered prior. 50 to 60% is a realistic target for settling with CapOne before a lawsuit, not after. I understand the financial situation you are in, and that there is not much for Love Nixon Beal to collect from if they get a judgment other than the property lien (assuming you stay unemployed, keep little to no money in a bank account with your name on it). But you should know that a judgment debt can grow with interest allowed in your state. Judgment creditors with liens on property are sometimes just willing to wait it out and get paid in full with interest once you refi or sell a property.

      In order to get a clearer understanding of how all of this will progress in the courts, when dates are set etc., you should speak with an experienced debt collection defense attorney, or call the court clerk and ask some general questions.

      If you would like to consult with an attorney who has experience in defending against collection lawsuits, and who is likely well familiar with Love Nixon Beal, post a reply with the name of the largest city nearby. I can email you contact info for an attorney who offers an initial consult free.

      • Hi Michael, I received a summons for a cap one debt after owing on it almost a year. I sent an answer to that summons, typed with my case #, address, Name and Cap one with attorneys name and address and information asking to validate the debt,calculations used to arrive at the amount they say I owe. Also, I asked for a signed contract I would have signed. I gues now its up to them to file a date for a suit and advise me as to when a court date will be. The Plantiff is Cap One but it is signed by Love, Beal and Nixon PC. I know it is an attorney /collection agency.
        I guess they will be able to provide the information I have requested in my answer to the summons. The co. I am have used for all my debt which is all settled but this last one with Cap One is Credit ARBITRATORS IN PLANO , TX. I SPENT SEVERAL THOUSANDS OF DOLLARS AND
        MADE A BETTER SETTLEMENT ON SEVERAL OF MY DEBT ON MY OWN AND GOT A BETTER DISCOUNT THEN THEY DID. THEY REALLY DIDNT DO MUCH BUT CHARGE ME ALOT OF MONEY. I have go some guidence on this suit however who arenot attorneys but are
        priority client specialist. I wanted them to call att office and try again to try to settle for 40 up to 60% but she thought I could get a better deal by answering the summons, which would give me more time and she thought they maynot be able to come up with what I am requesting on the answer. I am like you, I think I need to settle before a judgement to avoid more cost added and if then they will settle for say 50%, i will owe
        more after judgement. Yes, do send me an attorney in Ok City or Tulsa who can answer a few questions and possible try to help me. Thanks so much! I hate this but, you never think you will be sick or not able to pay your bills. I am really not sure if love beal and nixon bought this account of if they are actually suing for Cap One.??? If they bought the account, you would think they would settle for a lot less due to paying pennies on the dollar. I think they are suing for Cap one because they listed Cap one as the plantiff on the summons. The summons doesnot hav a courtdate,
        it just is giving me 30 days to answer the summons. Anymore thoughts? Thanks, SICK & TIRED of being SICK & SCARED

        • Pamela – Capital One has not been much of a seller of charged off credit card debt in the last several years (as in none). Love Beal and Nixon are not debt purchasers.

          I am sorry to hear you did not get much value from working with Credit Arbitrators, but glad that you were able to get through much of this working for yourself. I wish more people would do that first, and only look to getting assistance from a pro when they hit a brick wall.

          At this stage, given the details you provided, 60 to 80% will be a settlement target.

          You appear to still need to file an answer to the complaint. You would need to file the answer with the court clerk and send a court conformed copy to Love, Beal. I am sending you an email with some attorney contacts for you to call and consult with.

          Keep this in perspective: You ran into a rough financial patch, you did the best you could with the information you had, which led to you clearing off all of your debts but this one. You are almost out of the woods!

          • Michael, Thanks for your quick response! Yes, I have answered the summons to both the court clerk and Love ,Beal and Nixon as well as the court Clerk. I sent certified mail with signature requested so that I know they received it. I just answered it to ask for verification of the debt, receipts and a contract i had signed, is this the answer you said I need to send? No court date on the summons. Will that come after they show validation of the debt? I am not sure what is to happen now or am I just waiting to see if they can provide that?

            • Pamela – My best feedback would be to contact any one of the attorneys I sent you who defend people when they are sued for collection. If your goal is to settle the lawsuit by negotiating a somewhat lower pay off, the expense of retaining your own attorney may not be necessary. If you are going to participate in the court process all the way through, having your own attorney is ideal. Regardless, having an initial consult with one or two attorneys about your options when being sued by an original creditor (Capital One), will help you understand the process better, and help you make more informed decisions about how to proceed from here.

  38. Hi Michael,
    I was served this past weekend. I am being sued by Nudelman Klemm & Golub of Roseland, NJ. Asset Acceptance LLC of Warren, MI bought the $3,000 credit card debt from FIA Card Services N.A a wholly owned subsidiary of Bank Of America. (I’m not sure if Asset Acceptance bought the debt or if Bank of America hired them to collect, how do you tell?). I saved up about $1700 – will this be enough to settle? Should I mail a settlement offer or call? Please note my wages are already being garnished 20% from my student loan from college.
    Thanks!
    Nick

    • Nick – Asset Acceptance is a debt buyer. They are who sent the old Bank of America account (FIA Card Services) to the Nudelman collection firm. A couple of ways to verify this are:

      1. Call Bank of America and inquire as to who they sold your account to.
      2. Check your credit report and see if the old BOA/FIA credit report entry is reporting a zero balance owed now. It should show zero due them if they sold the debt off to Asset.

      Normally, when settling credit card debt after just being sued, 50-ish percent is on the better side of optimistic. Handled correctly in your situation, given that you are being garnished for a student loan (you can only be garnished one debt at a time), you could leverage that to hit your 1700 target.

      99 times out of 100 it is best to handle this over the phone. The document part comes when you reach an agreement. Post an update with what happens on your first volley with Nudelman Klemm and Golub and lets go from there. This type of thing may not be resolved in one phone call, so posting an update and discussing whats next is normal.

      • Thanks Michael. One last question, do I contact Asset Acceptance or Nudelman Klemm and Golub to discuss the settlement?

        • Nick – Nudelman for sure. I should add that if you are unable to make progress on settling with the law firm, you should consider filing an answer to the Asset Acceptance Corp lawsuit. This can take time for you to coordinate and you have a deadline for doing so. The point being: Negotiation and settlement efforts should be made early and consistently in order to preserve time.

          • OK. I’ll get a hold of them this afternoon or tomorrow and I’ll let you know what happens. Also, is this similar to normal bargaining? I start with a low offer, they go high, we end up some where in the middle?

            • Nick – Negotiating debt is indeed a bargaining process, but it is not like haggling a deal with a vendor at a kiosk in a port of call. Add the fact you are negotiating and trying to settle after being sued, and it gets “more different”. The collection attorney believes they have leverage, and that is why you are responding. They are right to think that. You need to be able to convey your hardship and the fact you are already being garnished for the next xx months etc,. If that does not go in a direction of a settlement you can afford to fund, you have to take the leverage they believe they have away. But more on that as becomes necessary.

              • Spoke to them yesterday. They offered first at 85% to settle, so I responded by saying I only have $1000. I then explained the garnishment for the student loan and the everyday financial struggle where I’m deciding between credit card payments and paying for rent. We broke down my monthly expenses vs income (there were no extra funds). I also said I have this money because someone is lending it to me. She said in her experience Asset Acceptance very rarely agrees to the bare minimum of 50%. So I said I can do $1500, but no more. I’m just waiting for the girl at Nudelman to get back to me now. She had to check if Asset Acceptance would agree.

                • Michael Bovee says:

                  I would follow up with them on Monday or Tuesday about the offer and getting documentation. If you cannot come to terms, and given the fact you have been sued and need to preserve time, you may want to mention to them in closing that you have been researching more on line and that you now realize you may be better off working with an experienced collection defense attorney.

                  If I were in your shoes I would look to button up a settlement by mid next week. If that can’t happen post a comment update and lets take the next step.

                  • Sounds good thanks for all the help so far.

                  • Hi Michael,
                    Looks like the lowest I could get them to agree on is $2,000. I can swing the $2,000 (barely) so I’m considering accepting the settlement offer. Do you think I would be better off seeking counsel from one of the qualified debt attorneys you have written about? I still have 12 days to respond to the complaint.
                    Thanks!

                    • Michael Bovee says:

                      The settlement offer is a couple hundred more than you were prepared for and offers finality and an end to being sued, where defending this has a cost, drags it out some, and with no guarantee the outcome is favorable. You have to weigh that.

                      If you want to connect with an experienced collection defense attorney in New Jersey, post a reply with the name of the nearest larger city and I will email you some contact info for one.

                  • I’m pretty sure I’ll accept the $2,000 offer. Of course there will be a written settlement offer that both parties will sign. I’ve read over some samples I’ve come across on the internet. What are the key points I would want on there? Ex. Obviously I need it to state “COLLECTION AGENCY agrees to consider the debt paid in full and agrees to not take further action to collect on the alleged debt.” But should I insist it says: “COLLECTION AGENCY agrees to remove any listing or information that the CLIENT may have placed on the CONSUMER’S credit report.” ? How about: “COLLECTION AGENCY agree to report to the credit bureaus that the debt has been paid in full.” ?

                    Again, BIG THANKS for helping me through this process.

                    • Michael Bovee says:

                      Nick – Check out this report for what to look for in a settlement letter: http://consumerrecoverynetwork.com/debt-settlement-letters-agreements

                      The fact you are settling a lawsuit prior to a judgment, or any real court progress, does not change what to look for in a written agreement much.

                      I would not get hung up on looking for terms like you posted such “alleged debt”.
                      You will not get an agreement out of the attorney, or the collector, about removing anything from your credit report. Any reporting item should reflect it has been paid (whether in full or for less does not change much), and show a zero balance. Check your credit reports within 60 days of payment and make sure that is the case.

                  • Michael,
                    Just received the settlement agreement and I’m supposed to sign and fax back today. However, no where does it mention that the reported item will show a zero balance. However, they do note they will notify the court that the matter has been settled. And they state the matter shall be deemed dismissed with prejudice.
                    Do you think this is OK?

                    • Michael Bovee says:

                      Nick – Generally speaking (as you are best served speaking with your own attorney about this type of thing); yes, you have verbiage in hand to hold them to. Any credit reporting that does not get updated on the creditor/debt owners part, can be corrected by you if necessary.

                      Congrats!

  39. Jennifer S says:

    I just found out that I am being sued by Discover Card and they have retained Michael J Scott as their attorney. I haven’t been served yet with the lawsuit but I was able to verify with the county that it’s been filed. Last I knew I owed 1725.00 on this debt. I live in Texas. The last payment that I made was some time in May 2009. My credit reports show that Discover card started reporting the account as 30 days delinquent in August 2009, with it being charged of in February of 2010. I know the SOL in Texas is 4 years and they are right at the brink of being able to file the suit. I’m hoping that with in the next three weeks I could come up with $900 to settle the account but that may not be a guarantee. What should I do? Should I go ahead and offer to settle the account for the $900 and make payments if need or should I let it go to court (I plan on showing up for the hearings)? Also should I go ahead and answer the lawsuit in some form or fashion? Any help would be greatly appreciated.

    • Michael Bovee says:

      Jennifer – 900 to settle the Discover account would have been a realistic target if you were not about to be sued by Michael J Scott. You are more likely going to need to add a few hundred to your settlement target at this point. I am not taking into account the fact that you are going to be sued for more than the amount you shared in your comment as the total balance you last knew about.

      It is not a great idea to call in and start negotiating a settlement unless you are certain you can come up with what ever amount you agree to. You may be able to set up affordable monthly payments for the full amount that way though.

      There is nothing to answer until you get served the complaint. If and when that happens, and assuming you are unable to put together a plan now to be proactive with negotiating a settlement with the Scott firm, post an update comment and lets go from there.

      • Jennifer says:

        I was able to come up with the money and settle the account for a 1000 and some change as a lump sum payment. I already got a settlement agreement and included that with my answer to the court. I did finally get served papers but I’m hoping that it is all taken care of now. The court told me to be sure to check in and get status updates on the case. But the attorney’s office said that as soon as they got all the paper work that try would drop the suit.

  40. Michael,

    Thank you for having this site. Reading everyone’s story gave me the courage to also ask you for guidance.

    I am a military veteran that found myself in the same unemployed status as many other veterans. I tried to find a job, but I was either over or under qualified. I tried as long as I could to keep up with my bills, I stopped paying on Cap1, so that I could pay the other bills. The payments for Cap1 were so high, I just couldn’t do it anymore, and they wouldn’t take anything less.

    Cap1 used Frederick J. Hanna to collect the debt. I returned their debt collectors call once and was ridiculed. I started to understand why so many military veterans are committing suicide; because for a minute I felt suicidal. I cried the entire day. I couldn’t find a job, I couldn’t pay my bills and someone was treating me like an idiot.

    Things have just started to look up and down for me; I found a job recently, but a lump was also discovered on my breast a few days ago. My fear is that I commit myself to some form of payment plan, but can’t fulfill it if the lump turns out to be cancer and I have to leave my job.

    I was about to address the Cap1 issue by contacting the debt collectors again, but I got a letter in the mail yesterday by Berry & Assoc (advertisement), stating that a lawsuit or garnishment had been filed against me by Cap1 and to consider bankruptcy. According to Frederick J. Hannah, I owe almost $7K. I honestly don’t think that $7K is worth filing bankruptcy over.

    I’m making about $2,500 a month right now, what would you suggest I do?

    • Michael Bovee says:

      Denise – I am traveling all of this week, otherwise I would answer by asking you to get in touch with me directly to go over your situation and the options that would make the most sense. I agree that filing bk on 7k does not make much sense, unless there are other issues to contend with. I would suggest you call in and talk with a CRN specialist to go over some realistic options. There are more limitations for maneuvering through this when you are being sued on a Cap1 account. Cap1 is great at creating TV commercials. Just not that great at helping people work through their challenges when life hits their account holders.

      Call in and talk to one of us at 800-939-8357 ext. 3.

  41. Jennifer says:

    Hello,

    I was served with papers (summons) in November 2012 for a credit card account through Wal-Mart (GE Money Bank) for $3,000. We last paid on this account in Oct. 2008. We opened the account in Texas and then moved to California. I had a very part-time job and my husband could not find work. When he was finally able to find work his paycheck was garnished due to his student loans. We got really behind and then we got pregnant and on and on…
    After doing some online research I realized that this account was beyond the SOL of 4 years. I filled an answer with the courts and then about two weeks ago I received something from the law-firm representing the company that bought my debt. It is asking to verify the account and a lot of other stuff I don’t really understand. My husband and I would really like to settle this debt but I’m nervous about talking to the law firm. Do you think I might have a good chance of settling this debt for 70% of what we owe? If I call and try to negotiate a settlement dose the SOL start over? Thank you in advance for taking the time to respond.

    • Michael Bovee says:

      Jennifer – Settling a debt after you have been sued for 70% of the balance has a high percentage chance of success. Your concern about resetting the SOL is not major if you are ready to fund the settlement in a lump sum single payment. Having said that, there are concerns for resetting. It is not all that common though, and even less so in California or Texas. Ideally you would want to consult an experienced consumer attorney on this concern.

      It appears the SOL timeline is really tight – you shared a one month difference. Who is the debt buyer and collection attorney you are dealing with?

      • Jennifer says:

        The attorney is Winn law group and the debt buyer I’d precision recovery. Thanks again.

        • Michael Bovee says:

          I would encourage you to speak with an experienced collection defense attorney in California about proceeding with a settlement, or defending the suit as beyond the SOL. Speaking with this type of an attorney for a consult has no cost, so it makes sense. If you retain the type of attorney you need, you may pay less than the cost to settle at 70%.

          If you would like me to send you some contact info for the type of attorney you should look to consult with, let me know in a comment reply and I will email it to you.

          If it were me in your shoes, and I was to call the Winn law group to see about settling the Precision Recovery collection account, I would lead with something like “I am not admitting to the debt, but with the drain on my time currently, I am curious what this can be settled for so I can compare it with the costs on my time and also the cost of hiring an experienced collection defense attorney”.

  42. Hi
    I have being sued for $15000, and i contacted the debt collection attorney and offered $2500, they refused, counter offered $4500. i received a letter stating that they are in recipt of the offer, but they need my employment history, bank statements , tax return for 2010, 2011, $2012,before they would agree for this account. I am so afraid to give my entire details. what should I do, they called me and asked for date of birth and SSN. what should I do.
    I dont have a court date yet and want to settle before taking it to court. How should I handle this situation. need your expert help.
    Thanks
    E

    • Michael Bovee says:

      eapen – Your first offer was not all that realistic for negotiating a debt you are being sued on. The counter was more in line with trends for settling out of court (depending on who you are being sued by and the attorney they hired).

      Post a reply with answers to the following questions and I will respond with more feedback:

      What state do you live in?
      Who is the original lender on the debt? Is that the same as the plaintiff suing you? If not, who is listed as the plaintiff? What is the name of the attorney debt collector suing you?
      When was the last payment made on this account?
      Have you filed an answer to the complaint/lawsuit with the court?

  43. I just want to say, the attorneys are Hammerman and Hultgren, when i spoke they said there is a possibility to settle for 4500 dollars but they need pay stubs, bank statements and tax return forms for last 3 years. Should i send all these documents to collection agency or wait until I meet the mediator. I am afraid to give them the documents because i feel they may garnish my wages or assets. should i hire an attorney. i did not hire since it was too expensive.
    Need your expert advice.
    thanks

    • Michael Bovee says:

      eapen – I had not seen this comment before responding to the one you posted before it. I would still like for you to post answers to my other questions before offering more feedback. You may share something that helps me better answer your question about what next.

  44. Hi again Michael,
    Its Pam from Okla. again. Thanks for help back on 3-29. I, as noted before had sent a validation answer to the summons I received prior. I received a letter from Attorney for Cap 1 in reponse to answer giving me Caps add and last 4 digits of account # and last 4 didgits of my SS # which is not the validation I asked for. I never received any mail from anyone since my last payment to cap 1 back in March 2012. I asked for in my summons an signed
    contract and charges with interest and receipts of how they arrived at the balance of over 6 k. I have not even received a statement in a year more or less.
    Don’t they have to provide this to me and do I have to ask again for it? The letter I got from them which I guess is the validation they are sending me was not sent certified mail or sent to the court clerk. I called the court clerk a day or so after receiving this letter and no suit as of then had been filed and they didnot receive this letter as I did. What do you suggest I do at this point. I would like to settle for 50% or less but I would also get a validation from them showing where they arrived at the balance they say I owe.

    • Michael Bovee says:

      Pamela – You said ” I called the court clerk a day or so after receiving this letter and no suit as of then had been filed”. It is odd that the court had no record of the suit being filed.

      I really would recommend you contact an experienced debt collection defense attorney. Some of what you have said just does not add up. You can have an initial consult usually for no fee, so it just makes sense to run this by someone in Oklahoma who deals with Capital One lawsuits often.

  45. Thank you , the answers are

    AZ

    Orginal lender on the debt is Triad guaranty insurance corporation, the same is listed as Plaintiff. the name of the attorney suing is Jon.R. Hultgren. (Hammerman & Hultgren P.C)

    After we short saled our home we did not pay anything, we short saled our home on December 2009. (we were asked to sign a promissary note by Triad Guaranty insurance towards PMI for short sale on November 2009) They are suing for 18500 now (includes attorney fees)

    I have filed an anwer within 20 days in court and the court replied that they have set up an artibution before july 1st 2013.

    I was trying to negoiate and pay off and the last letter I got from them states that : The office is in receipt of your counter offer in the amount of $4500. our client is requesting financial documents to review priorto reviewing for a reduced settlement. when I called they asked for pay stub, bank statements for 2 months, bank account number, employers name and tax return for 3 years within 10 days.

    I am eagerly expecting your response about how to handle this situation. I am ready to settle this issue.

    • Michael Bovee says:

      eapen – I am going to encourage you to call in and speak with a CRN specialist about your situation. There is more to discuss here than we would likely be able to cover adequately through commenting back and forth. Consults do not cost anything. Call 800-939-8357 ext. 3.

  46. Linda Rodriguez says:

    Hi, Ii am writing on behalf of my mother who lives in Texas. she was sued by Michael j. Scott for a capitol one credit card . The court case was dismissed and closed, then three weeks later she recieved a letter saying that case was reinstated. My mother is on social security and her health has been on a downward spiral since 2009. She has more bills than income coming in. The credit card is according to them owed from 2008 2009. I was informed of all this and since she has noone to help her im trying to find any help or answers online.

    • Michael Bovee says:

      Linda – What is your ultimate goal with helping you mother? Do you want to work toward settling the lawsuit?

      • Honestly I have no idea what to do. Ive never been in any kind of situation like this or has she and there isnt much I can do for her financially. She already has a bunch of medical bills and such do to her age and health. She can’t afford to hire a lawyer of any kind. We just simply do not know where to even start.

        • Michael Bovee says:

          Linda – If your mom is overwhelmed with other debts beside the one she is being sued for, I would recommend consulting with a bankruptcy attorney first. Most bankruptcy attorneys offer an initial consult at no cost. Filing would likely mean relief from the medical debts and the lawsuit.

          Texas is one of the more favorable states for protecting assets, like a home, in bankruptcy. If you and your mom learn something in the consult that gives you pause about filing bankruptcy, post an update to this comment string and lets go from there.

  47. Thanks Michael: MAYBE I AM NOT MAKING MYSELF CLEAR. THERE HAS BEE A PETITION AND SUMMONS FILED BUT THEY SAID I WOULD HAVE TO BE SERVED AGAIN WHEN THE ATTORNEY FOR CAP ONE DECIDES TO FILE SUIT AGAINST ME TO GO IN FRONT OF A JUDGE. IF THEY DONOT FILE AGAINST ME TO GO BEFORE THE JUDGE WITHIN A YEAR, THE PETITION AND SUIT WILL BE DROPED IS MY UNDERSTANDING. MAYBE THEY JUST LIKE TO SCARE PEOPLE INTO PAYING WITH THE SUMMONS AND PETITION! ACCORDING TO THE COURT INFORMATION, THE ATTORNEY FOR CAP ONE HAS PAID 205.00 JUST TO FILE THE PETITION AND SUMMONS AGAINST ME. IF I DONT ANSWER THE SUMMONS WITHIN THE 30 DAYS, THEY WIN A JUDGEMENT AGAINST ME AUTOMATICALLY. OF COURSE I ANSWERED
    THE SUMMONS ASKING FOR VALIDATION SINCE THIS COLLECTION AGENCY/COLLECTION AGENCY HAS NEVER NOTIFYED ME AT ALL UNTIL THEY FILED THE PETITION AND SUMMONS. I WOULD HAVE THOUGHT THEY WOULD HAVE SENT ME A LETTER AFTER CAP ONE
    REFERRED ALEGED ACCOUNT TO THEM. THE ACCOUNT HAS BEEN WITH THEM SINCE LAST OCT 2012. I THOUGHT THE FAIR DEBT COLLECTION ACT GIVES A PERSON 30 DAYS TO DISPUTE OR ASK FOR VALIDATION AFTER THE FIRST NOTICE THE ALLEGED DEBTOR RECEIVES. THE SUMMONS AND THE PETITION WAS THE FIRST KNOWLEDGE I HAD THAT THIS ALLEGED DEBT WAS WITH A COLLECTION/ATTORNEY. I WNAT TO KNOW HOW THEY ARRIVED AT THE BALANCE THEY ARE TRYING TO COLLECT AND A COPY OF A SIGNED CONTRACT WITH MY SIGNATURE ALONG WITH THE INTERST THAT WAS CHARGED TO MAKE SURE I AM NOT BEING OVERCHARGED. 5 DAYS AFTER I SENT MY ANSWER TO THE SUMMONS, I GOT A LETTER FROM ATTORNEY JUST GIVING ME THE PLANTIFFS
    NAME AND ADDRESS AND THE LAST 4 DIGITS OF MY SS# AND LAST 4 DIGITS OF THE ACCOUNT #. I BELIEVE ACCORDING TO THE FAIR DEBT COLLECTIONS PRACTICES, MY UNDERSTANDING IS I HAVE 30 DAYS TO ASK FOR VALIDATION BUT WHAT I RECEIVED FROM THEM IS NOT VALIDATION THAT I OWE THIS DEBT. I SHOULD NOT HAVE TO PAY SOMETHING UNTIL THEY,THE ATTORNEY, PROVES I OWE IT. DO YOUR FOLLOW ME? I WILL CONTACT ONE OF THE ATTORNEYS YOU HAVE PROVIDED FOR ME, BUT I JUST WANTED YOUR THOUGHTS. THANKS, PAMELA

    • Michael Bovee says:

      Pamela – I do follow you. I have somewhat of a disconnect with what you are experiencing, not so much with what you are saying. This is part of why connecting with a collection defense attorney in Oklahoma (who has likely dealt with Love, Beal & Nixon plenty), is a good idea.

  48. Brittney says:

    Hi, I recently was served with papers from a law firm which I believed bought my Bof A credit card. The amount is for 2261.55 and I have no means of hiring an attorney to pay or rather pay this debt off. I only work a part-time job and have a car payment and rent. I have not paid this credit card since 2010 so I am not sure what my next move should be. I don’t know if I should try to settle or file a motion with the court. PLEASE HELP!

    • Michael Bovee says:

      Brittney – There are valid reasons to participate in the court process when you are sued for credit card debt. The amount of your old Bank of America debt is small enough to measure not just the cost of hiring the legal assistance you cannot afford, but also the time you will need to commit to a process you are unfamiliar with – being your own attorney.

      What is the name of the plaintiff on the summons? What is the name of the attorney hired to sue you?
      If you were to settle this, what amount of money could you raise in a few days?

      • Brittney says:

        The name is CACH, LLC and the attorney is Daniel N Gordon P.C. Money is extremely tight and likely would only be able to pay a couple hundred dollars. That’s why this situation is so tough, I would not be able to settle this with the amount they would want. What would the court do? Set up another payment plan, garnish my wages?

        • Michael Bovee says:

          Brittney – If a judgment is entered in the court it can result in wage garnishment. With a limited income, you may qualify for full or partial exemptions from garnishment. In order to qualify for exemptions you generally have to go through the court to establish that fact (after a judgment is entered).

          The limited amount of money you have is not going to settle a lawsuit. You could entertain a payment plan for the full balance though.

          Even though you are tight on funds, I would still encourage you to speak with an experienced collection defense attorney. Most of they type of attorney I am referring to offer an initial consult at no cost. You could learn something in the consult that helps and/or set your mind at ease. You may even speak with an attorney who is willing to help you at a discounted fee.

          If you post a reply with the name of a nearby larger city I can email you contact info for attorneys nearest you.

  49. Hi …. Received a summons to appear in court within 30 days . Being sued for 3355.69 by Mullooly , Jeffrey , Rooney & Flynn on behalf of FIA Card Services. Can I call this attorneys office to try to settle before appearing in court ?

    • Michael Bovee says:

      Lisa – Yes, you can certainly contact the law firm FIA (Bank of America) and negotiate a settlement to avoid court. What are you prepared to offer? It is best to target an amount you can settle for and that is also a realistic amount for them to accept.

      How long has it been since a payment was made on the account?
      What were the reasons that forced you to stop payments originally? Are there existing hardships?

      • I can offer almost the whole thing … It’s been probably over a yr since last pmt . We’ve had some hardships with the business my husband owns , plus some health issues . Hoping to resolve this before it gets worse. The summons just says appear in person witching 30 days . Should we call and go to the court ? Or just call the lawyers first and go from there ??? Thank you for your time and advice . This is the first time in 25 years we have ever been in this position .

        • Michael Bovee says:

          Lisa – You could settle this prior to court by calling Mullooly , Jeffrey , Rooney & Flynn to negotiate the settlement. I have seen settlements that reach this late stage of collection (being sued) get done at 50%, but a more realistic target amount is between 60 and 80%.

          If you reach an agreement, do not make a payment until you have a document from them that outlines the deal. This report will give you an outline of what you are looking for in the document they send you: http://consumerrecoverynetwork.com/debt-settlement-letters-agreements

          If you cannot strike a deal before hand, yes, I would suggest being a proactive participant in the court process. It is best to do that with an attorney of your own, but not just any attorney. You will want to work with someone who has debt collection defense experience. I can help you locate one nearest you if you post a comment reply with a larger city nearby, but lets see if you get to that point.

      • * within not witching !!! Haha !

  50. I’ve been working with a debt settlement company for about 6 months, and as part of the plan, they told me to stop trying to make payments on my credit cards as I was unable to keep up. I just received a letter from a lawyer (Stephen P. Lamb) saying that he had been hired by GE Capital Retail Bank to collect the debt from me. He gives me 30 days to dispute the amount owed before he actually sues me. The amount he says I owe in the letter is about $2000 more than what the balance was on the card when I stopped paying 6 months ago, so I don’t know if I should dispute it or not. There is no way I can settle this though, so I don’t know what the next step should be. I contacted the debt settlement company and am waiting to hear back from them. I saw that you’ve been responding to everyone, so I decided to comment here.

    • Michael Bovee says:

      A – Have you settled any of your debts in these first 6 months? Most settlement companies have you send in money to a special purpose account each month. How much money do you have saved up in that account? How much do you send to it each month? Are there fees being deducted from the monthly amount you send each month?

      You have a few options to consider. My feedback would be better if I knew the answer to the above questions, and also the amounts on other debts you have in the plan and who those amounts are owed to. This way I can share a clearer risk analysis with you. Post your answers in a follow up comment reply and lets go from there.

      • Thanks for responding! I have a total of 33,000 in debt with Capital One, Chase, Citibank, and GE Capital Retail Bank. I know it’s a lot. My husband and I were young and not very smart in the past (although all the debt is in my name because I transferred his balances), and had been trying to get out from under this for about 4 years when we decided to go with debt settlement because we had made very little progress. The amount the letter from the lawyer says we owe is 12,000, but the card had a 10,000 balance when we stopped paying. We have been paying 271 every 2 weeks since we started the program, and we have about 3300 saved up in our “special account.” The company updated me recently that they have extended settlement offers to both chase and capital one (the two lowest balances), but have not reached an agreement yet. They do not deduct fees until a settlement is reached and they have obtained my permission to withdraw the funds to pay the settlement. We have a little more income now than we did when we signed up, and I was about to increase our contributions to the account, but now I’m not sure if I can do that or if I’ll need the money to pay off this lawsuit that is coming. I thought maybe we could come to an agreement on payments with the GE Capital Retail Bank account and remove that account from our debt settlement plan, but then I don’t know if the program will allow for that, or if other creditors will be able to find that out and come after me. I’d appreciate any advice. As I said, I’m waiting to hear back from the debt settlement company, but I feel pretty sure they’ll just try to get me to stay in the program. At this point I don’t really know who to trust, and I’m really worried this will affect my family more than it already has.

        • Michael Bovee says:

          A – My feedback is going to use round numbers based on historical and “right now” trends with your credit card banks, current balances, and timelines.

          With 33k total debt, were you to settle it today you would need between 13 and 15k (not considering the fact you have been sued). When you ad a debt settlement companies fess to that (not sure what your company charges), you could need another 6 to 10k. If I assume the middle of that it would be 8k plus the 14k to settle with Citibank, Chase, Capital One, and GE. With 22k needed, and by saving 550.00 each month, you are going to be at this for 36 plus months.

          The settlement company extending offers to your smallest balances (Chase and Citibank) may make sense from several angles, but when set beside the fact the Capital One is the most litigious and likely to sue out of your list, I do not agree with that approach. How much is your CapOne balance?

          Now for the GE Capital Retail bank lawsuit:

          You realistically need more than 50% to settle this debt without progressing through the court process. You may be able to settle it for 50 to 60% with documented hardships. If you do not have job loss, medical issues, or other extenuating circumstances, the negotiation target may/may not be higher.

          You could defend against the suit and buy time to come up with more money in order to settle for a lump sum. If GE Capital is the named plaintiff in the suit, that may be one of your better options. You are waiting for your settlement company to respond to you about next steps. Post an update with what they are suggesting your next steps should be.

          I would not commit to any path that extends your settlements out as far as your plan looks to be right now. You should look for ways to accelerate this. In my opinion, your priority will obviously be the GE account you are being sued on first, followed by a strategy that defers the risk of being sued by Capital One, then manage your smaller balance accounts with Chase and Citi.

          You have 3300 on hand for settling with GE right now. Can you pull additional money together by being creative? Loan from friend or family, sell unused/rarely used items etc?

          • I spoke with the debt settlement company today, and they told me they will just treat this lawyer as they treat any other creditor since I haven’t actually been sued yet, and begin negotiations with him. I did go ahead and increase our bi-weekly contributions because of our increased income, which should accelerate our completion of the program. They said that we have a good enough amount in the account to start trying to reach a settlement with the lawyer, and that at this point I don’t need to take any action other than sending them a copy of the letter I received. They also seemed to be familiar with the law firm when I gave them the name of the lawyer. They said that if/when it actually becomes a lawsuit, they will help me figure out what to do. He mentioned that I’ll need to prepare an “answer” document if/when this happens, but he said he feels confident that I will be able to settle this without actually having to go to court. Again, I really hope the debt settlement company is trustworthy, but they haven’t done anything yet to suggest otherwise, so at this point I feel a little bit better about the situation, but it’s still worrisome. I think you misunderstood about my accounts though. The Capitalone account is small, less than 1000, and it is one that the company has already extended a settlement offer to but hasn’t reached an agreement yet. The two largest, for which a settlement offer hasn’t been extended, are the Citibank card and the GE Capital Retail Bank card. We are trying to come up with ways to get some money together in case we need to leave the debt settlement program and figure this out on our own. Thank you for your advice, and please reply if you think there is anything else I need to know!

            • Michael Bovee says:

              A – I apologize. It was not so much that you were not clear. This is a page of the site dedicated to negotiating and settling lawsuits. I was just in “Reader has a debt collection lawsuit” mode.

              Many debt settlement companies and consumer attorneys do run in to each other frequently when helping their clients and customers. It can simplify, or even complicate things.

              I do not know the name of the settlement company you are working with. You do not have to share that in a comment here if you do not want to. It would be good to know the fees they charge though.

              As far as CapOne account – thanks for the additional detail on that. I do not recommend accounts be settled if it can avoided when they are that low of a balance – especially with Capital One. There are several reasons for this, but you are already on the path you are on, so nothing to get hung up about.

              It is good that you are thinking creatively on ways to raise funds. Money talks when it comes to settling, whether you use a debt settlement company or not. As you can tell from reading the CRN site, we are huge fans of doing the settling yourself whenever possible, and only using a pro when you need to.

              Please do continue to post updates and questions along your journey.

  51. I need serious help with summons and negotiation. This is scary and I don’t know where to start.
    Last night (April 28th saturday at 9pm) I received a knock at my door and received papers from a lady. “copy summons consumer credit transaction” Plaintiff Cach,LLC. The date says March 22 and filed April 8th.
    I open all my mail, good or bad, and I never received this notice before.
    The debt is $1885, which I know I owe. There are 10 different cause of actions listed.
    This is like the 4th collections agency on this debt. They claim they are a law firm.
    I am completely broke. Finally getting back on my feet and am able to pay the basics. I have no way to pay them except for offering a small amount I can borrow. Around $200 plus a really low payment plan. I had tried with the first collections over the phone but they didn’t want to work with me so I stopped answering. When this company first left a message they were saying the amount on the voicemail in a harrassing tone so I ignored them. Hopeing to buy time until I got all my other debts paid and attacked this one. Now realizing my HUGE mistake.

    My questions are:
    1) Is it right to assume this is a law suit? There is not court date but the due date says 10 days to “Answer”. I never got this, the deadline has passed. What do I do?
    2) Do I still answer the court? What can I respond?
    3)If so can I answer them and call this company to make a payment plan?
    4) Can I still negotiate small payments?

    I am in a position that going to court I literally have nothing to give. Would like to avoid court entirely so I could keep working. This is the biggest debt I have (besides my school loans) and since 2010 I’ve slowly paid off my smaller debts. I just can’t afford this one now and another smaller credit card I owe. Even if I loose the case there is no way for me to pay.
    What can I do?
    I searched everywhere and you have been the most helpful in responses.
    My sincerest thank you!

    • Michael, I was able to ask for emergency family help and bump the offer to a range from $1100 to $14oo. Hopefully I can do a lump some payment, get it all together in about 2 weeks. I know I mentioned much smaller amount prior. So that changes circumstances of my question a bit.

      Instead of my 4th inquiry ….How can I negotiate this amount. I’m kinda scared that I’ll get cheated somehow and still get sued. These guys are SUPER aggressive, I just don’t do well with that. Not sure what to ask for as proof or how to even start. Any info would be amazing and thank you SO much for taking the time to answer.

      • Michael Bovee says:

        Mari – With the additional cash you have a fair shot at settling this and avoiding a judgment. Post the name of the attorney firm suing you and lets go from there.

        • GREAT!! The attorney Firm is Daniels Norelly Scully & Cencere, P.C.
          Carle Place, NY
          Signed by Meredith E. Unger, Esq. (not sure if you needed this name too)

          Am I going to be at a huge disadvantage because I never got the papers and deadline is far gone?

          P.S. THANK YOU!!

          • Michael Bovee says:

            Mari – You will first want to connect with the firm and express concern over the debt they are suing you for. Be very brief in the fact that you are going to speak with a consumer advocate attorney about your options for defending the suit, but first are calling to inquire if they are willing to settle for the amount you were able to borrow from a family member. If that is an option to resolve the debt out of court, than to fax you the agreement and payment can be made after you and your family member have reviewed it, say 5 to 7 days out.

            If you get any blow back, post an update here. You will likely be able to defend the suit with legal help that will be less cost than paying the full amount if they will not budge, or refuse to settle for an amount you can afford.

            If you have any questions about the settlement wording, post those here.

            I would encourage you to make the call still today, or tomorrow. You do not want to lose time with connecting with your own attorney if it proves necessary.

            • Will call them in the early am and state what you said.

              Realized tonight that I can still answer the court -because of 30 days from filing date -to avoid default judgement. Its the very last day.

              I am debating…
              #1 File out the forms myself for answering without an attorney to buy some time.
              #2 Asking the court attorneys for help on how to answer. I have to travel an hour each way. Afraid of missing the file date if waiting takes too long on the trip back. Leaning more towards this option.

              My question is should I will make the decision depending on their settling answer or just go see the attorney?
              Should just file and I see them after I file for info?

              • Michael Bovee says:

                Mari – You would normally have XX amount of days to answer with the court when sued starting from the date of service (the other day when they showed up at your door).

                If it were me in your shoes, because the amount of money involved is relatively low, I would look at settling first in order to get finality. If that door is closed, I would defend the lawsuit.

                You do have time to navigate the process.

    • Michael Bovee says:

      Mari – You have a few options to handle being sued by Cach LLC.

      Answer the complaint in order to buy time to pull resources together to settle the debt. This means being a participant in the court process, which you said you would like to avoid.

      Answer the complaint with defenses and a high level of commitment to the process with the goal of getting it dismissed. Also puts you in court where you would rather not be.

      As relates to those 2 options I would highly recommend talking to an experienced debt collection defense attorney. The initial consult is usually free, so it makes sense to start with this. You may not be able to afford the attorney fees if you were to hire him/her, but then again you may be surprised.

      You can also look to set up a payment plan with the collection attorney for Cach. You would likely end up agreeing to a judgment in this effort. If you miss a payment you agree to, they can move to enforce collections with the judgment giving them extra methods to get money from you (wage garnishment, bank account levy). This is not a great option, but often a necessary one depending on your finances and goals.

      Ideally you would want to pull together what ever amount of money you can in order to settle with them in a lump sum. If you cannot do that in say the next week, answering the complaint to buy time in order to pull together money to settle with Cach LLC out of court would make the most sense, and help avoid a judgment against you.

  52. Tony Ira says:

    I’m being Sued by Portfolio Recovery for $2,100 . I got served papers a few months back and i panicked . I have never been in a situation like this or even been in a court till this day. I hired an attorney and paid him his fees . Till know I am unsure as to what this debt is about or who was the original creditor . I will be honest but back in 2005 i opened a business and ended up having to shut down due to hardships. I lost a lot of money and i would not be surprised if this may have been one of those old credit card debts. My attorney was not able to gather information from the suers attorney so we have no information. We are scheduled for a court hearing within a month. I was informed by my Attorney that I MUST be present. My question is do i really have to be physically present ? I did hire him to present me am i right ? I’m confused as to why they are continuing the lawsuit if they don’t have enough information or are not willing to work with us. This has been very frustrating as i am barely making enough to survive . I would like to know if there are any other things you may suggest . Like i said we are going into court “blind” as i have no information about this debt. Thank you for your time.

    • Michael Bovee says:

      Tony – If your attorney advised you should be in court, that’s what you do. If your attorney has debt collection defense experience, the lack of information to back up the claim will be one of the ways this gets dismissed.

      Has it been since 2005 that any of those old debts were paid?
      Were the debts in your name? If in the business name, did you personally guarantee the debts?
      What state do you live in?

  53. Hello, I have yet to receive the summons but was made aware of a lawsuit brought against me by midland funding.
    They are stating breach of contract and the amount is $4325.00.
    The last payment I made was in june 2009. Since then the debt has been charged off and midland are the 3rd collection agency to “own” the debt. I have tried settlement offers, the last being in april 2012 for $1100. It was rejected. I have heard nothing since and I’m concerned as, according to the courts web site the case was filed on april 19 but I haven’t been contacted at all. Do I wait for the summons or should I call them and try to settle again. The lawyer is sprechms n and assoc and I’m in miami, fl. The original debtor is citibank (home depot).

    Thank you

    • Michael Bovee says:

      mary – You are being sued, so calling Midland Funding will result in them referring you to the attorney. Yes, you can still negotiate a settlement. The amount you can settle for in a situation like this is often going to be higher than would have been the case were the account not placed with the attorney. How much can you come up with to settle?

      • Hi

        I previously offered them $1100 and they rejected it, I can come up with $2000. They have never sent any letters, emails or tried to call me about the debt. Do I have 20 days from the date of the court filing or do I wait til I get served and then the 20 days starts.

        Thanks

        • Michael Bovee says:

          Mary – 2k may be close to getting the deal done. Generally, the clock for responding to the court starts ticking from the day you are served. You do not have to wait for that to happen though.

          • Thanks

            I have left a message for the attorney handling the case. Hopefully they will work with me to avoid us both a trip to the courthouse.

            Thank you for your speedy replies and information.

  54. John Trevor says:

    Hi…My wages are being garnished for a credit card that belongs to my ex wife from 2002, which occurred while we were separated then divorced went thru in2005 …I was not summoned , I spoke to creditor and he insist I was summoned and that I failed to appear in court and that its my responsibility since we were married even if card is not under my name, he also stated he could not get money from Ex, she stated she did not have any money and followed to go after me. I offered to pay original principal amount of 2844.00 they do not want it they want $$5531.00 . My question is do you think I have a chance if I appeal to pay principal amount only and do I really need a lawyer? Can I do this myself? I have not found an affordable lawyer in AZ yet.

    • Michael Bovee says:

      John – You will have a tough time getting them to settle for anything less than the balance owed while they have a garnishment in place. With the wage garnishment they have in place they know they will get paid all of the money, plus judgment interest if it is being applied, unless:

      You leave that job.
      You meet your states hardship guidelines for either partial or full exemption from the garnishment.

      As far as fighting off the judgment and getting it set aside – how long ago was the judgment entered?

      It is time consuming and sometimes overwhelming to fight your situation with the courts on your own. But post an answer to my question above in a follow up comment and I will have more feedback. Also post whether the garnishment is causing a situation where you cannot afford other bills.

      • John Trevor says:

        Hi…thanks for your reply..I believe judgement was entered in 09 ..and yes I am the sole provider for a family of 5 and it will be a hardship with the bills.

        • Michael Bovee says:

          John – You have the ability to petition the court in order to reduce or fully eliminate a wage garnishment. The court will use the guidelines set up for your state weighed beside your income and expenses to determine what amount can continue to be garnished from your paycheck, if any. If your wages cannot be garnished you need to be aware of the many things I point out in a post about judgment debt here.

          I should have mentioned in my prior reply, but check to be sure the original complaint had you listed. You can find that in the court record.

  55. cristina says:

    My “new” husband just received a call from a collector needing him to pay back a credit card of $11,000 plus interest. In 2009 he stop paying on this credit card when he went through his divorce which was eventually shown as charged off. He also stop receiving notices from the credit card company too asking for payments over 2 years ago. He assumned this debt was going to go away but obviously, it has to be taken care of. I am now stepping in trying to get this satisfied.

    My question to you is can I go back to the credit card company and try to work this out with them explaining that he stop receiving payment notices 2 years ago. Will they help us at all? Can I negotiate this with them or do I have to deal with the collection company? I am concern they will add on more fee’s. I won’t deny this needs to be paid off and I want to negotiate the interest rate if I can and try to settle this with payments. That is all we can do for now. Thanks for your help.

    • Michael Bovee says:

      cristina – I can offer better feedback if you can answer the following questions with a comment reply:

      Who is the original creditor?
      Who is the debt collector calling now?
      What state do you live in?
      Have you received a collection letter in the mail recently? If so, who from?

      Post your reply and lets go from there.

  56. I got served papers today that I am being sued for approx $7000 by Discover. I am pretty sure it is Discover that is sueing me because they are listed on the lawsuit, not a collection agency. However a law office is listed as their attorney.
    I owned and managed an apartment complex for 10+ years and that was my sole source of income. I used my credit card for maintenance work I did on the complex. I am 63 years old. I had an heart attack and was no longer able to manage the property. Eventually tenants moved out and I lost the property. Because I haven’t worked for 10+ years I do not qualify for any government assistance (general assistance, disability, unemployment, tried it all). I am just waiting for my social security checks to come. I own a house, which I was underwater on until I recently defaulted and settled on my 2nd mortgage. I own a car which is paid off in my name. And I live with my wife and 3 adult children. I have no income, 64 cents in my bank account, and a retirement account (IRA). I cannot pay a settlement or judgement in this case. I have been living off withdrawing from my IRA and help from my children for the past year. What can this judgement do because I have no income and savings. Can they take from my IRA? Or put a lien on my house? What about make me sell personal property such as my car? I live in the state of CA so I heard that credit card debt cannot make me sell personal property and they cannot touch my IRA. Is that true? Sorry for the long post but I desperately need help as I cannot afford a lawyer. I am trying to save up to file for bankruptcy but don’t know when I will be able to do that.
    The court summons that came did not include any proof that I owe the debt such as signature or original contract. Would I be able to use an affirmative defense that they failed to state a claim? Or should I just respond to the lawsuit and explain my situation?

    • Michael Bovee says:

      Mike – Discover has not been a big seller of unpaid credit card debts in recent years. It is likely Discover suing you.

      Defending yourself against an original creditor is very different that defensing against a debt buyer. Much of what you may read online about defending credit card lawsuits, and what can work to some degree of success, is when sued by a debt buyer because they lack data and evidence of your debt that they do not get when they buy it. Discover has all of that information and can provide it to the attorney they contracted with to sue you. They do not need to provide much by proof of their claim at the beginning of the lawsuit, so your credit card agreement or other info no being part of the complaint they filed is normal (unless you are in North Carolina or a couple of other states that require it now).

      Your IRA cannot be garnished. Your stuff can sometimes be inventoried by the sheriff and sold, but it is a fairly rare occurrence, and is often only a collection tactic used in certain states.

      A lien can be placed against your property.

      I have a post up about navigating the details of a credit card judgment here.

      • Michael Bovee says:

        I should add that you can file an answer and explain your situation, but it is not going to matter much most of the time. The attorney for Discover does not care, and was hired to sue you and collect or get the judgment.

        • So it seems like in my current situation, the only thing a judgement can really do is place a lien on my property. When I get around to filing bankruptcy, can the lien be taken off my property with chapter 7? When I recieve social security, can they take that money?

          • Michael Bovee says:

            Mike – Filing chapter 7 bankruptcy would remove the lien and eliminate any further collection on the judgment.

            Social Security cannot be garnished at the source, and if your SS money is the only money deposited into your bank account, that money cannot be taken through a bank levy either.

  57. Cristina says:

    Hi Michael thank you for you help.

    Who is the original creditor?
    Captial One – Visa

    Who is the debt collector calling now?
    ARS @800 440 6613
    My husband gave me this message today. They called him on his cell this morning and he spoke to a women there briefly. All he told him was ” he needed to look at his old documentation and we would call the back”.

    What state do you live in?
    CA

    Have you received a collection letter in the mail recently? If so, who from?
    No, nothing in the mail from either the credit card people in over 2 years and nothing from this collection company.

    His credit report says collection/charge-off regarding this debt.

    • Michael Bovee says:

      Cristina – Capital One has not been a seller of unpaid credit card debts for years. They are also currently the most likely lender to sue for collection. You will not necessarily be paying additional fees to ARS as the collection agency, Capital One pays ARS fees out of what they get from you.

      ARS should be following up the collection call you got with a collection letter in 5 days. They will only have the account for 60 to 90 days. The account may get placed with a collection attorney after that.

      Setting up a payment plan with them, if you cannot come up with about 50% of the balance to settle in a one time payoff, should prevent the collection getting escalated to a lawsuit.

      How out of reach would it be to raise the money 5 to 6k to settle this?

      • tinacristina says:

        I wanted to share good news. I got the collection to negotiate and work with me.
        Offered $1000 down
        $633 for 3 months
        Pay off: $2800
        On a $12,000 debt..

        It’s possible I could be 1099 on the rest but they said they don’t generally report anything but put paid and settled on their end…whew!

        Ok. Now I got another question but will ask you below.

        Thank YOU for all your help…

        • tinacristina says:

          Note…the collectors did not tack on any interest fee’s either after the charge off! Again, I feel like this went smooth…

          • Michael Bovee says:

            The original credit card agreement will outline what happens in the event of default. Typically it spells out a default interest rate. The default rates are often in the high 20′s or low 30′s. The interest can often continue to accumulate after charge off, but the legitimacy of that has to be confirmed with the original agreement. Once sued and a judgment entered, California caps the interest allowed to accumulate on the credit card judgment at 10%. In other words, no more than 10% interest is allowed. It is capped off at that rate.

            You may not have a copy of the original agreement with Chase handy, but we can look at a process of elimination for what happened by knowing the date the judgment was agreed to and entered into the court record. Can you look up that date and post a follow up comment with the information?

  58. This blog is helpful. A Cook County Sheriff attempted to serve me, but I was scared to answer the door. I looked on the site and file shit files by Stellar Recovery on May 2, 2013 for $10K, Atty Blatt Hasenmiller in Chgo. The original loan was with HAND, however I question the amount. I was paying the bill faithfully until I was laid off in 2010, I just had major surgery and have no means of paying a lump sum. I do not want the courts to issue an automatic judgment because I have an house..HELP

    • HSBC

    • Michael Bovee says:

      Tesa – How much money can you settle the 10k lawsuit for in a single payment? Post an answer to that and I will have some feedback about negotiating a settlement, and other alternatives to think about too.

      • I don’t have any savings or means of getting any monies, prior to surgery I was only employed for an year….I’m still trying to catch up from being unemployed for 2 years….I literally love pay check to pay check

        • Michael Bovee says:

          Tesa – I am sending you an email to an experienced and affordable debt collection defense attorney in your area. You can call and consult at no cost. You may learn the most affordable approach to take on this is to defend the lawsuit on the old HSBC account.

          • Thanks for the quick response and the attorneys info, I will follow up and hopefully get this resolved.

  59. Sorry, did not intend to use profanity, typing on my cell, not computer savy

  60. I have have live between texas and Ohio. I have a ohio drivers license and houses in both states. I have a credit card debt with seven seventeen. I had 2 cards with them and they consolidated them into one loan. I paid up until march and then couldnt pay I am disabled but have property in my name. Attorney sent certified letter saying they want an answer to pay in 30 days or they will sue for $16,ooo. Please help should I stick with negotiating with Texas residency or Ohio? Bills been going to Texas house. They are saying i am a texas resident so thy have a texas attorney?

    • Michael Bovee says:

      carol – What is your ability to come up with money to settle the debt for less than the balance? The threat to sue should not be made unless it is going to be followed up on. Given what you shared, I am fairly certain you will be sued in the near future. If you are negotiating a lower payoff, or a payment with the attorney, Ohio or Texas is not really going to matter.

      Who is the collection attorney?

  61. I have a credit card debt that is over 9 years old and I live in Indiana. How long can they come after you for that? It’s with Bank America but they have sold it a whole lot of times. What can I do to stop this or what do I need to do? Greatly appreciate the help in this matter. Thank you, Kevin

  62. I’m being taken to small claims court and went and filed an Answer last week and was told it would be a couple of weeks till I hear back from the courts. Yesterday I received a voice mail from the debt collection agency taking me to court asking me to call them and was inquiring if I should contact them back or wait till I hear from the courts?

    • Michael Bovee says:

      j – what is your goal with the lawsuit? Are you defending it with the intent to get it dismissed, or are you looking to resolve the debt in the most affordable way possible?

  63. Hi, I have been doing some research regarding my credit card debt and came across this site. I hope you can give me some direction. My husband and I have a BOA debt of about 19,000. Most of the debt on there is an accumulation of things like car repairs, necessary home repairs, etc. Several years ago we went through a period of unemployment for my husband, and found ourselves in a place where we had to use this card simply to live. By the time he was employed again, it had snowballed to a point where the monthly payments were eating up any extra money we had so that when an emergency did arise, there was no wiggle room in our budget to take care of it. It’s a monster that keeps feeding itself! We have two kids, one a special needs child. That has made it difficult for me to have a job because of needing to be available to care for her. Now, unfortunately, we are preparing to file for divorce. In looking over our finances, the money is just not there to pay this debt, and the payments are strangling us and trapping us in an unhappy marriage. We are not behind on our payments, but we just aren’t getting anywhere with it either. If my car broke down today or my water pipes burst, the repair bills would have to go on that card. I have talked to an attorney regarding my divorce plans, and mentioned this card debt. He said to just quit paying it, deal with the fallout, then settle it so we can all move on with our lives. I am terrified to actually do this. Once I miss one payment, there will be no going back. Thoughts?

    • Michael Bovee says:

      Karis – Missing a payment sounds like it is inevitable. Your situation with your Bank of America account is nothing to be terrified about. What you described is pretty common. What happens from here can be fairly predictable – which allows you to plan for and reach a successful outcome. I recommend you start reading the debt settlement and negotiation section of our site in order to set you at ease. Click the debt settlement tab at the top of this page.

      Is your soon to be ex going to be coordinating with you to accumulate the money to settle the debt as quickly as possible? Assuming you need about 6k to settle the BofA balance. How long will it take to raise this amount?

      • Forever. Well, almost. The strategy I was considering was to stop paying the monthly payments of $400, save at least $300 per month in a separate account (or a cookie jar!) and then use that savings to settle the debt…so 18-20 months? And yes, he will do all he can to contribute to that, but since I have been doing the finances for the past 2 years, I know exactly what money he has and doesn’t have….there’s only so much cash flow. To his credit, he has begun working an additional PT job (not big bucks, but it is something, and I appreciate the effort) to help ease the cash flow bottleneck a bit.

        • Michael Bovee says:

          Karis – I am not a huge fan of debt settlement plans that have to go beyond 12 months in order to save up the money to settle. Your risk of getting sued for the unpaid debt begins after the account is charged off, so 6 months late. This risk of being sued by Bank of America is not all that much right out of charge off, but the risk will increase more after 12 months late. Keep in mind that your balance is going to grow each month you are late.

          Is the account in both your names, or just yours?

          I would encourage you to speak with a couple of bankruptcy attorneys and compare what you learn from that with saving up for the settlement with Bank of America 18 months from now. I know you can be successful with settling the debt, but I would feel a heck of a lot better for you if you could shave 6 to 8 months off of your funding target.

  64. Hello! I was served for a credit card debt with a balance of $9500. The last payment was made in 2011. With attorney fees and court fees plus interest, the balance owed has gone up to $12,500. This is a credit card opened with a Credit Union. The debt has been transferred to a a debt collection agency and they have hired a lawyer through their agency. The attorney works in their same office. We have spoken with them and have offered different amounts to settle. He first told me we could settle at 20% of the debt, because he saw we had no way of paying. I regret not getting that in writing. I eventually was able to get the 20% and called to offer it to him. He raised the settlement to 80%. There is no way we can pay and no way to make the monthly payments they are requesting as well.
    There has been a filing with the court and we received documents they are providing in court as proof. They are requesting us to send them similar documents to them in our defense within a certain time frame. I am wondering what info I need to provide. I have two children with special needs. Do I need to provide documents of their diagnosis and why that is a part of the reason we are unable to pay? I am not sure what they are needing and how likely it is that they will settle. My dad offered to include some money to settle. We came up with a total of $5000, but they declined. We have no assets, no extra money aside from paying for our monthly needs. We have no other debt. The reason we are in debt is because we put mortgage payments on our card, after the economy crashed. Our income had decreased in commission. I just don’t understand what they are thinking. I thought they would have done their research and would have found that there is no other money. I am wondering what to do from here. I want bankruptcy to be a last resort, as this is our only debt and our home has been foreclosed on.

    • Michael Bovee says:

      Bonnie – I know you prefer to hold off bankruptcy as a last resort, but have you consulted with a bk attorney yet? You may find chapter 7 would be the least costly way to resolve the situation, and may even eliminate any lingering debt from the foreclosure (if any exists).

      When it comes to putting on a defense in court against the credit union lawsuit – its a process. Can you tell me if the name of the credit union appears as plaintiff in the lawsuit filed against you, or is another company named as a plaintiff? Being sued by your original lender, and one local, is tough to beat back – where credit card lawsuits by a debt buyer can be defended with a higher degree of success.

      • The Plaintiff is the debt collection Agency, not the Credit Union. Although the Credit Union is being listed as the only Witness that may be called. We have no lingering debt from the foreclosure. We only have this credit card debt. What would you suggest? And what documents should we provide, if we move forward with the court? Should we provide documents showing our children with special needs diagnosis, pay stubs, etc? Should I try contacting them again to settle at the end of the month? I heard that some Collection Agencies have quotas to make by the end of the month and that they are more flexible in settling during that time.

        • The other thing too is that the Attorney is from the same Debt collection Agency. We signed on the Credit Card agreement that we would pay Attorney fees. Do you think that with having their own Attorney, from their own Agency, that they would continue in court? What might the courts rule especially if we only make enough to support our family? What should we prepare for, if we do not file bankruptcy? I am wondering what they are able to do, if the family they are suing only have enough to take care of themselves. Sorry, lots of questions. Thanks so much!

          • Michael Bovee says:

            Bonnie – Thanks for the additional details. Yes, I do think they would continue in court. Your situation sounds like one where it will be tough to win out in court by defending against the claim. It is worth the time to connect with an experienced debt collection defense attorney about your situation. They may have already dealt with your credit union and/or the attorney suing you. They will have more first hand experience and can share that perspective with you. Most of the attorney type you would want to speak with on this offer a free initial consult. Post the name of a nearby large city and I can email you contact info for some to call.

            When it comes to having a judgment entered for this account, and where you are just getting by with your finances, they may not be able to do much in the way of collecting on the judgment. But that is little comfort when the balance of the judgment grows and will have a shelf life of 10 or more years. This post has more about handling credit card judgments.

  65. HELLO,
    Thanks for giving advice. Very helpful. I received a notice that I am being sued on my doorstep. This is from what you refer to as a debt buyer attorney. Collector purchased this account from Chase, who has already written it off. Per my divorce agreement this was a joint debt that the ex and I were responsible for. The ex has not paid anything as well as not paying court ordered child support. I know not having the money is not a defense, but was wondering if you can give me any other defense? My oldest son is in the hospital and has been for about 6 months. Also they gave me 30 days to respond dated 04/29/13 & as I said, papers where left on my doorstep. Lastly, they have only sent via mail a statement to me for a few months and never said they were going to sue. Not sure if proper notice was given???

    • Michael Bovee says:

      SHARON – Unfortunately, even though the divorce outlined your ex was to pay the Chase credit card debt, you can still be sued for it.

      If you are being sued by a debt buyer, there are a host of strategies you can use to challenge the claim. The first thing I would suggest you do is speak with an experienced consumer collection defense attorney. Most of them offer a free initial consult, so the price is right. Even if you do not retain one, you will learn a ton. Post a reply with the name of a nearby larger city and I can email you contact info.

      The proper notice of your being sued by a creditor or debt buyer is… being sued. If you were served the lawsuit in a manner that is allowed for in your state, than that’s notice. They do not have to warn you prior to filing in the court.

      • Michael Bovee says:

        I should add that there are some instances where you have to be given a notice of a right to cure first. But that is also state specific.

  66. Hello,

    Great summary and down-to-earth writing. I just had a quick couple questions.

    I am being sued for a credit card debt that was sold to a debt collector. The amount is approximately $1500. I responded to the original suit and now have been sent a copy of a MSJ.

    Is my best option to try and settle this? I don’t think I have a leg to stand on to defend it anymore. If so, who do I contact and how should I negotiate? I owe the money. We have just been so financially burdened that I have fall behind on a lot.

    Any insight would be helpful.
    Thanks!

    • Michael Bovee says:

      Jon – Whether your best option is to negotiate a settlement at this point would be based on your goals, how much money you can come up with to pay, and who it is you are dealing with.

      Who is the plaintiff?
      Who is the collection law firm suing?
      What can you afford to pay in a lump sum?
      How did you respond to the original suit?

      • Thanks for the reply.

        My goals are to pay it off but I’ve been looking for full time employment for months now. I guess how much I can come up with would vary on how long I have. I’d say possibly $600-800.

        The plaintiff is portfolio recovery associates. Their counsel is Virginia B. Albright out of Florence, KY.

        I admitted to having the card list on the suit and denied the amount and their ownership of my account.

        • Michael Bovee says:

          Jon – You are a bit set back with your answer partially admitting the debt, just not agreeing with the amount. Settling for a lump sum of 600 is not likely at this point. 800 is not all that likely either. If you were to respond in a way that the summary judgment was denied, you could reassert those targets and have a higher chance of negotiating the deal.

          They will be able to produce ownership. But may have a tougher time proving up the balance.

  67. I just got papers for a $3,700 that I owed citibank. I do have the cash, but should I still try to negotiate maybe paying only $3,000? The summons was initially filed June of 2012, but I guess they didn’t find me. I’m moving out of state for a new job in a few days and know I won’t be able to appear. Does paying in a large lump sum help in my favor of getting the amount reduced?

    Thanks for your dedication to this thread! Read some great information on here.

    • Michael Bovee says:

      csm – Depending on the collection attorney, and who hired them to sue (which debt buyer – assuming it is a debt buyer), the 3k will get the job done. You may be able to negotiate a better deal than that.

      Post a follow up reply with who is suing and I will have additional feedback.

  68. We have been paying off an old Discover bill about 6,000 of the debt that appearently became 12,400 some how last we knew it was 10,000. We have been making regular payments to the hired attorney for discover on a plan that was set up. Now we recieved a notice that we are being sued by them for an amount slightly less 12,000. We sent the response stating we didn’t owe that amount. Weeks later we recieved an another letter with papers to sign from the lawyer trying to explain that we had an ajustment lowering the payment although they were charging us a processing fee and that we only owed 6,500 more. Never theless we didn’t sign the paperwork and have continue to make the agreeded amout payments.
    Just reciently we recieved more paperwork asking us if we have contacted discover in the past year what is our other bank account numbers etc. formal questionare looks offical.
    we are already scheduled to go to court.
    should we hire a lawyer now?

    • Michael Bovee says:

      John – It is always best to work with a skilled attorney when you are in the courts. One with experience dealing with debt collectors and collection agencies is best. You have been paying on the debt as it is, so I do not know what will be able to be argued at this point. Making them prove up the amounts they are saying are owed may be one angle. Post a comment reply with the name of a nearby larger city and I can email you contact info for the type of attorney you would want to consult with about your next step.

  69. Hi i got a court order from shermeta, adams & von allmen p.c for a citibank card from sears. Its been 6cooking months since my last payment. Shows i owe $5750, can. i negotiate lower and a payment plan only source income we have is social security. Ive tried working out a payment plan with the original creditor for lower monthly plans but citibank/sears refused. What do u think i should do? Whay happens if i dont attent court? Thank u so much in advance

    • Michael Bovee says:

      Amir – If you ignore the court process they will end up with an enforceable judgment. Yes, you could likely set up a payment plan, or settle the account for a lower payoff amount. What can you afford to pay monthly? If you could settle the sears/citi account for half (or so), would you be able to round up the money? If so, how long would it take?

      • Thank u so much for ur quick reply. I can do about $100a month, i can probably get $1200 i dont have a car or a way to make it to the court. They are also suing for interest court and attorney fees, im willing to pay but cant afford that amount, a year after i signed up for the card they added all interest fees ehich made it hard to continue my payment plan

  70. Would it be possible to negotiate with citi/sears again?

    • Michael Bovee says:

      With the added fees you would be paying for 5 years plus at 100 a month. Settling for 1200 when sued is not likely. They will just look to get the judgment and try to collect after that through a property lien, or bank levy (social security cannot be garnished at the source).

      Do you own property?
      Are there other sources of money deposited in the same bank account your SSI payments go into?
      Are there other debts than this one with Sears? If so, add up the total and post that.

      • I dont own property, i have 2 other credit cards which im making payments on ($40 a month) i dnt have any other income. Thank u so much for ur gelp. This is very stressful, i have am trying to pay iff the debt but witg the added fees and high monthly payments, its hard. Should i call sears to negotiate a lower payment or do i contact the law firm, whatshould i say?

        • With the saers debt and two other cc i am currently paying, total comes to $7100

          • looking over the court summon, the court date was may 10, 2013, the subpeona was handed to a friend who was at the front door, and i just got it (may 21,2013) wha happens now? is it too late to contact the attorney? Please help! I would like to get this over with, its so stressful, thank u so much!

            • Michael Bovee says:

              Amir – Any payment or settlement arrangement would need to go through the attorney at this point.

              I asked about property and other debts to help determine if bankruptcy is a better option at this point. A total debt load of 7100 would make bankruptcy less appealing. But if you cannot settle due to lack of enough funds, and a 100 dollar a month payment plan is going to stretch you out for years, combined with the limited income, bankruptcy may still be your best option. You should at least speak with an experienced attorney about bankruptcy. Most offer a free initial consult. You can then better weigh what that means to you.

              With a limited income you may qualify for low income legal aid.

              As far as the late date of learning about being sued, call and talk to the court clerk and explain what occurred. The clerk cannot give you legal advice, but can certainly direct you to any form you can submit to the court in order to excuse any tardy response. This could buy you time to research what your best options are.

  71. tinacristina says:

    We have 1 credit card left to pay to a collector..then we can work on other thi8ngs like getting a home owning again.
    Here is the deal.
    The charge off of the card was $12,000 in 2009
    The collection company got a judgment to include interest since 2009 ($11,000 approx) and attorney fee’s of $1400.

    I read recently that it’s illegal to collect on interest after a charge off?

    We live in San Diego, CA and I am trying to work with this guy for some kind of lower pay off.

    Here is what he says.
    We owe:
    $12,000 charge off
    $11,000 interest
    $1400 attorney fee’s
    $24,000 total
    we pay 10% each month on this whole debt too with a $200 payment. and basically I only gain $40 credit per month.

    He said he take 60% pay off: $15,000 but is it legal, can he get us for the interest?

    He got a judgement on all this. My husband did this before we were married and I am trying to see if I can get this settled but for $7000 or 50% of the original charge off. Let alone, what about the interest …Is that legal to apply and collect for himself when the charge off was not included?

    • Michael Bovee says:

      Judgment interest is capped at the state level. I think California has a 10% cap. That said, I also remember CA being one of the states that allow for interest to continue to accrue at the contract rate – which is often the default rate the credit card was at when the account charged off. What kind of account was this? Who sued and got the judgment (name of plaintiff)? What was the date the judgment was entered in the court? Who is the attorney debt collector you are dealing with (if you are)?

      Congratulations on the other settlement you completed and posted about before this comment. You did great on that!

      • tinacristina says:

        This was a Chase Bank USA credit card.
        The plaintiff is Greater California Financial Services.
        The attorney was GCFS’s and not ours. We didn’t have one.
        It was a judgement my husband signed and did with them but he actually never went to court.

        So if the interest rate was 24% then you are saying GCFS has the right to collect and it’s not illegal then? Based on California state laws? I am not clear what a 10% cap means.

        Thanks again for all your help!

        • tinacristina says:

          Here was the link that I had read earlier about interest after a charge off …if it’s legal or not.

          thenest.com/pay-interest-fees-collection-agency-debt-

          • Michael Bovee says:

            The article referenced is mainly just generalities. It does speak to the original contract and what that allows, but ends there for the most part, other than referencing general federal protections. California has additional protections through the Rosenthal Act.

            Ultimately I would suggest you confer with a consumer law attorney about this, but would like to help you get to the bottom of how the balance ballooned.

            • tinacristina says:

              I too would like to know how this balloon. Once I pay off the other credit card in August I thought it would be a good time to start dealing with this one. I just think it’s awful that the company earns all the interest for a debt I bet they paid less than $1000 to own with a $20,0000 plus balance that includes that interest?….just frustrating and it’s actually legal…gosh that’s frustrating.

  72. Hi, I recently was served by Portfolio Associates assignee of GE Money Bank for $800. I currently live in GA. I am unemployed and do not have the funds to pay them at this moment. What should I reply when respond to the claim via the plaintiff answer form? Also do I need to get that notarized before i submit it? Should I go to court and ask for a payment plan or try and settle with them before. As I’ve stated my funds are extremely limited, I can barely pay my rent. Thanks!

    • Michael Bovee says:

      Tonya – You should speak with an experienced collection defense attorney in Georgia to get legal questions answered.

      Generally speaking, an answer to the complaint that you file with the court would not need to be notarized.

      You absolutely can look to settle the debt with Portfolio Recovery Associates quickly, before the case goes any further. Just realize that you need a lump sum to settle. If you are just looking to negotiate affordable payments, depending on how low you need to get PRA to go – through the attorney they hired – they may not agree to it. In that case you can look to the court, by participating in process, to assist in reaching a reasonable payment. Sometimes this will involve agreeing to the debt, and Portfolio Recovery getting the judgment, and you later showing you are either fully or partially exempt from garnishment etc. For more on this scenario read about judgment debt options.

  73. Hi Michael-I received a summons two days ago asking me to provide an answer to Asset Acceptance LLC ‘s suit against me for $7000 they say I owe. Original lender (Citi Card) sold the debt to them. When I paid my last pmt. in 2011, balance owed was $5400. I am getting ready to send my answer to them copying the court demanding proof that i actually owe this, including paperwork i signed with the original lender and proof that they purchased it and for how much. Is this a good strategy? Or should I call the lawyer and try to settle? If they dont provide asked documents, what happens to the debt? How likely is it that they will provide asked documents? My aim here is to settle low if possible as I cannot make more than $100 pmt per month. I would really appreciate your opinion.

    -Ash

    • Michael Bovee says:

      Ash – Responding to a collection lawsuit if you have viable defenses is always a good idea. Simply responding and raising issues that require them to substantiate their claim, like you outline in your comment, can open up the door to a better settlement, or even getting the suit dismissed. My suggestion would be to run your situation by an experienced attorney that deals with defending these kinds of collections – if you pursue this defense and want to set yourself up for the best potential outcome.

      From experience I can tell you that Citi does a better job of handling data and making that available to debt buyers later on. But that is just a general observation. It may not mean much in your situation.

      The reference you made to aiming for a settlement combined with only being able to afford 100 a month payment do not jibe. Settling means a reduced pay off agreement that you would either pay all at once, or over a shorter period of time. 100 dollar a month payments on say, a 50% settlement, would mean stretching this out a couple of years. That is just not that common unless you are agreeing to the judgment. Low monthly payments in that type of scenario often means no balance reduction, but more of a long term payment arrangement.

      How possible is it for you to raise a lump sum to settle this over a short period of time?

      • Its possible for around $3000 or so. Can settlement still possible if I get the judgement? Do they usually give me options or go straight to wage garnishment? Thank u.

        • Michael Bovee says:

          Ash – Settling that balance for 3k is possible. And yes, settling after a judgment is fairly common, but often not until they look at how collectible you would be with a lien, levy or garnishment. I am going to encourage you to call in for a consult: 800-939-8357 ext. 3

  74. Michael
    First let me say what a wonderful thing you are doing answering all these questions. I’ve learned a great deal just reading through the comment threads. On to my problem. I live in cook county (Chicago) where I am being sued by a debt-buyer for 15K+ credit card debt that I stopped paying over 3 years ago. Putting all moral issues aside of paying my debts…honestly I have no desire to settle and have the resources to hire a creditor defense attorney. You have stated in previous threads that chances of successful defense is higher with the debt-buyers. But what happens should I lose? My biggest fear is that upon proving their case they will be able to issue Citation-to-Discover-Assets since I would be formally answering the complaint. As a side note, I completely IGNORED another suit by Capital One and the case was dismissed (Without Prejudice) because they failed to prove I had been properly served. Does simply ignoring them also work? At least in counties (like Cook) with strict “proof of service” procedures?

    • Michael Bovee says:

      Marco – I do not post much here, or on other sites, on any moral angles of debt, other than perhaps to encourage that be one of the last things taken into consideration (as a persons cash flow is going to dictate the rational approach over anything else at the top of considerations).

      Chances of successfully defending a debt buyer collection lawsuit are indeed higher. It is situational though. If you lose your defense you have the time and expense invested in the defense and wind up having the judgment to contend with as well. It is a risk reward calculation you will need to consider. Depending on who the debt buyer and original creditor are, with a 15k balance, the risk can often be worth it.

      Who is the debt buyer, original creditor, and collection attorney involved?

      Being difficult to find and serve has its benefits, to be sure.

      • Michael…Thanks for the quick response!

        Plaintiff(s): RESURGENCE CAPITAL
        Attorney(s): RESURGENCE LEGAL GROUP P

        I have until 7/1 to file an appearance so I’m hoping to find an attorney. Another factor when settling is that one also has to contend with the IRS for the forgiven debt. This is another reason I don’t don’t want to settle.

        • Michael Bovee says:

          Knowing the original credit card issuer or loan grantor helps me to offer additional feedback if experience suggests that lender has a history of providing good account history to the purchaser etc.

          Being taxed on forgiven debt in excess of 600 dollars is not necessarily a gimme. For more on how you may/may not be taxed using sections of the IRS code, read more about technical insolvency. Also know that the potential to be taxed on the entire amount of the debt is a possibility even if you do not settle it. This has come up in the article I posted about a large debt buyer closing up shop more than a year ago. They sold parts of the portfolio off that still had meat on the bones, but also sent the IRS 1099c’s on a bunch of accounts that were basically valueless (past SOL etc). There is really nothing stopping a buyer from doing that, if they cannot or will not sue due to the SOL expiring, or because their suit was beat back and dismissed. More often than not, at least as long as I have been in this space (20 yr), there is “some” kind of value on what becomes virtually noncollectable debt. There are buyers for BK debt, way passed stat debt, etc. There are some pushing for a drop dead timeline on the ability to collect on out of stat debt. I wrote about how New York appears to be pushing that direction with a bill that just came out of assembly a couple weeks ago. When a debt goes zero bid, and there is no market for it whatsoever, tax coffers would benefit.

          Let me know if you would like me to send you some contact info for an experienced collection defense attorney near you and I will email that.

          • Michael
            A referral for Chicago would be much appreciated!

            Thanks again

          • Michael
            It is either Capital One or Citibank but not 100% sure as I never had a card balance that high. I’m guessing they added collection fees to the original amount.

            • Michael Bovee says:

              Marco – I would be surprised if this one is the Capital One account. Capital One is one of the most litigious creditor/collector in Cook County. It can be tough to beat them back when they coordinate their active suits for certain days and fly in a records expert to testify. They had been doing this in Cook County a few years ago. Not sure about that practice today.

              Citibank is one of the more organized creditors providing documentation to buyers purchasing their debt.

              Check your email for the attorney contact info I sent.

              • Michael…it’s CitiBank. So they provide decent info to their credit buyers? I had had quick question regarding SOL. What if the SOL passes DURING a lawsuit?

                • Michael Bovee says:

                  marco – Yes, CitiBank is better at providing documentation. Over the years I have seen 1 to 2 inch thick envelopes of documentation substantiating a debt.

                  The SOL is the date they have to file the lawsuit. If the SOL passes while you are defending the suit it won’t matter. You should really connect with an experienced debt collection defense attorney in your state for clarity on this scenario though.

  75. I was recently sued by a credit card lawyer. My original debt was with Barclays card. The suit is for less than $10000, not sure balance as suit does not give me an amount. I did respond to the suit and from my reading I responded by challenging their standing. I also demanded to see the original signed agreement and a balance on the account from zero to present. I filed my response in the 30 day time. I have not heard anything from them as of yet. It has been close to a month. What should I do next?

    • Michael Bovee says:

      amy – What state do you live in? What is the name of the debt collector attorney you are dealing with? Who is the named plaintiff in the lawsuit if other than Barclay?

      • I live in Arizona. The attorney is Gurstel Chargo from Scottsdale. Security Credit Services LLC is the plaintiff.

        • Michael Bovee says:

          The court process can take some time to play out. Gurstel Chargo will be working with Security Credit Services to substantiate their right to the debt and will be looking to get the back up documentation from Barclay about your account. There are different strategies they may take. There are also reasons the case may not make rapid progress. 30 days is not a huge amount of time to have gone by at this point.

          Your request about charges on the account from inception to today is overboard. It would be an unrealistic expectation and not something the court would likely require them to produce. How comfortable are you with tackling this yourself? Have you consulted with an experienced debt collection defense attorney?

          • I have not consulted with an attorney, can’t really afford to. I am not real comfortable tackling myself but would give it a shot if Ihave to. A lot of what Ihave been reading stated to challenge their standing and ask for the proof. will that work? Also how long do Ihave to wait for them to reply to my answer. Is there a time limit for them to reply? Any advice for my next step would be great.

            • Michael Bovee says:

              You can look to your local court rules for all of the discovery timelines. If things do not progress according to local rules, you have the option to compel them through the courts. Generally speaking, you sometimes start discovery of your own, rather than being on the defense.

              How all this plays out is why it is a good idea to work with an experienced debt collection defense attorney. If you have not consulted with one, you should. You do not have to hire one, but most of this type offer a free initial consult, so take advantage of that. You may end up surprised with the cost to retain your own attorney in this scenario.

              People can and do successfully defend themselves against collection lawsuits. People do lose as well. Will what you did/are doing work? I cannot say. Most of the scenarios of self representation that I see work are when the case gets dismissed due to lack of the ability to produce proof of the debt. And only when the court forces that. Courts can go soft on the collection attorney and allow business books and records exemptions. Dismissals happen during motion and discovery practice. Once in the court room, I do not see as many people win out, but it does happen.

              • I filed my answer on line and recieved a letter today from the lawyer saying as I have not filed an answer they gave me 10 days to reply before a default judgement is entered. If I filed online why are they saying I didn’t? Was I supposed to have it signed by the court? I’m confused.

                • Michael Bovee says:

                  Amy – I cannot know what your local court requirements are for filing your answer, and then serving notice of same on the attorney. There are guidelines for all of that. Check with your court clerk. There is typically a consistent protocol of noticing the plaintiff of anything filed with the court. It sounds like you did not do that.

                  You mentioned you cannot really afford an attorney, but you can at least consult with one for free, and you may even learn that the costs to work with one are affordable. I can email you contact info for one if I knew the name of a larger city near you. If you cannot afford an experienced debt defense attorney, check around for low income legal aid offices nearby. Find out if you qualify for help. Call your local court clerk and ask for resources the court may have about self representation. Some courts run clinics on this topic.

                  It sounds like you now have to respond to a motion for default judgment.

  76. I found out a CC suit is pending against me. PRA is trying to serve me, but I haven’t received anything in the mail yet, and they didn’t leave the documents with my residence. Doesn’t the clock start ticking once I’m officially served? I want to get this over with, but I’m too scared to call them. I was able to look up my case and found the documents via the court. I don’t see any hearing date.

    • Michael Bovee says:

      Elle – You can call the attorney Portfolio Recovery is using and make it convenient for the service. There is nothing scary in that at all. The clock for filing an answer does start once you are served.

      What did you mean by wanting to get this over with?

      • Hi Michael, thank you for responding. I meant I want to get this whole thing over with since I can borrow around half of the debt (1,500), maybe even a little more. Is there a way I can settle this without going to court, or hiring an attorney? I’m struggling since I was out of work for almost a year, and dealing with health issues. Would I be able to negotiate a settlement myself? I want to know all my my options.

        • Michael Bovee says:

          Elle – Yes, you can absolutely negotiate the settlement on your own. How much is Portfolio Recovery Associates suing you for?

          • The total is a little over 1,200.00, and I can borrow around 700-800. The credit card was Old Navy, and turned over to PR. Do I start by calling PR’s attorneys? I’m so nervous, I don’t want to mess up anything. I still have not been served with the summons, too. What do you suggest that I do about that?

          • I looked up my case again on the Superior Court website. PR just filed a declaration of “non-service”. Ugh… now I’m really scared. I have not been avoiding being served, either. Should I call their attorneys ASAP?

            • Oops, I’m sorry, the debt is for a little over 1500, not 1200.

              • Michael Bovee says:

                Elle – I have seen settlements on PRA accounts that are placed with an attorney get done at around half of the balance. If settling is your goal, it may be able to get done for a better savings now, then after you are served and the case progresses. But if that happens, it would be a good idea to connect with your own attorney. One who has debt collection defense experience.

                You will need to start by calling in order to negotiate a settlement. It is unfamiliar territory, so I get that it makes you nervous. Just know that they don’t bite (not over the phone anyway…). Stick to your inability to pay, or to afford any monthly payment. But you have someone able to help you with a small loan and it is xxx amount.

                You would probably feel better talking to your own attorney first, and perhaps even hiring them to take care of all the communication. But with your limited funds available, and what you would be targeting for a settlement, the money would likely be better applied to resolving the debt.

  77. Samantha says:

    I got a letter in the mail today from an attorney wanting to represent me because I’m apparently being sued by capital one. I haven’t recieved a summons, but I know now its only a matter of time…

    I owe them about $2000, and I stopped making payments about a year or so ago due to having a part time job and not being able to afford it. They sent the debt to united recovery systems this past jan for about 3-4 months, and then sent it to another company which only sent me one letter. I do not remember the name of the company, nor can I find the letter anywhere.

    I’ve had this debt for about 4 years, and I just recently got a better job and was working on saving up to pay it off. I have $1100 right now to settle, and I might be able to get more if I absolutely have to.

    I’m not really sure what I should do at this point…I want to get this settled and taken care of, but I don’t know who to contact in order to do this. Is there a way for me to find out? Also, would $1100 be a good offer for a settlement? I’m really scared as to what is going to happen, and I’m even more scared of going to court. Any advice you could offer would be appreciated…

    • Michael Bovee says:

      Samantha – You can check your local court records and pull a copy of the Capital One lawsuit. The attorney CapOne hired will be on that complaint. You will be contacting that attorney to negotiate a settlement pay off.

      I have files that settled with Capital One for 50% after a lawsuit, but it is not all that common. A better expectation would be to expect 60 to 70% if done right. Not to say you should not shoot for the 50-ish percent. Just be prepared and have a resource you can pull from if you need to pay a bit more to get this behind you.

      Edit to add: You can also call Capital One directly and they will give you the contact info for who they sent the account to.

      • Samantha says:

        What should I expect when I call? Are there any specific questions I should ask, or do I call and just state that I’d like to negotiate a settlement?

        • Michael Bovee says:

          Samantha – The basics of negotiating a lower pay off are as simple as:

          1. What happened to cause you to be unable to make regular payments. If that hardship, and new ones persist, state as much.
          2. You do not have enough to pay this debt, but may be able to pull together xxxx amount (offering what is in range of their ability to accept).

          You do not have to get this done in once phone call. You can follow up 3, 5, 7 days later.

          I do not suggest calling and leading with “I would like to negotiate a settlement”. It is going to come off overly direct. It is better to lead with your hardship and that you “may” be able to pull together some money, but know that it will be only xxxx amount. This sets the tone for the call, and any additional ones later.

          As with anything in the courts, it is best to connect with your own experienced attorney.

  78. HI, I was just serve a summon with no court date I went and file an appearance at the court house
    there was 2 names and 2 address so I mailed a copy of the appearance 2 both people. I only owed 3,000 but now my total is 4,700. I only have $500dl do you think they would take that and with a payment plan of $100dl a month?

    • Michael Bovee says:

      lisa – It is possible to negotiate an upfront payment with smaller monthly amounts after that. But you may still end up with the judgment by consent. Post a reply with more details to include who the original creditor was, who owns your debt now if it was sold, the attorney suing. I can offer m ore detailed feedback about resolving the debt with more information.

  79. Hi Michael,
    I have a total of 6 or 7 credit cards that I have not made a payment on since July 2011. They range from as small as $300 up to $21,000 with a grand total of around $49,000. At the time when I stopped paying, I had to choose between paying rent and eating or the credit cards. Obviously I chose rent and food. In the time since my last payment, my debts have been sold at least 3 times and maybe 4 on some of them. I have ignored all of the phone calls and mail attempts thus far. I have finally landed on my feet just a bit but still don’t have enough in savings to pay off these debts. In all of the recent letters I have received, the collectors have stated that they are willing to settle for less. For instance, for the $21,000 debt, they have offered to settle for around $6,000. Obviously that is a lot less but still too much for what I currently have. I guess I am looking for what options I have right now. I have yet to be sued. Should I contact an attorney? Should I wait for my SOL to be up? I don’t want to restart the clock by speaking with the collectors, but I want the stress to go away. Plus, if I do settle with them, it seems like a better idea if I have a lawyer negotiate everything so it is all in writing and legit. Please help! Here are some facts.

    I live in California
    My 2 highest balances are with Citi credit cards around $21,000 and $17,000 respectively.
    I have around $5,000 with Discover
    I have 2 balances with GE Money Bank totaling around $4,000
    I have around $300 on a Dept. Store card
    I have around $1500 on a Dept. Store card
    I currently make too much to file for Chapter 11
    I don’t have any assets except a 12 year old car worth around $1500
    I have my first child on the way.

    Any advice you have will be much appreciated.

    • Michael Bovee says:

      Lee – The citicard settlement offer of 6k for the 21k balance is great. But settlement offers are only as good as your ability to take advantage of them. Depending on who is collecting, there may be the opportunity to spread the 6 payment over time. Who has the debt?

      In fact, before I get into too much feedback, it would be great if you could post a reply to this question first:

      Who is currently collecting on each of the accounts you listed above?

      With this many accounts, you will likely be sued on at least one of them before the SOL expires (just odds). Which ones you are most at risk of that happening can depend on who may have bought your unpaid debts, or which original creditor is more prone too it, even after all this time.

      If you do not have the money to take advantage of the really good settlement on the table now, you cannot afford to have an attorney do the negotiation for you. But you do not need to. You can do just as good a job locking in the settlements and getting them documented as I, or any other professional could. But before you go there, lets prioritize your debts based on who is collecting them.

      Please also post how much cash you have on hand right now to use to pay toward any settlements. Also include any ability to save money from income each month, or any additional “what if” types of money sources (loan from family member, friend).

    • Michael Bovee says:

      Also, anyone posting to the site comments for the first time has their first comment flagged for moderation. Any follow up comments you post will go through automatically if you use the same valid email each time. Just want to point that out because I found your follow up comments after the one I just posted a reply to.

  80. I have about $200,000 in credit card debt. One card, the largest, is currently at $93,000 and none have been paid in over two years (almost three). I am self employed and business hass not been good. These debts were racked uo trying to keep the business afloat. It is starting to improve, but I have been surviving on SBA lines of credit and those are almost depleted. I just recieved a letter that the firm who holds the debt, (Asset Acceptance which is a debt buyer) has just referred my case to a lawfirm for collections. The lawfirm has not yet sued me, they have only sent a letter stating that they are now represemnting Asset Acceptance. If they sue, and get a judgement, I will have to file for bankruptcy. I also have over $100,000 in debt to the IRS which is not dischargable. What is the likelihood that they will actually sue. My only asset is a house valued at $320,000 and I have a $255,000 mortgage on it and $20,000 in tax leins.

    • Michael Bovee says:

      Scott – Have you looked into your eligibility in qualifying for chapter 7 discharge as opposed to chapter 13? What did you learn? If chapter 7 is not an option, and with the IRS debt and tax liens being treated as priority creditors, coming up with a plan to deal with Asset Acceptance will require some level of cash – either from monthly discretionary, or some other source. Lets assume for a moment you could settle with Asset Acceptance for a fairly dramatic savings – can you raise a lump sum quickly?

      Who was the original creditor on the account that Asset now has? What is the name of the firm they placed the account with?

      • I do qualify for chapter 7 bankruptcy. I can raise enough cash by making installments to settle this debt but the debt forgiveness ramifications make it impossible to settle because I will get bombarded with tax debt to the IRS as a result. I have resisted filing for bankruptcy until a firm litigates the matter and gets a judgement. I will file chapter 7 at that time and have no tax on debt forgiveness but until litigation begins, there is no real reason to file bankruptcy. The original creditor was Bank of America.

        • Michael Bovee says:

          Scott – I hear you on waiting for a trigger event to file chapter 7. Given the information I have to go on, I see that trigger event as a foregone conclusion. Getting the filing out of the way now would mean you have a head start on rebuilding your credit and meeting the different underwriting timelines I cover in debt relief and your access to credit. Something to think about anyway.

  81. I live in Texas. I was just served a citation for a law suit for $11,600 by attorneys of Portfolio Recovery Associates assignee for Chase Bank for credit card debt from 2009 when I found myself out of work. My last payment on the account was at the end of May, 2010. All of my resources have been used up long ago including savings and retirement. I had to borrow from friends and family to survive and support my family while looking for stable employment and then working to catch up. It has been a long and painful road. I am just getting back on my feet having saved my mortgage from default, paid off my wife’s car, saved my car from being repossessed and getting that load caught up and almost paid off, paid off several small credit cards that had defaulted, paid back the people in my life that loaned me thousands of dollars. I am not out of the woods yet, but I have just settled into a stable but very tight budget with no room for anything else, no savings, living paycheck to paycheck.

    Is it worth attempting to defend against this suit or should I attempt to settle? I have no cash on hand with which to pay but I could, painfully, re-arrange a few things to come up with $4K to $5K over two or three months (August or September), but I have no idea if that sounds reasonable since I do not have the cash now or all at once.

    Any advice is greatly appreciated.

    -W

    • Michael Bovee says:

      W – Sounds like you have gutted through all the challenges pretty well. Is this old Chase credit card the last debt you have from back then? If there are other higher balance credit cards with debt collectors out there, my feedback will change a bit.

      Settling now that Portfolio Recovery has sued will likely be at a bit of a premium than if settling prior to this landing in the court. You will be dealing with the attorney, and not PRA directly. In situations like this, filing an answer to the lawsuit and raising solid defenses, will buy you the couple months time you mentioned needing to raise the cash to settle, and often creates a more pliable negotiation and saving percentage.

      I recommend you connect with an experienced debt defense attorney for help with the early stage court filings. Consulting with one is usually free. You may even learn some additional reasons to fight off the suit. If you would like for me to send you some contact info for the type of attorney you should speak with, post a reply with the name of the largest city near you. Also include what additional debts may be hanging out there, and who may be collecting on them (if you know).

      • Hi Michael,

        Thanks for the reply. I have at least one other old Chase credit card in default from around that same time for a lesser amount ($5-$6K-ish) and I don’t know much else about that one. The one I’m being sued for is the largest amount. I believe the balance was around $8 but I’m guessing interest and fees have brought it up to the $11.6K amount. I reside in the Austin, TX area. Please do send the contact info if you have any in my area. Your help is much appreciated! Thank you. -W

        • Michael Bovee says:

          W – Check your email for the attorney info in Austin.

          Assuming the other Chase credit card is 6k, and has likely been sold by now. After you knock down the most pressing issue, circling back to resolve that one for say 2500.00 will eliminate the debts from back then. It also suggests bankruptcy is not a great alternative given the dollar amounts you are looking at.

          It would be great if you posted an update to this comment string as things move along.

  82. I have a summary judgement against me from Resurgence Financial (they bought by debt from Citicards). I have been paying on it for 6 years (amount was $8200). Resurgence was represented by Hull & Associates (they recently merged with Couch, Conville, and Blitt). I called to request a balance letter. They stated that my balance was app $1600. Early this year while they were still just Hull I had been verbally told that the balance was over $3200. I called this week to try and make arrangements for paying the $1600, which the letter stated I owed. They called me back today stating that the balance is incorect and is actually $3300. Can they do this? Or can I hold them to the $1600?

    • Michael Bovee says:

      SC – They can collect on the judgment amount and any interest that has accumulated. Getting them to provide an accurate accounting of all payments and judgment interest applied can test your patience. Pull up the court judgment and compare the judgment amount, with the interest allowed, and calculate your payments to date. What is the balance you come up with? Also, have your payments been made through the court, or direct to the law firm?

  83. Shantel Johnson says:

    I am in the state of Texas and I am being sued by a creditor for the amount of $7500. The statue of limitations in Texas is 4 years. I orginally opened the account in 2007 and the first payment was not due until 2009. Due to being laid off at work I was not able to make payments. I never made a payment on the account. Should I write a letter to the court or the creditor informing them that the statue of limitation has expired?

  84. Hi Michael,

    I just received a civil action hearing notice filed against me by GE Capital Retail Bank for the amount of $5,308.36. This credit card was opened in July of 2011 and closed in either August or September of 2012 (I can’t remember the specific date and they didn’t send a cancel confirmation). I continued to pay each month until January of this year. I sent a payment on the 7th and four days later the amount was back in my account and it stated that the payment had been rejected. After that, I will admit that I made no further attempts to make any more payments. The last time that I received an email or statement regarding this account was in December of 2012. Now all of a sudden I get this notice in the mail that I’m being sued. Do you have any advice on how to handle this? I’m speaking to a lawyer today, but I’ll take any advice that I can get at this point.

    Thank you!

    • Michael Bovee says:

      Aly – Who sent the notice you got in the mail (name of debt collection agency or debt collector attorney)? What state do you live in? What is your current ability to pay this account? Can you come up with say 50% of the balance to settle it? If only bale to make monthly payments, what amount are you confident you can budget for each month?

      • Hey Michael,

        Thanks for getting back to me. I’m from Pennsylvania and the attorney that sent the notice was Gregg Morris of Patenaude & Felix APC. I just came back from speaking with my now attorney and we were going to try to work out a payment plan, but Mr. Morris is apparently on vacation until next week. I was also thinking about considering offering a lump sum of $3,500. Do you think that’s worth a shot or should I stick to trying to negotiate a payment plan? The most that I would be able to offer up monthly would be $100 since I’m still a student and only working part time at the moment.

        • Michael Bovee says:

          Aly – 3500.00 lump sum settlement on the balance you are being sued for is often going to be more attractive to the collector/creditor than low monthly payments (100 in this case). In some instances, your attorney may have to file an answer to the complaint to get them to be more pliable on the settlement amount (not always).

  85. Hi Michael,

    Thanks for a great site. I was served papers back in in 2012 by CIR Law offices who are representing FIA Card services. My balance owed was $46,108. I did answer the summons. CIR and I agreed on a payment arrangement for about about half the amount of 27,665. I paid down the balance to 7146. However, I am late for May’s 2013 payment due to other debt. Coincidently, in May my FIA account was transferred to another attorney, Rory W Clark. I called their office to see if I can make lower monthly payments for the remainder of the7146 balance. They called back and stated that since I am late for my May payment the original payment arrangement is void. Now my balance is back up to 31,421. Can you advise or recommend anything at all that I can say or do to get back my original balance?

    LK

    • Michael Bovee says:

      LK – When you made the agreement did you sign off on a stipulation or consent to judgment?

      • Thanks so much. I appreciate your reply Michael!

        I signed a stipulation.

        • Michael Bovee says:

          LK – The stipulation will have outlined, as most do, that any missed or delinquent payment can result in losing the agreement, and unfortunately the discount. There are times where you can use the “fall on my sword – apologetic” approach to getting back on track with the payments and the original deal, but not always. Debt collectors are all about the money, and light on the heart. Given the amounts at stake, even if you have to renegotiate, it will be worth the effort.

          If you hit a brick wall in your efforts, update this comment string and lets go from there.

          • Thank you Michael.

            Yes, they said they would work with me by just lowering my monthly payments. But the increased Principal Balance still stands. So does that mean they will garnish my bank if I miss payments from now on?

            Thanks in advance for your reply Michael. I truly appreciate what you do for everyone!

            LK

            • Michael Bovee says:

              LK – Given the nature of debt collection, and the things I have seen over the years, you cannot and should not, trust that they will not try to enforce further collection on the stipulation that was not met through a bank levy or garnishment. You should get everything in writing.

              If you have any way right now, or down the road, to raise a substantial enough amount of money to offer a lump sum settlement, they can and do happen in your scenario. I have circled back and settled stipulations and judgments often enough. It is appealing to them for two reason:

              1. Real time value of money.
              2. People can discharge debts like this in chapter 7 bankruptcy if the situation deteriorates – and they get nothing.

              Thanks for leaving comments for others too. That is what I would like to see the site grow into as much as possible.

  86. Hi, I hope all is well. This is by far the best information I’ve seen thus far online. I am in desperate need of your help. I am scheduled to pay The Law Office of Michael J Scott tomorrow (6/14). They purchased that account from a debit collector (Calvary SPV 2). The default judgement is in place and I so not have an attorney. The lowest they will go is 3300 (from a total amount of 4100). The account is old and was charged off at least 4 years ago. I’ve been told it would cost me close to the aforementioned amount to hire an attorney. I certainly want to be done with this but I also don’t want to throw money at them (that I could use for other debts). I’m employed above the “poverty level.” Should I hold off on paying that amount and try to getter a lower price or is that a reasonable settlement amount? Not sure if what I’ve been told about attorneys fees is true considering all the different information I keep finding. Please advise as soon as possible. Thanks so much in advance and keep up the excellent work.

    • Michael Bovee says:

      Amber – The best way to find out an estimate of what it would cost to get assistance from an experienced debt defense attorney is to consult with one (or more). While there is certainly an expense to retain your own attorney, what is your goal in the effort? If it is simply to settle an existing judgment, assuming an attorney negotiates a better deal, the fees for that could bring the total to the same amount you have on the table to settle today. If you want to work with an attorney of your own to somehow get the judgment set aside and defend against the collection action from there, that is different, and strangely enough, may cost less in the long run if the lawsuit is dismissed.

      How long ago was the default judgment entered?
      What is the name of a larger near by city?

  87. I have a judgment against me from a creditor.
    They have sent me a Final Summary Judgment and fact information sheet that says it needs to be filled out within 45 days of the judgment. It requests a lot of personal information about my wife. Stuff like SS#, employer, pay rate children’s name etc.
    Do I need to provide this since it is not her debt?

    • Michael Bovee says:

      John – That information sheet is designed to identify anything that will be helpful in order for them to collect. Were you a participant in the court process (filed an answer to the summons etc)? Do you have any means to pay on the judgment, or settle?

      Ideally, you are going to want to talk with an attorney about your obligation to complete that document. I would suggest connecting with one who has experience defending debt collection lawsuits.

  88. Hi! How are you?

    Quick questions…. I just attended mediation for a credit suit brought on by LVNV who purchased the debt for a Sears credit card. I don’t recall EVER having a Sears credit account. I did have an attorney present and the attorney for LVNV agreed to a mutual dismissal of suit and counter claims. Thank God! I still have to go on Monday to my attorney’s (whom skated out immediately after to another case) office, to sign a letter of fraud. Not really sure what that is or what it entails. What is it? Just really curious… Monday seems so far away to get an understanding. Now, that this was dismissed, can I pursue to have these entries (as well as those of Sears) taken off my credit report?

    Also, because this was mutually dismissed, I’m believing that I shouldn’t have any future actions concerning this case? Are my beliefs correct? Or can they still pursue this later or sell this debt? Can Sears now come and say I do owe them?

    I’m also a veteran! I was told to immediately print down my credit report because the attorney believes I may have been a victim of identity theft. What can be done after printing it, if I have other accounts of unknown debt? Don’t get me wrong, I have had two or three credit cards in the past. One of which I closed on my own (paid as agreed), a loan I repaid as agreed, a military credit card (which was paid upon separation of service), a car loan (that was paid off during a total loss accident).

    Come to find out, I have had a few debt buyers attempt to collect by filing suit against me in GA State Court. The cases were dismissed without prejudice, by the Judge. What does this mean? What course of action can I take to eliminate this?

    Thanks for your help! Look forward to hearing back soon.

    • Michael Bovee says:

      CD – Sears will not own the account anymore, as LVNV is a debt buyer suing on their own behalf. LVNV will not be pursuing collection at this point. I think it is unlikely for the debt to purposely be resold again, but stuff happens, and it could be.

      The cases dismissed without prejudice just means that an action can be refiled at a later date.

      From what you have shared, there is a high likelihood you are a victim of identity theft. You will want to pull down your report and see what kind of damage has occurred from that, and also file disputes with the credit reporting agencies and flag your account for identity theft. It sounds like you have a good attorney who has a grasp on all of this and will be able to give you more help beyond defending the lawsuit.

      • Ok! Thanks, Micheal! He is a great attorney. He did exactly what he said he would and didnt charge me an arm or leg. You aren’t too shabby yourself. I appreciate what you’re doing here. This is “Top Class”!

  89. Hi Michael,

    I have a dilemma for you that I hope you can shed some light on. I agreed to charge $4,500.00 on a credit card to pay for a tooth implant. Unfortunately, I lost my job and now cannot afford to make payments anymore. When I explained my situation to my dentist and asked if he could cancel the remainder of the operation and charge only for the work completed on my tooth he said no. The only thing he could afford me is to lower the monthly payments, add interest, and provide me with five years to pay off the debt.

    I do not want to continue the tooth implant operation. What are my options?

    • Michael Bovee says:

      Chris – One option may be to dispute the charge directly with your credit card bank. When was the charge made?

    • Chris, you can just pay for the work that was done. Don’t feel obligated to pay for something that was not yet done.

      LK

  90. Hi, I was just served papers being sued by Cach, LLC as assignee of Bank of America through a Lazega & Johanson LLC in Atlanta for a credit card debt of $1600. I am a recent college graduate and am unemployeed. I’ve got 20 more days until it’s been 30 days since I was served, but I don’t know what to do. I haven’t been with BOA since 2007, and haven’t used the credit card since then either. SO this debt is extremely old. What should I do since I don’t have income to pay for any sort of settlement?

    • Michael Bovee says:

      Kat – The debt may be outside of the statute of limitations to legitimately sue you for it. But you would have to challenge the suit – file an answer and defend against it – on those grounds. I would urge you to check around locally for low income legal aid offices that could help. You can also consult with an experienced debt collection defense attorney. This type of attorney charges a fee to help you, but if the SOL has expired, it may be something affordable due to the nature of the work they would perform.

      You need help filing an answer to get to the bottom of the SOL issue, not money to settle, based on what you have shared so far.

  91. Hi Michael,

    Last week I was served with papers stating that I am being sued by Stellar Recovery, assignee of HSBC Bank. My original debt, which I agree to, is with David’s Bridal/HSBC for a total of $2069. I opened a credit card with DB in 2009. With a new baby, my college expenses, pay cuts, and other debt, we fell behind on payments. In 2010, the debt was sold to Stellar Recovery. In 2011, I made one $100 payment to Stellar (I can prove this with bank statements), but I never received anything reflecting that payment or the new balance from Stellar. They are suing me for $2090. With the summons papers, I received an account summary from David’s Bridal from Dec. 2010 as well as several papers showing that HSBC sold a group of accounts to Stellar in Nov. 2010. There is nothing on those sales paper specifically mentioning my account (not even a dollar amount that would match). I have several questions which I would greatly appreciate help with.

    1. How do I answer? Do I admit to the Davids Bridal debt? Do I deny that owe the plaintiff? Are the papers they have given me enough to prove they own my account?

    2. Do I need to contact the plaintiff’s lawyer(s)? Should I request more proof that Stellar owns the account? If so, would I do this after I file my answer?

    3. Do I need a lawyer? I am honestly scared to face the plaintiff’s lawyers and court on my own, but I am not sure it would be worth me spending the money on a lawyer. I am also not sure my case would be worth a lawyer accepting since the amount is relatively low.

    4. If I deny the debt to the plaintiff in my answer, will I still be able to negotiate a payment plan in mediation or court? Is there still a chance they could garnish my wages? I cannot settle for a large sum. Our budget will allow for another $100 payment. Is that a reasonable negotiation?

    Thank you so much for your time.

    MC

    • Michael Bovee says:

      MC – My answers to your questions in order:

      1. I cannot offer you legal advice about how to answer the complaint. Generally speaking with what you have shared, if you admit the debt, there is really not much else to discuss other than how you are going to pay it. If you deny the debt is valid, you preserve your right to defend against the claims.

      2. You made a payment to Stellar Recovery in 2011 already. It could be assumed you agreed to the debt and ownership at that time, but there are ways to defend against the collection lawsuit and request more proof. An experienced debt collection defense attorney would be able to advise you on this.

      3. Yes, I would highly recommend you at least consult with an experienced attorney. You may not end up retaining one, but you would likely have a better grasp of the situation and feel less stress about the direction you take afterward.

      4. Defending a collection lawsuit brought by a debt buyer can often lead to a better settlement, but not always. You have already paid Stellar Recovery once, so that may complicate your approach. But if all you can afford is 100 dollars we are not talking about a settlement, as that amount will be declined. But 100 a month may be something you can set up as a monthly payment amount. If they don’t go for it now, they may agree to it through court mediation. They will not be able to garnish your wages without a judgment, so there is a ways to go before they can do that, and you have options to avoid it.

      • Thank you very much for your reply and advice. I will try to set up a consultation with an attorney. Thanks, again.

  92. Kristen says:

    Hi Michael,
    I was just served papers last night in CA for a debt of $6500 from Citibank. The CC was opened in 2007 per the summons and the last payment was made roughly in 2009, again per the summons. I can’t remember for the life of me when I opened the card. Needless to say, I didn’t pay the bill because of divorce, loss of job, etc. Now I would like to get everything squared away… I called the law offices that are now handling the debt Unifund CCR and have asked about a payment plan, which they agreed too. I made this phone call last week and was served last night. They were supposed to be emailing me paperwork to set up the payment plan but I have yet to receive them. I called them again today and asked about the payment plan paperwork and the associate noted that I had indeed spoken with someone last week and that he would email the paperwork again. My question to you: I asked him about the summons I received and what I needed to do with it if anything and he said not to worry about it and that because of the payment plan that will be set up I can disregard the summons. Is this correct? Or are they just trying to have a judgment made in the case?? I’m confused… And I have yet to receive the email containing the payment plan set up… Any advice would be very helpful. Thanks so much.

    • Michael Bovee says:

      Kristen – You absolutely need to take anything coming from Unifund, or a debt collector working for them (the law office in this case), with a grain of salt. Experience suggests they are going to pursue the judgment in the court. The paperwork you get from them about a payment plan may actually be a stipulation or consent to judgment.

      Before you go any further I would encourage you to contact an experienced debt defense attorney in California. I can email you contact info for one who is familiar with Unifund and the attorneys they use. The consult is free. Let me know in a comment reply that you want that info, and I will email it to you.

      • Thanks Michael.
        Yes, I would really appreciate the contact information for the debt defense attorney.

        Unifund just sent me a stipulation that includes the amount owed + interest + attorney fees… So now the amount owed per the stipulation is $10K. I’m confused…. Hopefully your contact info will help clear up the confusion.

        Thank you!!

        • Michael Bovee says:

          Check your email for the info I just sent. You will get the clarity you need with what is happening through that consult.

  93. Hi, Michael!

    I live in Chicago, IL. I owe $1300 to Target. My last payment was 06/2012.
    Target (I think) sold the debt to TD BANK USA NA.
    TD BANK USA NA filed a collection lawsuit against me on 06/13/13. (court #2013-xx-xxxx)
    Attorneys: Meyer & Njus P.A

    My questions:
    1* If I want to settle this debt, Do I need to call Target and see if They sold the account to TD BANK USA NA?
    2* If I want to settle this debt, Do I really need to pay the $1316? or Can I pay the 40%?
    3* If I pay the 40%, Can this affect me in the future if I want to re-apply with Target Card?

    • Michael Bovee says:

      1. Target did sell to TD Bank Group. The deal was announced last fall and closed a couple months back.
      2. It is not all that common to settle debt that is being collected through the courts for 40%. Was there something that has led you to target 40% as settlement with TD Bank?
      3. Banks and retailers use different policies for how they handle approval for, or offering credit to, a previous account holder. Those policies can change. It stands to reason that you increase the likelihood of later approval if you pay the debt off in full. American Express works that way. But Bank of America offers credit cards to those who have settled for less in the past.

      • Thanks for your reply, Michael!

        2* No, I just thought about that. I knew about this court sue for a letter hat I got 2 days ago from a lawyer saying that He can help me with this. So, I look for more information to see if was true.

        I have 3 more questions:

        1* If I’m being sued, can still negotiate the amount of the debt, Right?
        2* If I pay less than $1316, let say, I settle the debt for $700… Do I need to report this to IRS and pay taxes?
        3* Can really a creditor freeze your bank account, etc… ?

        • Michael Bovee says:

          1. Yes. A realistic target for the situation you described would be 70% of what you are being sued for.

          2. If 600 dollars or more is forgiven, there may be tax implications. In your example above you would save 616.00. That could trigger the 1099c being issued by the creditor come January 2014. Even though a savings over 600 dollars can be reported as income, it does not mean you will owe the tax. See this report for more details.

          3. If you are sued, and that later results in a judgment entered in the court, yes, bank accounts can be levied in order to collect on the judgment.

  94. hi. thanks for all the great advice on this site. i was reccently issued a notice of levy from the wynn law group in california. they are representing discover bank. with fees etc i owe $9800. I am currently unemployed, lease a car in my dads name, rent an apartment and have no other assets or income. i dont know exactly when this credit card was closed but it was probably 4-5 years ago, at least. I have a very small income at the moment while I look for a job but I get paid cash. just enough to cover my expenses but by no means enough to settle this debt or set up a payment plan. Do i write a letter to the lawyers stating that i do not have the means to pay and am therefore exempt from any bank levy? what else can i do to fight this or settle it? any advice will be greatly appreciated. thanks.

    • Michael Bovee says:

      mike – You are generally not exempt from a bank account levy that is used to enforce payment on a judgment unless the funds deposited in your bank account are all from an exempt source (Social security is a good example of an exempt source). Settling this requires money to offer. What amount can you pull together? Fighting the levy would mean challenging the judgment, so part of the court process. Is there anything about the debt, or your being sued, that you think is/was handled poorly?

      • i really have no money to offer them. thats the problem. I have about $200 in my checking account and not much more coming in. Im going to call the law firm tomorrow and see what i can do. maybe set up some sort of payment plan to keep them from putting the levy on my account.

  95. Hello, I have a real problem I think. I defaulted on 4 or 5 credit cards all at the same time back in 2010, due to extreme hardship. They all eventually went to collection, and I received a few letters over the years saying some had gone to a different collection agency. I paid a little bit of money towards a couple of them last year that I was getting letters from, $50 to one and $50 to another, I thought that might keep them happy. I’ve gotten threatening phone calls, and rude people on the phone, all a ploy to get me to pay this debt that I can’t afford. Then I got a pink notice that said small claim complaint from asset collection, one of the creditors that had been being nasty in some of there phone calls. I didn’t think much of the notice I thought it was just another scare tactic. I set it aside with hopes to be able to pay something towards it, although I am still in a hardship with money, and health issues. I was looking threw my desk and came across the notice today and decided to do some research on this funny looking form. Come to find out it appears to be an actual form from the local court system, and I was supposed to have replied to it by 5/28/13, and it is now 6/21/13. It was already after 5pm when I discovered this so I haven’t been able to contact anyone about it. On one of the pages it says to contact the court at the phone number noted at the top of the complaint with any questions, but there is no phone number. I had to google the address just to find a number. So am I totally screwed because I missed this date, the amount they are requesting is $1997.08. I’m sure this had gone threw a couple other agencies before asset acceptance got it. Its in the office of Beliveau, Fradette and Gallant PA in Manchester, NH>

    • Michael Bovee says:

      Amanda – Contact the court and find out how the case has progressed at this point. You may still be able to engage in the court process with some excusable neglect angle. But first, what is your goal with this account? Are you looking to resolve it, or fight it?

  96. hi ,ON FRIDAY A MAN CAME UP TO the driveway and i came up to see who he was and showed a badge and had paperwork in his hands and asked for my name, I didn’t know what to do,I was terrified…..I said we just moved here. but then he comes back and nocks at the door and my husband answers and the man says the vehicle our there is registered to her name and left a bussiness card . I don’t know what to do…..I am sure it is with chase bank because i had just recieved letters coming in the mail saying i was going to be sued for chase credit card… i was to scared and didn;t know how to respond because i was laid off 2 1/2 years ago because i have been ill, from my job. i can’t even raise money for my deductible to get a mamogram. and further testing. i have no money, i have on foodstamps and medicaid for the kids …i have no money to seek legal help, i can try to sell stuff on craigslist but honestly we don’t have much and have been going to food pantries… but i am scared they will try to take my vehicle. this is the only way i am able to search for work or get to and from the doctors with kids etc. i was looking for those letters that said i was going to be sued and i found one from march that said creditor TROY CAPITAL LLC Assignee of CHASE BANK USA, N.A.
    Balance $3256.91.
    I also found another letter from this month that stated
    Texas Resolution Group,LLC
    CIVIL SUIT ,COUNTY HARRIS JP 1-1 TROY CAPITAL Vs my name
    I AM SCARED I WILL BE ARRESTED BECAUSE I CANNOT MAKE PAYMENT ARRANGEMENTS WITH OUT A JOB ,how will I make payments ,I’m scared that my tahoe will be taken away….. leaving me in worst state. I’m afraid because the original amount was around $1500. i didn’t even have a limit passed 2.000 and now its $3,256. and they probably added court fees. i have no way out. i have no means of paying, i am scared because i need money for testing for my health. i don’t know if i should call and go to court ,i have 4 small kids what do i do.

    • Michael Bovee says:

      linda – With insurmountable debts, and judgments that can lead to collection enforcement, it may be time to consider your options with a chapter 7 bankruptcy. Depending on the value of the vehicle, you will be able to keep it, along with other exempt items. I would encourage you to contact a low income legal aid office near you and discuss your options and their assistance. Based on your receiving other forms of public assistance, you should qualify for free legal help, which could include assistance with the BK process.

      • can you explain the bk process, i have been trying to sell our tv etc. but no luck, how much do u think that i would have to pay to make a deal to try my best to sell something, do you think that they would give me some time to try to make the money by selling what little i owe. I’m afraid to call them, what can I do. i don’t know where to find any low income legal aid

        • Michael Bovee says:

          linda – Chapter 7 bankruptcy will allow you to discharge your unsecured debts, including any debts you have been sued for collection. The benefits and drawbacks to the BK process will vary from one state to the next, and certainly be applied to each person differently. You really need to connect with a bankruptcy attorney and discuss how the BK process will be applied to you. Do that before calling any of the debt collectors.

          Using your search browser type in low income legal aid office in (type in name of your city, or try county). You should get a result you are looking for with that.

  97. Michael,
    I am being sued by Main Street Acquisition Corp for $972.35 plus court costs. I definitely do not want a judgment against me and would like to get this paid off. I just received the summons today and would like to get this cleaned up as soon as tomorrow. I could afford $400 maybe $500 right now to settle this, would that be acceptable? Is there still a chance to settle before going to court? If so, do I contact the law firm or the company? I have paid 2 credit cards off in the past 3 years and have this one and a dept store to still pay off. This is a small claims complaint. Not sure if there’s anything else you need. Any advice would be greatly appreciated!
    Thank you

    • Oh, the lending credit company is Credit One Bank.

      • Michael Bovee says:

        Sarah – Lower dollar collection accounts that reach the courts do not typically settle for less than 50%. It can and does happen, but they are thinking (and their internal data likely supports the reasoning), most people can drum up another 1 to 2 hundred dollars.

        You absolutely can settle before court, and perhaps for what you have available, but realistically you may need to be prepared for the settlement to be a higher amount. Your negotiations will be with the law firm, not Main Street Acquisitions.

        • Michael, thank you for the reply. I did call the law office today, I would like this processed as soon as possible. They did say they could cut the court costs, which would amount to roughly $1400, down to $992. I told them I would be able to make 2 separate payments, one this month and one next. They agreed but said I would still need to go to court. Would there still be a possibility of getting a judgment put against me? If so, I’d hate to go completely broke for the next 6wks to still have that done. The person I talked to also stated he needed to do a financial report on me, this entailed a lot of personal information. I was not comfortable with handing that over. Is that common to need that info?

  98. Hello Michael
    I have read many responses you have offered….I too, am being sued by Capital One via a collection attorney in Michigan. I sent a letter to the Judge and attorney asking for statements since the account was opened, in 1997. My last payment was in 2011. I now have received a Pretrial Notice, and am unsure how to answer the questions. Can you help? Thank you in advance.

    • Michael Bovee says:

      Linda – I do have some feedback to offer, but have a couple of questions to ask you first. Post your answers in a comment reply and let’s go from there.

      1. Why have you asked for accounts statements going back to 1997?
      2. What is your goal with this account?
      3. What is the balance you are being sued for?

  99. Hello,
    I recently was summoned by a lawyer firm (The Moore Law Group) in the month of May 2013 and the court papers state I have 30 days to respond. I don’t know what to do. I was told that any papers mail to the court must be review by a lawyer but not having the kind of money to hire one I’m all lost. I believe is being 3 days past the 30 day deadline. I went ahead and submitted an APP-102 form that was found in the papers I was summoned (www.courtinfo.ca.gov/selfhelp). (I going to mail another copy of this application certified mail tomorrow just in case). Here is the issue: I end up running my cc for up to $10K but agree with a collection agency (United Recovery Systems) to make monthly payments (currently owe about $8K). Just recently the collection agency stopped withdrawing money and I called them. They said to contact Capital One-MC so I did. Capitol One told me they did not have my file and to contact the law firm. I called and left message(s) which I never received a call back. Now, I get served with court papers. I called the law firm today and spoke with someone and said they can negotiate a monthly plan for up to 36 months or I can make 3 lump sum payments. (The lump sum given was $5180). I asked if this amount can be negotiated and was told that Capitol One has already reduced the amount and that is the bottom number. Is there a possibility I may be able to negotiate and have this number be reduced? (I already have a friend who is willing to lend me the money but its not $5k is only $4K). If I go to court I may end up paying all the money I owe plus court/lawyer fees and so on…correct? Any advice is much appreciated. Thank you so much. SC

    • Michael Bovee says:

      SC – You may have a shot at settling for the 4k in one lump sum, but it is not a good one. If at all possible you should look to tap other resources in order to meet the offer on the table (or maybe try to negotiate a few more hundred off). The offer on the table is close to the realistic expectation I would set if I were negotiating the debt for you.

      Like you pointed out, the alternative is going to court and potentially getting a judgment against you for a much higher amount and the risks of garnishment and levy for collecting that could come later.

  100. I was served here in California Saturday at my home. The summons was handed to my 28 year old son who was visiting while I was not home. I am scared to death. The credit card was Capital One in the amount of $3670. Last payment made was November 2012. It says, it is a limited civil case, type of remedies is monetary, it says it was filed June 18 2013 , stamped “filed by fax” , it says I’m being sued by the plaintiff “Capital One” but also lower on same page says ,” the name, address, and telephone number of plaintiff’s attorney is” …. Then states the information. I am afraid come Monday morning my bank account will be frozen or at some point this week and my husbands paycheck is direct deposit and like most we only live paycheck to paycheck. What happened to not pay this debt that is only in my name and I am solely responsible for is August of 2011 my Doctor took my off work for stress and Bi Polar and high Anxiety. I was put on medical state disability of a year until that money ran out. I tried continuing paying the credit card but have been unable to work. I have been suicidal for over two years. November 2012 was the last time I was able to make a payment. Are they going to freeze our bank account? Who do I contact here in California as far as an attorney ? What kind of attorney ? How do I know they are a legit attorney? What do I do? PLEASE answer me ASAP I’m scared to death! Thank you

    • Michael Bovee says:

      Debra – Being served a lawsuit is the first step to legal collections. You cannot have your bank account levied, or wages garnished, unless the Capital One lawsuit progresses through the legal process to the point where the court enters a judgment against you. So, you have time to consider your options, and also time to consult with the right type of attorney. You do want to speak with an attorney experienced with debt collection defense. I sent you an email with contact information for one. He is highly credible.

  101. Hello Mr. Michael Bovee
    I just posted a question abou an hour ago, came back hoping to see some great advise from you that I have seen in other posts above. But my entire post is now gone. I do see you have responded to another post by another person after I posted mine. Did I do something wrong? I’m at a loss right now due to it being a weekend and would like some help?

    • Michael Bovee says:

      Debra – I understand the stress you are under. You do have time to research your options for how to handle the situation. You were just served this weekend, so if you were to file an answer to defend the suit, or even just to buy time to resolve the Capital One debt in some other way, you have a few weeks before any deadline. Do not take that to mean you should not get really proactive with looking at all options. But I do hope the reply, and the attorney contact info I sent you, helps you to take this a little bit more in stride.

    • Michael Bovee says:

      I should add that all first time comment posters have that first post stuck in moderation. After one post is approved, all subsequent posts automatically post when you submit them, as long as you use the same email address. Any comment that has a link in it will automatically get set aside for manual approval. The site is set up this way due to the astonishing amount of comment spam we get.

  102. 63, low income receiving social security retirement (417 a month).

    Lost my job 3.5 years ago, had unemployment till I retired. Had like 4 credit cards I stopped paying on Feb. 3.5 years ago. I do have several medical issues, cant even afford to by my diabetic pills and asthma meds. Hope to get on the helping drugs plan soon.

    I had 2 cards from the original bank, i dont have a clue which this was for, I tried to find the letter they mailed, but cannot. Oh i also have Alzheimer.

    I cannot pay this, nor can I pay an attorney, yet look at all the fees they want for this? Its killing me.

    Hope you can reply soon, thanks very much.

    Received summons today, she left it on my truck, can i just say it blew away? Bradleyj knell (isb#8100, Sean Beck isb 7992, and in bold print Johnson Mark LLC no isb number.

    Plaintiff Portfolio Recovery Associates, LLC.

    2. “… account no. xxxxxxx##, which contract was subsequently assigned to Plaintiff.
    3. Defendant has defaulted on the obligation under the contract.
    4. The amount due and owing to the plaintiff is 775.32. In addition , Plaintiff is entitled to recover interest from the date of judgement at the legal rate.
    5. written demand for payment of said sums was made upon defendant more than ten (10) days before commencement of this action.
    6. Further, equity requires defendant to pay the value of the benefits received.

    Prayer for relief:

    A. damages in 775.32 less any payments made:
    b. for post judgment interest at the legal rate until the date all amounts due are paid;
    c. for costs of court both pre-judgment and post-judgment; and
    d. any other relief as the court deems just and equitable

    dated may 21.2013

    • Michael Bovee says:

      Rayna – From what you have shared, you may be judgment proof. That would mean there is not much PRA can do to collect from you, even if they get a judgment. Do you own real estate? If so, is there equity?

      You would likely qualify for low income legal aid assistance. If you cannot conceivably settle this, it would be a good idea to locate the nearest low income legal aid office and see what type of advice you get about how to proceed from here.

  103. My husband received a letter from an debt attorney stating he has 30 days to make arrangements on a $800 credit card or will be sued. The problem is that my husband was in a catastrophic accident at work a year ago and was off from work for months. He’s now back at work, but it was a big set back and he will always be disabled. What percentage could I settle on an $800 debt on a Walmart credit card and do you think his disability would lower the settlement or do they really care?

    • Michael Bovee says:

      LG – This will sound contrary to how debt collectors are perceived, some do care about personal hardships. But caring, and following collection policies, are two different things. Negotiating a payoff is certainly an option for you. Settling smaller balance accounts like this is not always going to be at a dramatic savings. When the account lands in an attorney office for collection, that can also raise the bar for what you can settle at.

      A general target for the situation you shared would be anywhere from 40% to 80%. There is a small list of things to consider when trying to narrow that settlement target percentage. If your credit report shows you are paying other unsecured debts (other cards, not a mortgage or car loan), the higher end of the target will be more realistic. If your credit report looks like a grenade blew it up, the lower end may be more obtainable. It also matters that you keep your conversation when negotiating limited to how hard it is to make your regular bills.

      • I have tried contacting this company for almost a month now and either get busy signals, no answer or voicemail. I have left voicemails and even faxed them asking for a return call. I haven’t received any follow up. Is it possible they are avoiding me so they can file a lawsuit? I have documentation that I called and faxed them.

  104. Latanya says:

    Please help

    My father just got a summons Midland Funding for a Dell account in his name that he got computer for me in 2002. My father had switch everything in my name the bill and everything to me so I was paying down on the account when I lost my job in 2010 I called Dell and told them I wouldn’t be able to pay the bill any longer and can they come and get the computer or could I return it they said ok. But no one picked it up. So I kept calling Dell about the computer and when they was going to pick it up they told me they don’t want the computer and I said ok but I cant afford the payments anymore and the situation just went downhill. My father didn’t seen a bill since 2010. They called my father on January 2013 about owing $3950.00 on the account. My father cant afford that he’s 80 years old and I sure cant afford that right now and they want to give him a settlement of $3400.00 but that’s still a lot of money what should I do go to court to settle it or what please help me on this one someone, anybody. Thank you for any advice

    • Michael Bovee says:

      Latanya – You could probably settle this for less than 3400, or get affordable monthly payments over a longer period of time. The alternative would be to defend against the suit with the goal of either settling, so just a delay, or succeeding in the defense. You would want to consult with an experienced debt defense attorney in order to set yourself up for the best outcome if you defend this.

      What are you inclined to do? Can you raise roughly half the amount you are being sued for quickly?

  105. Michael,
    Thank you for your very useful article. I have also read though several of your Q&A here and I beleive you might be willing to offer some advice.

    I am being sued by Midland Funding, LLC for a credit card debt to Chase Bank for $16,400 including interest. Chase charged it off on 5/31/2010, and the last payment made on the account would have been made several months before that, but I do not recall the exact date; likely sometime in 2009.

    I initially contacted Chase in 2009 to negotiate a payment plan prior to falling behind, but I was refused since my account was in good standing. My only option was to stop making payments in order to ‘qualify’ for any help. Since then, my financial situation got worse, I sold my home at a significant loss and expense due to market conditions, sinceI could no longer afford the mortgage payments and property taxes. I focused instead on other consumer debt left over from my divorce and other obligations that were easier to handle, since there was no way I could cover my living expenses, other obligations and payments to Chase. Since that time, I have lost count of how many times the account has been sold to another collector.

    I have since been laid off from my job, exhausted unemployment benefits, cashed out IRA’s and 401K to cover living expenses and have no real income. Last year, I entered a sweat equity partnership to start a new business with a close friend, and since I have no income or salary, he is basically supporting me until the business can afford to pay me. Unfortunately, we are now in the process of closing that business, and I am basically looking at moving in with family, or back with Mom and Dad at 41 years old until I get back on my feet. I can’t really afford an attorney, but feel it is important to respond to the citation and hope for a reasonable outcome. I would really like to know what a reasonable expectation might be.
    Thanks.

    • Michael Bovee says:

      Ed – A reasonable outcome could be a manageable settlement with them, but where would the funds come from? You could also look at defending the suit. That is best accomplished working with an experienced collection defense attorney, which you pointed out already, has costs. You can also consider chapter 7 bankruptcy, but here again… costs.

      What are you inclined to do? Are there any resources you can tap to pursue any of those 3 alternatives? If so, how much money can you raise?

  106. Brendan says:

    Hello Michael,
    I badly need your expertise and advice on this situation. I’ve been served by an attorney hired by an original creditor and it is called limited civil case. I just got the summon from this a attorney office yesterday.
    I owe $ 21,000 on the business credit card and I was out of business on 2009 and broke.
    Should I file a response or negotiate the settlement? What will happens next after filing s response?
    Here is the additional info
    - Original creditor: American Express
    - The creditor sent the account to other debt collectors (INC Nationwide Credit, Inc. and NCO Financil System, Inc.) before it was sent to the attorney suing me. I’m not sure if they are debt buyers.
    - Debt collector attorney/law firm suing me: Law Office Of Robert L. Bachman
    - My last make a payment on the debt: June 2010
    Thanks,
    Brendan

    • Michael Bovee says:

      Brendan – American Express does not sell debt. You are dealing with an attorney working for AMEX.

      If you file a response you will need to be prepared to move through the discovery process etc.

      What are you prepared to offer to settle this? How quickly can you put together the money?

      • Brendan says:

        I can gather up only $8,000 and wonder if it is ok for settlement. Thanks

        • Michael Bovee says:

          Brendan – Based on current trends I do not think the 8k will be enough to settle your American Express account that is 21k. There are instances where that type of percentage savings from settling is doable, but generally not once you have been sued. Can you document a limited income, or other hardship scenario?

          You should look to connect with an experienced debt collection defense attorney for a couple of reasons:

          1. Being sued means speaking to an attorney just makes sense. But not just any attorney. There are really very few with a practice that focuses on defending collection lawsuits. Those that do will consult with you initially at no cost.

          2. If you retain one to help you with the suit, it would help to delay any outcome so that you can raise the additional money to settle. That attorney can help you with the negotiations too. With an amount this high, it would likely be worth it.

          You can send an email to the address you are getting these comment updates from with the name of a nearby larger city, and I will reply with contact info for the type of attorney you can consult with.

          You may also want to consider calling in to consult with some of the resources available through this site. That call is also no cost. The specialist you speak with will drill into more details in order to identify things that may help you settle for something closer to what you have available.

  107. I am being sued with CapitalOne named as the plaintiff however I have every reason to believe the attorney suing is part of a firm which bought the charged off debt from CapOne and is looking for a default judgement.

    I am preparing an answer, however is there a way for me to force the Attorney to prove his relationship with CapOne prior to me filing the answer? It makes a difference because in this case I am being sued in a Municipal court in a town a long ways away where I used to live two years ago. My understanding is that under the FDCPA third party debt buyers must sue in the area “Where I live” now.

    Thanks

    • Michael Bovee says:

      Mike – I cannot know whether the debt was purchased by the law firm, or as is sometimes the case purchased by a company the firm has a controlling, or other interest in (this happens more than people think). You would have to get to that in the discovery phase.

      When it comes to suing you in the proper jurisdiction, it would not matter if it were a debt buyer or an original creditor. If you are being sued in the wrong county you can address that with the court regardless.

      Have you thought about connecting with an experienced debt defense attorney for help?

      • Thanks for your reply. I have thought about hiring an attorney but I can’t seem to find anyone in the small town where I am being sued who is experienced in debt defence. On top of that it is 250 miles from me. Does the attorney have to be local? I am not sure what to do really. I just prepared a motion for definite statement on my own but it will probably get tossed. Whats that they say about the person who acts as his own attorney has a fool for a lawyer………..

        • Michael Bovee says:

          Mike – It should not be too difficult to locate an attorney to answer the complaint raising the wrong jurisdiction issue (wrong county). Geography for something basic may not matter. Send an email to the address you receive the comment email notice from with the name of the city you are in now. I will do some research and send you back an email with contact for the nearest attorney I find who has the experience you need.

  108. Michael,
    I have a $16,000 debt with AmEx.
    I’m 67 and collecting my full social security. I do some “dog-walking”/ pet-sitting part-time. These are the only two sources of income.
    I tried to negotiate a lower payment with AmEx, but they will not lower my monthly payment.
    When I initially got the AmEx card, I had $500,000 in the Stanford Bank, which I lost every penny of it about 5 years ago when the SEC seized all the bank’s funds, and in one day I lost my $500,000 life savings.
    I’m not that concerned about my credit rating, but just received a letter from an attorney. They want to know if I dispute the debt amount with AmEx, which I don’t, and are giving me 30 days to respond to the letter. I’m assuming that this is the start of AmEx suing me?
    What I’d like to know, is what can they do to me by suing me? I have a townhome in another state that is being leased to a young couple, and managed by a management company. I come out $100 ahead on that, between the mortgage that I pay and what the tenants pay to the management company.
    What is the worse that AmEx/attorneys can do to me? I’m considering filing bankruptcy. Can they put a lien on my townhome that I lease? I have no other real collateral except for my car, can they put a lien on that?
    Thanks,
    Hank

    • Michael Bovee says:

      Hank – If the letter from the attorney AMEX sent your debt to is one you can verify that the firm has offices in, or is licensed to practice in your state, it does often mean you are now much more likely to be sued for collection.

      If you end up with a judgment, your social security is protected, and your bank account would not be levied if the only money deposited is from exempt sources. That 100.00 you clear on the rental, if mingled in with your social security, may not be a good idea. Money you receive for odd jobs like pet sitting is also a concern. If this escalates to you needing to be concerned about a bank levy (a judgment was entered), you may want to adjust how you bank.

      Filing chapter 7 bankruptcy may be complicated by that property you lease. You will want to consult with a bankruptcy attorney about any implications with that. Your car may not be at risk if there were a judgment out there unpaid, but talk to the attorney about that too – each state is set up to handle this concern a little differently, either when collecting on a judgment, or keeping the car in a chapter 7 – based on value.

  109. Michael,

    Could you please provide me with an attorney you would recommend for me. I am in Clarkston, Michigan

  110. Excellent detail in the original article!

    My wife has been served a small claims summons from a collections company, the debt was originally for a credit card, in the amount of around $4000. As far as we know, the debt is legit, however there is just no way to pay it back right now. Even on a payment plan, anything more than about $20 a month just digs us deeper. We are in IL as far as laws go, I’ve read up on what is exempt from wage deduction and other possible ways that a judgement can be enforced
    Question is… what are any possible benefits of going to court? She is working in the middle of a 6 week assignment from a placement agency, so no paid time off to spend a day in court. After that she’ll be back on unemployment. There are medical issues so holding a full time permanent job is not a guarantee.
    When did people realize that it’s silly to sue people that you can’t collect from? Or is this just a part of the debt collection machinery- get a judgement and then sell that to make “something” in return? It’s just very frustrating that we manage check-to-check, yet it costs to have any defense, especially when that defense is that she doesn’t contest the loan.. so really whats the benefit of showing up vs a default judgemnt?

    Thanks

    • Michael Bovee says:

      Brad – Unfortunately, suing people with no ability to pay now, does make sense from a debt collectors perspective. The resulting judgment, if one is obtained, will often grow with judgment interest, and someone unable to pay today, may be able to pay next year, or the year after that, or the following year etc.

      What are the benefits to defending the suit given the information you shared? Not much really. Unless there were some legal arguments your wife was prepared to make.

      If you are clear on your state exemptions from garnishment, have no property to lien, you still need to be concerned about a bank levy – if a judgment is entered.

  111. I was just summoned today for a credit card from Citibank for 9500.00, I was in good standing until last December. I tried talking with them a couple times to set up something I could afford and they wouldn’t work with me. So my question is when I go to court, will they be more willing to work out a payment plan with me? I can’t afford much only 50 to 75 a month.

    • Michael Bovee says:

      Shawn – With a debt the size of your Citibank credit card, I rarely see an agreement to pay that low of an amount monthly. But there are also situations where a creditor gets a judgment, and your state rules set beside your level of income and basic living expenses, would cause you to be noncollectable, or create a scenario where that small of a monthly payment is established by the court. You need to participate in the process at every stage.

      Be aware that making small monthly payments on a judgment can mean you are on what I call the “pay forever plan”. Read more about different concerns with credit card judgments.

  112. Anne P. says:

    Dear Sir,
    I have a judgement against me that I want to try to negotiate.The paper I was given says Citibank v. me.It says the judgement is for 12,843.79 and then goes on to say the balance on my account as of 5/1/2013 is 18,574.02.This is in the same sentence so I do not understand.This credit card is from 1/2009.I have been unemployed since 9/2011 due to a disability.I own my home and an old car.I will be receiving disability 9/14/2013.This will be my first paycheck.I have no other debt to speak of.Ambrose,Wilson,Grimm,and Durand.LLP are the lawyers.Mr. Grimm is mine. I live in Elizabethton,Tn. Thank you so very much!!!

    • Michael Bovee says:

      Anne – Ideally you would want to be negotiating a one time pay off. You have a limited income situation which would contribute to getting a good settlement. What is your ability to pull together a lump sum of money before you start negotiating?

  113. Michael,

    I’m being sued by Capital One (in Texas) for about $7300. So far, I’ve responded by Denying their Request for Admissions and submitting a Request for Production. The Plaintiff’s Attorney responded to the Request for Production by providing the original credit card application (from November 2000) along with copies of credit card statements spanning 2008 – 2010. According to these statements, the last payment was posted on January 20, 2010. The balance at that time was $6747.

    I’m not sure where to go from here. Just recently, I’ve read about requesting Arbitration but I’m not sure if that applies to my agreement or if it’s too late to do that (court date at the end of the month)?

    I literally have no assets, except for my home which is completely underwater (but thankfully, I was able to receive a loan modification a couple of years ago. I’m making payments but it could be another decade before the value of the property catches up to the lien).

    My questions are: (1) Should I request Arbitration? (2) Should I attempt to settle? If so, what’s a realistic amount and what are the chances of ‘paying for deletion’ on my credit report? While my credit isn’t the best, I’d like to avoid a judgement from showing up.

    Any advice is much appreciated! Thank you.

    • Michael Bovee says:

      MJ – You would likely be considered too far along in the court process to try to elect for arbitration now, but you should run this by an experienced debt collection defense attorney. In fact, you should consult with one about your case as it is today.

      Settling at this stage is usually an option, but there are instances where that would have been best done earlier in this process than now. Targets in your negotiation will vary on several things. How collectable you look on paper (limited income, home not really an asset etc), will be part of what the other side may weigh. Is there a reason for, or something you read, that suggested you get this far in the process before seeking settlement? Are you already working with an attorney?

      Targets for settlement with Capital One at this stage can range between 50 and 100 percent. The only time I see less than 50% is when there are documented hardship situations that suggest there will never be a better recovery option for the collector/creditor.

      There is a zero percent chance of pay for deletion. Not even if you paid in full. You can certainly avoid a judgment showing up on your credit report though.

      • Thanks for your reply.

        Last week, I consulted with an attorney (several, actually) and it looks like my best bet at this point is to try to settle. I’ve been doing this on my own and simply didn’t think that Capital One had a case against me. From what I’d read online, I thought that most credit card companies kept terrible records and while that may be true; it’s not the case here. So, I was surprised when they produced so much evidence against me.

        Right now, I’m trying to negotiate on my own because I don’t have enough to hire an attorney, and settle. I certainly wish I had hired an attorney from the start. Several that I spoke with offer monthly payment options.

        I have five days before trial. If negotiations fail; I’m preparing to file a pauper’s affidavit. It doesn’t look good …

        • Michael Bovee says:

          MJ – There is substance to some of the stuff you may read online about defending against a credit card lawsuit, but there is also a whole lot of garbage out there. Even some of the informative stuff has some oddball information woven in. Banks generally do have the records needed to prove up their claim in court. When debts get sold over and over, the records to substantiate in court can be more difficult to obtain, but even that is becoming less and less the case lately. I expect in a year or two, nearly all credit card debts that reach the court level, whether bank owned or debt buyer purchased, will have the necessary docs to back up the claims.

          There are some great consumer law attorneys out there, no doubt about it!

          As far as negotiating now, or at the court house – what amount of money can you pool together to settle? In the event you cannot settle for a lump sum, what amount can you budget to pay monthly in order to avoid a bank levy?

          • My husband has a credit card that will allow a $2500 cash advance (disgusting, I know … robbing Peter to pay Paul), and I have another $500 that I should be able to put with it – so $3000.

            We are behind literally every month on basic expenses like water, electric, and gas; so, I can’t imagine being able to make monthly payments and sticking to it.

            Am I totally screwed? There is an attorney who offered to help me settle for a fee of $500. Should I just give them the $500 and see what they can work out?

            Thanks so much!

            • Michael Bovee says:

              MJ – Given the circumstances, I do not think paying 500 to the attorney to work at settling will result in a lump sum settlement you can pay with the 2500.00 remaining.

              Let me ask a couple of additional questions:

              Are there additional outstanding unsecured debts (credit card, medical, etc)?
              Are you both working? If so, part or full time?

              • Ok.

                Yes, I have another credit card (about $12k) that was charged off November 2009 – holding my breath until this November when the 4 year SOL runs out. And 2 medical collections – about $600 each. There is a third outstanding medical bill in my husband’s name; it’s only about $160 so the plan is to pay it off asap as the collection hasn’t yet showed up on his credit report.

                My husband works full-time. We have two small children (ages 2.5 and 4), and I stay home with them to save on daycare costs (which would be about $1700/month).

                • Michael Bovee says:

                  Thanks MJ – The medical debts can be managed when you are better positioned. But with another 12k balance out there, chapter 7 bankruptcy may provide the most relief, at the lowest cost, and allow you to get a fresh start. Have you considered it?

                  Alternatively, if Cap One gets the judgment, and you cannot commit to some form of payment, you cannot be garnished, and should remove your name from any joint account with your husband. You could formulate a plan to resolve the judgment, and other debts as your finances improve, or even file chapter 7 later on.

                  • Well, no I had not considered Chapter 7 bankruptcy, but I’m researching it now…

                    However, emotionally, I don’t think I’m ready to take that step. So I’ve hired an attorney to help with the Capital One case. If my attorney could at least postpone the court date, I may be able to come up with more funds to settle. And hopefully buy enough time to get closer to the SOL date for the other account in the Attorney’s office.

                    Thank you so much for your help! Really, I can’t thank you enough.

  114. Gabrielle says:

    Hello, I am desperate for some advice. I was served in late June to go to court for cc debt tomorrow morning in MO. The amount owed it’s around $2100. I wasn’t aware needed to respond to anything, I thought I just needed to show up. I don’t have the money for a lawyer. I had made a previous agreement to pay a lowered payment before it was handed to collections, but it became too much. Do I still have time to request debt validation? I saw something about a federal regulation that they can only garnish a certain amount of your wages, something like they have to leave you with $217? My checks aren’t much more than this as I only work part time and am the mother to an infant. I could probably come up with $800, maybe $1k to try and settle. Can you settle for a lesser amount and still make monthly payments? I am very worried as I don’t have alot of extra money. The debt was bought by Convergence Receivables, LC from Kay Jewelers and the attorney handling it is Charles L Litow (PO Box 698, Festus, MO 63028 866-795-6375). Please offer any advice…we are a young military family and don’t have alot of income.

    • Michael Bovee says:

      Gabrielle – I am only now seeing your comment post from Sunday. By now you would have already appeared in court. Please post an update with what occurred and lets go from there.

  115. I have been served a summons for cc debt of 15k. It is an attorney in Co on behalf of bank of america. Last yr I made 8k..I was unemployed several yr before that and I am unemployed now. I am living with friends. I do not have any assets and have not been able to get a job. I watch my friends kids in exchange for a place to live. I dont have the money to file bankrupcy . What should I do? The summons says to respond in writting to the claim.

    • Michael Bovee says:

      Jill – Are there other debts out there beside this one you are being sued for?

      It sounds like you can qualify for help from a low income legal aid office. This could mean help answering the lawsuit, or even help filing chapter 7 bankruptcy (where often the only costs will be the filing fees – couple hundred dollars).

      If you need help locating an office nearest you, post the name of a larger city in your area and I will help you research that and email you what I find.

  116. Michael,
    Your responses to other questions have given me insight, but I did not see an answer to an additional question I have, so I apologize if you have already answered a similar situation. I was sued by Capital One’s lawyer Michael Scott in TX for approx $2k (original credit limit $500, chargeoff was approx $1k and stopped paying due to telephone reps not documenting agreements) and served papers July of last year. I did not get the papers until literally the day before the response was due, so in a panic, I submitted a response denying everything until I spoke with a lawyer (still have yet to do that). The clerk at the courthouse said the next step was for Capital One to decide how to proceed. It seems the case has slipped through the cracks. I noticed that they had put in a request for default judgment in August of last year, meaning they weren’t counting on me to give a response and did not notice that I had. After that, there has been no update in the case whatsoever. I received a letter a few weeks ago from The Scott firm with an amended lawsuit (they separated the amount in the prayer and dropped the lawyer fees down by a couple hundred dollars), but again nothing listed on the court record. Also it lists my account being a small business credit account, but I do not own a small business. Would it be worth it to continue on and wait for the court to fight, or would I have any luck requesting to settle for the original amount owed? If I were to email rather than call (I no longer trust phone calls to set up deals), and we do not settle on something we are both happy with, can those emails be used against me in court? I am currently unemployed, but live fairly comfortably under my husband’s salary, a lump sum would hurt us for a bit. Also, could this possibly be a reason I have not received any employment offers after successful interviews? Thanks in advance.

    • Michael Bovee says:

      Ms. – Yes, it would be possible to negotiate a lower payoff at this point, but settling at 500.00 would not be a realistic target. If it were me I would not send emails. I understand the desire to avoid the phone, but your results will likely be better achieved through conversation. You are dealing with a law firm, and a case already in the court, so are in a regularly document intense environment. I doubt any request for documentation of your agreement prior to payment would be ignored.

      It is possible that your being passed by for job opportunities because of unresolved debts on your credit – if part of the application process was to give permission to run a credit check. You will not likely get a potential employer to tell you that is what happened (for most jobs anyway).

  117. Hello Michael,

    I understand that in Texas, the statute of limitations is four years on open ended debt(credit cards)

    Does the clock start ticking at the date of last activity or does it begin at the time the account was first first reported as derogatory. The first thirty day late shows to be a couple of months after the reported date of last activity from the original creditor and the collection agency is using the date it was transferred as their date of last activity.

    Thanks in advance, and have a wonderful day

    Devin

    • Michael Bovee says:

      Devin – Generally, the date you first missed a payment to your original lender, and there after continued to miss payments, is considered the start date for determining the SOL in order to legitimately file suit to collect.

      A collection agency reporting the DOLA as the day they received the account would often be considered inaccurate. Are you trying to determine your risk of being sued for collection, or are you more focused on when something will age off of your credit report?

      • The original creditor shows DLA as 07/09 and the first thirty day late as 10/09

        It was taken over by the collection agency 10/09 and they show DLA as 10/09

        As I am four years from the DLA of the original creditor this month, I was doing a little research to try and determine when my actual SOL expired for the account.

        I am trying to determine my risk of being sued for the collection at this point, as I have read that many collection agencies wait until right before the SOL expires to file suit

        Thanks again for the help, and have a great day

        • Michael Bovee says:

          Devin – It would appear to me that you would have missed your first payment 8/09. If you were sued, and depending on if that were to occur in or after September, you would likely want to raise the SOL defense and get them to prove up when your first payment was missed.

  118. Hello and thank you for this site. I have seen an attorney, but I still do not know which way to go and I need to do something NOW. Your opinion would be a life saver to me. My situation is this… I have unresolved credit card debt from mid 2005 when I lost a very good job. Instead of asking for help to pay the few cards I had (my credit report was perfect, never a late payment) I was too proud. I decided to be a stay at home mom, daughter 5 at the time, and begin the creative business I had always wanted to start. I began liquidating all available monies to make the payments and protect my credit rating. I also prematurely liquidated my 401k to try to get to zero debt. That wasn’t enough and I still hadn’t learned the lesson of Don’t buy something if you don’t have the money!!!! I know it now… Just the sight of a credit card turns my stomach. The credit card co.s would only help when I was behind 3 months. I even took out new cards w/ low interest rates to transfer the now high rate cards to try to keep in good standing. I continued this nightmare with no one even suspecting I was in such trouble. I limped along, still liquidating, until it all began to unravel in 2008 into mid 2009. That’s when I just quit. My bank account closed and my head went in the sand. What a toll that decision takes on a person who believes in paying what you owe. Since then, I have had the calls (never answered) and collected and saved the written statements and offers. My plan was when I had a pool of available money, I would contact them and settle the debts lump sum. That did not happen because I was afraid to apply for jobs with my abysmal credit record. Then, on 06/27/13, I was served with a summons. I was being sued by Unifund for an old Citicard account they purchased in January. The law firm was in Tampa, Fl. My thought was, thank God for this. My life is frozen in time until this is settled. I went through all old statements and paper offers to find the current owners, and noted the discount they were offering as of 6/13 on the now hefty balances w/ the interest, etc. accumulated. Most are at 70% and up. I met with an attorney who specializes in negotiation and bankruptcy to see what my options were. The deadline to respond to the summons was 7/17/13. He suggested not responding to the court because the debt was just inside the SOL, the debt was mine and I sadly have no assets left and have not worked since 2005. Nothing is in my name. He suggested chapter 7 as I qualify. So, finally. my question. If I file chapter 7, which is bad enough, I believe there will also be the judgement from the court. If I want to go back to work, this will show up. Or, if I can borrow enough money, I can contact the companies, negotiate a doable amount for each to lump sum out, and avoid the chapter 7. I called the law firm in Tampa and explained that I have no assets, but that I would prefer not to declare bankruptcy. I stressed that there is no point to paying one, if all cannot be settled. I would need time to do this. I then gave him a very low offer for cash that day because it was all I had available. It was only $3400. for a debt that has grown to $28,000….my largest. Of course, no deal. Even if I manage to get all of them to amount I can handle, there is still the proper written statements acknowledging that the settlement constitutes payment in full and the notation on the credit report. There would still be the judgement, unless I get the law firm to remove it from the court records, as I am settling for money with them. It all sounds impossible. I feel I owe the original creditor the balance, not the companies that reportedly pay less than .05 cents on the dollar for such old debt. How do they hold fast on original balances, knowing they paid almost nothing. My situation is truly something or nothing. It is also explainable but inexcusable. I don’t know what to do. Thank you for offering the service you provide and apologies for the length of this. (I live in Fl., have 10 outst. debts totaling currently about $40,000. The debt co.s are 2 w/ Asset Acceptance offering 85 and 90% discount.; 5 w/ MCM for old Chase business offering 70% on low ones and 40% on higher; 1 w/ Calvary and 1 Discover (Northland) and the Unifund case.). Just shoot me!

    • Michael Bovee says:

      Ann – First off, thank you for providing such detail. It really helps me get right to the point.

      You may have been consulting with a decent bankruptcy attorney, but that attorney is not who you need to be speaking with about negotiations or defending a lawsuit from Unifund. If you are serious about avoiding bankruptcy, I want you to call an experienced debt collection defense attorney on Monday. The advice you were given about handling the situation with Unifund did you no favors as far as keeping all options on the table. The only shot you have at getting a reasonable settlement with them at this stage is by not being the “low hanging fruit” and allowing a quick judgment.

      Pursuing settlement on ANY of the other accounts in an effort to stay out of bankruptcy, before addressing the Unifund account, would be putting the cart before the horse. That said, you can get better deals on some of those than you referenced were offered to you in the canned letters you opened.

      If you have 3400 to offer as a settlement to Unifund, you likely have more than enough resources to work with a skilled and experienced debt collection defense attorney – if they see an angle to get the court to agree to some excuse as to why you did not respond timely. That is going to be the first hurdle, and one I cannot comment on from Idaho. If I can help you find an attorney near you with the type of experience you need, they will probably already have experience in the court you were sued in, and will know if you have a good chance of overcoming the tardy response to the lawsuit, and will be able to advise from there.

      Now, that speaks to avoiding bankruptcy. But you would be a good candidate to embrace chapter 7 discharge too. The cost all told will be more than covered by the 3400 cash you have available. You would get a fresh start within a matter of months. It would be the most cost effective way to manage the situation. Perhaps that is what the attorney you consulted with saw from the start, but I still do not agree with not filing an answer and buying time on the Unifund debt to avoid having a judgment recorded, while your bankruptcy progressed.

      Send an email to the address you receive this comment update from with the city you live in. I can email back contact points for one or more attorneys you can call about the Unifund issue.

      • Hello I am immensely grateful. What a wonderful service you provide. One of the biggest problems is knowing who to go for the initial questions. Most don’t know where to turn. I looked at every site I could find that confirmed what the atty had said. I knew to not respond did not seem right. This is why what you offer is so important. I had no idea what the mechanics actually are to all of this. Several sites said if there is no defense to the debt, there is no response. I am so confused. So, I live in the Daytona Beach, fl area. And now I’m really in a panic. THANK YOU. Ann E

        • Michael Bovee says:

          No need to panic Ann. You will have options to pursue either way. This site is here to help with the details that get overlooked, or that are often left out of the equation. I will say that any site you read that did not at least mention the potential benefits of responding to a collection lawsuit should not be viewed as a complete resource.

          Check your email for the attorney contact info I sent.

  119. I questioned before about my case, I received summons from an Attorney in Atlanta (where I live) for a suit from CACH, LLC on behalf of Bank of America for a $1600 credit card default. The debt is old but not outside the limitations for the state of GA yet (it’s at 5 years, and Ga is either 8 or 9 years). I filed a general complaint form from the courthouse website and sent in to both the court system and attorney. I cannot afford my own attorney so I am attempting this at my own risk based off of a lot of research. I immediately received a response from the court system posting a court date, but I absolutely cannot be there the day of the court date, because I am out of state, and this date is this week (Wednesday). Is it possible for me to simply contact the lawyer who is suing me and attempt to settle and avoid going to court?

    • Michael Bovee says:

      Kat – You can always contact the attorney suing and work toward negotiating a settlement. You can also call look at your options to get the court to set a different date for the hearing.

  120. Hi Michael,

    I have read over 70% of the horror stories on this blog and decided to share some good news!!!

    I was recently sued by Tidewater Credit Services. The debt was right at the cusp of the 4 year SOL since my last payment. I was served the court summons in the beginning of March for an amount of approximately $1600 for an old unpaid furniture debt. I spoke with an attorney that was part of a $9.95 a month legal plan that I pay into who gave me otherwise free advise on how to answer the summons by filing a “general denial”, which I filed with the Superior Court of San Diego for a $225 fee.

    I have since moved from California to Ohio and only yesterday decided to check on the status of the San Diego case on the courts website and I found out that the case was “DISMISSED” in late April about 10 days before I moved to Ohio. My primary answer to the summons was based on the fact that the debt was “time barred” from the statute of limitations of 4 years for credit card debt in California but also that the items purchased were misrepresented to me as being genuine leather when in fact they were not and began to crack, peel, flake and fade. I also brought up that the plaintiff had violated the Unruh Sales Act of California.

    My story had a happy ending and I just wanted to share it with other readers to let them know that a little research can go a long way in fighting back against creditors and lawsuits. My advice to readers is to strongly consider joining some type of legal plan where you pay a small monthly fee for otherwise mostly free advice for things like creditor disputes. I have used my legal service on at least 4 different occasions to handle creditors for “cease and desist” letters and the like and have never paid a cent for services thus far. Should you actually require paid services they come at an extreme discount when compared to non members. It is the best $9.95 a month that I’ve ever spent!!!

    I hope my story helps someone.

    Good Luck to all.

    • Michael Bovee says:

      Thanks for sharing that Niko. It is by far better to connect with an attorney on legal issues like debt collection in the courts, than not. All the better when the help is affordable. It sounds like the collector was either time barred from collecting through the courts, or could not obtain the information necessary to prove they could still sue (which indeed happens).

  121. Hi, I was served last week by an attorney who I assume bought my debt from a collection agency, I’m sure this debt has gone through a lot of different companies. I’ve been researching a lot online regarding being sued over credit card debt. I’ve read that it is in my best interest to contact an attorney who can help e with my ” answer” which I’d then bring to the court house to reply to this. And that typically these types of cases will Get dismissed if you ask for ” burden of proof” which they most likely wont have due to all the hands my debt went through and thy wouldn’t ave the original form I had signed at the time of opening the CC. And that these people that sue do so because most people just ignore the suit and that’s how they win the case. Am I right? The debt is about $1800. I’m not sure where its from. I have about 3 unpaid debts from years ago, I was young and dumb! Admittedly. Would you be able to help me find someone in my area experienced in these type of cases? A debt defense attorney in California? Specifically San Mateo County? I would greatly appreciate any advice and referrals! I’m very worried about this and do not have a lot of extra money to spare! Thank you so much! Amy

    • Michael Bovee says:

      Amy – I am going to break my feedback down into bites, and ask some questions afterward that you can answer in a follow up reply if you would like, or simply reach out to consult with the attorney I emailed contact info for.

      It is in your best interest to contact an attorney that is experienced with defending against debt collection lawsuits. Most of the ones I would refer you to offer a free consult, so it just makes sense to start there. You do not have to retain them. Just discussing the situation can bring clarity to your next steps.

      Getting a collection lawsuit dismissed based on the burden of proof is an overly simple way to put it. The proving test will be different from one state to the next, and even from one court to the next.

      Debt does not always change hands frequently. Less down river debt sales are happening these days, and even less will occur in the future based on current trends.

      Demanding the original signed credit card contract in today’s digital age is just not something to rely on them needing to produce. It is just a small part of the defense strategy an attorney might use.

      You are definitely right that most credit card lawsuits are filed with the expectation that there will be no response, and therefore very little time or money needed to invest in getting the judgment.

      Who is the plaintiff that is listed on your lawsuit? Who is the attorney suing? When did you last make a payment on the account?

  122. I was served with a summons dated May 17th, 2013 over a debt with Capitol One for $3,317.46. Capitol One is the plaintiff and Buffaloe & Associates in Nashville, TN is the law firm representing them. There was nothing attached to the summons (although there were staple holes) but as I am reading online it seems there should have been a complaint attached. There were also no instructions on how to respond to the summons but there was a court date of October 1oth, 2013. Since I had a few months until the court date I have not taken action up to this point. But as I started reading online, it seems I should have responded within 20 or 30 days. Is this correct?
    I am now trying to determine my options here. I would really like to settle this or do something to avoid getting a judgement against me.
    Here is a little background on this debt: After originally going into default with Capitol One after some life circumstances hit me hard, I started making payments through basically what seemed to be a collections department within Capitol One. I did this for several months but the payments were high and after having a baby and being out of work for a while I quit making payments. A few months later I got a letter from Buffaloe and Associates stating that they had taken over collections on this account. The letter was dated Feb 12th, 2013. The amount this letter said I owed was $3,317.46 (same amount that the summons I received on May 17th said). I eventually contacted them and set up a payment plan of $100 a month and I made my first payment of $100 on April 1st, 2013 on their website. However, I didn’t make another payment after this one. I am on payment arrangements for multiple debts and I didn’t receive any kind of reminder from them so it slipped my mind. After I was summoned at work because they didn’t have a home address for me I realized what happened. The letters that I was getting from Buffaloe and Associates were forwarded to me from my previous address and the mail forwarding service had expired and they didn’t have my current address (even though it was included on the payment I made April 1st). So to recap, the original letter they sent me on Feb 12 said I owed $3,317.46, I made a payment on April 1 of $100, and the summons dated May 17 still said I owed $3,317.46. So basically I am not credited for the $100 I paid. Can I use this discrepancy to buy myself some more time on this? I have the receipt for the $100 online payment and I can also get bank statements showing this too.
    I also have another credit card with Capitol One with a low limit ($550). I have stayed current on this card since payments are low but I feel like this may be one reason that Capitol One has gone ahead with a lawsuit over the other card.
    I am just trying to determine my best course of action here. I have around $1,000 I could pull out of savings right now but from what I have read this probably wont be enough to settle. I could probably come up with around 60-70% of the debt before October but it would spread me very thin. This is why I was wondering if it would be possible to buy any time. Any help on this would be greatly appreciated!

    • Michael Bovee says:

      Amanda – You indeed should have filed an answer to the complaint. That is how you avoid a judgment by default. You may still be able to file an answer, but it would be best to contact an attorney with experience in debt defense to help you do that at this point. This is how you buy the time you need to come up with more money to settle this in a lump sum (a few months from now if needed).

      Getting hung up on the 100 dollar payment at this point is not productive.

      If you need help finding an attorney with the experience to help, send an email reply to the comment notification email you get with the city you live in. I will reply with some contact info to one or more.

  123. After reading all your replies I was hoping you could give me some advice. I was recently served papers notifying me I am being sued by Cypress Financial Recoveries as successor to Capital One for a debt of $1,534.40. I would like to settle out of court and am thinking about contacting the plaintiff’s attorney, Messerli & Kramer PA. I don’t have he full amount but want to give as much as necessary to end this quickly and drop the case. Any suggestions you have of what to say/ what to offer for a settlement? Also I wouldn’t have the money till this Friday or next, should I wait to call? Will I still need to file an answer if we settle and will this still be on my record?

    • Michael Bovee says:

      Kelly – It is often better to file a well put together answer to the lawsuit in order to follow that up with an offer to settle (in order to get the best savings). If you were to call now, you may be able to settle just the same, if you have compelling hardships. If you can offer between 60 and 80% you may be able to get this done without anything further. Be sure that the agreement includes Messerli and Kramer dismissing the suit.

      When you call, keep your discussion limited. You are calling about the lawsuit, considering your options including contacting a consumer law attorney, but wanted to know if the matter can be settled for (offer round figure close to 60% of the balance)? If you need to outline why it is tough to be you financially right now, it is okay to do that, but only if it is indeed a struggle to meet bills monthly etc. No need to tell a long story.

      They may ask questions, but stick to responding with something like “That is a fair question, but I am uncomfortable answering it, or any other ones really. I simply want to know what the options to resolve this directly with you are. If it costs less to just put this matter behind me, and I can succeed with borrowing the money to do it, I may want to do that vs paying an attorney with experience in these matters to help me”.

      Ideally, you would call and speak with an experienced debt defense attorney for a free consult before deciding what to do next.

      If you settle now, and get that documented, they would generally file paperwork to dismiss, so there would not be much to do on your end. If you settle at a single lump sum payoff now, or even after filing an answer, you would still end up with a dismissal. Which would mean you avoid having the judgment placed in the court record that later gets shown on your credit report.

  124. I just received a letter from a bankruptcy lawyer making me aware for the first time that I was sued by Main St Acquisitions who are represented by Smith Carroad Levy & Finkel, LLP for a dept that I assume was from a wamu account I had that was transferred to chase when chase bought that bank out back in 2008.

    I believe the total debt might have been around 4-6 thousand .. I am not sure. I believe the the last payment made on that card might have been in 08 or 09

    This has been so long that I totally forgot about this and at this time I have no funds as I am basically living paycheck to paycheck trying to get by.
    Per the inforamtion on the civil website of NY it shows that it was filed back on Oct 2012. I am just now being made aware of this due to this letter I received. I have been receiving phone calls both from Florida and I believe from NY as well however for the florida account whenever I pick up I hear nothing, no one answers or responds.

    A couple questions …
    1.Has too much time passed on collecting this debt ?
    2. How do I find out what was the amount owed on this debt
    3. Does it hurt me by reaching out to try and find out the amount being sued for
    4. What options do I have in resolving this

    This is the first time this has happened and I am not sure how to proceed

    • Michael Bovee says:

      Marcel – The way I read your comment – the suit has been filed, but it has not been reduced to a judgment because you have not been served. You live in New York. If I am wrong on those two points than let me know.

      1. The date you think you last made a payment on the debt looks to be still within NY SOL to sue.
      2. Pull a copy of the lawsuit from the court to determine the amount they are saying is owed. You can look to see the amount the original creditor charged off on your credit report, and also if Mainstreet Acquisitions is reporting, what they show owed.
      3. If you mean calling them to ask about the amount hurting you, it depends what your goal is after you learn the amount.
      4. Your options are to do nothing, settle with them for less than the balance owed, set up payment arrangements, fight the suit, even bankruptcy is on the table.

      What are your goals?
      Do you have other outstanding debts out there?

      • Currently at this point I don’t have the fund available to possible settle .. Again at this point I am assuming that the debt in question is from Chase. I took a look at my credit report and the amount that was charged off by Chase was around $7,200. Unfortunately as I stated I don’t have the funds necessary to pay in full as they would.
        Reading the comments on here I was thinking if I could fight it to see if they have all the necessary paperwork to actually collect on this.

        Currently I am stretched thin as I have student loans that have been sent over to Sallie Mae that is around $9,000 plus. I just negotiated with them a payment plan that is reasonable to pay it off in 10 years.
        I also have a capital one account that is active that currently maxed out but I am in their payment protection plan and I make extra payments when possible.
        I have other bills that are in collections that I am trying to pay off as well. These are mostly medical that arised when I was out of work for the entire year of 2010. Unable to pay them I am now paying off the small ones but I intended on getting rid of those.

        Aside from utility and rent that I have to pay.

        The nuclear option would be to file for bankruptcy but from my understanding that would be detrimental to credit and me being able to eventually purchase a house etc.

        • Michael Bovee says:

          Marcel – Defending against a debt buyer suing you will often make the most sense. You have a good chance of succeeding if you work with an experienced debt defense attorney of your own. If you need help locating one in New York, send an email reply to this comment notification with the name of large city near you.

          Your comment about bankruptcy may/may not be on point depending on whether it is a chapter 7 or a chapter 13. Also can depend on your personal goals and timelines for buying a home. Read more about how different debt relief options help or hurt your ability to bounce back credit wise quicker here.

  125. Hi,

    I replied to a summons about a month ago with a debt. I owe Discover Bank close to 1500. Today, I received a Certificate of Representation and Parties – What does this mean for me? Am I able to settle the debt still with the attorney’s – I believe they bought they debt, Gurstel Chargo are the attorneys. I do not want to have to go to court and I can’t afford to. Any advice/help is greatly appreciated!

    Thank you.

    • Michael Bovee says:

      Jackie – Discover does not sell much debt these days. How long has it been since you last made a payment on the debt? You are being sued, and yes you can still settle with the attorney suing you. What can you pool together in order to negotiate and settle this?

      • I don’t remember exactly when, but sometime Fall of last year. Do I need to find an attorney, or can I handle this through a phone call? I can pool together 600 at the time being, would that be reasonable for a lump sum? What about monthly payments? Would that be an option?

        • Michael Bovee says:

          600 will not likely be enough to knock this down, unless there are really big hardships. You would have to aim closer to 60% of the balance they are suing for, or a bit higher. Payments are an option. If you have to do payments, they are going to want the full amount with fees. I do not like the payment route as they usually want a consent, or stipulation to judgement along with it. If you can, work hard to settle in one payment and get the case dismissed all together.

  126. I was served a summons from Nelson and Kennard for Capital One for $4600. I filed with court within 30 days to dispute. About 2 weeks later I was served a second summons from Nelson and Kennard for Chase for $11,000. I will dispute this within the 30 days to respond as well. I’m continuing to receive phone calls from Nelson and Kennard even though they have served me and I have responded. What should I do with these phone calls? I am ignoring them since my summons show a court date of June 2015. Do I have to talk to them? If I could settle I would but I don’t have approximately $15,000 to do so. I can’t afford anything. Should I let this go before a judge and waste the courts time? I have no job, my home is worth less now that what I owe. I have 3 small kids and my husband works full time but his name is not on any of these credit card accounts. He makes approximately $60k a year. Any suggestions on what I should do from this point? Thank you

    • Michael Bovee says:

      Barbara – I would recommend you speak with an attorney with a practice that includes debt collection defense. If you send an email back to the address you get this comment notification from with the name of a nearby larger city, I will send back contact info for any I find.

      You definitely should continue to be a participant in the court process. You would be able to navigate that best with help though. How the debt ultimately gets resolved will probably come down to settling, setting up a payment plan, defending the suits and getting them dismissed, discharging through bankruptcy, or judgements entered that may just sit there until resolved or until aging into the dustbin of bad debt (can take 10, 20, or more years).

  127. Hi, my husband and I were served a civil warrant today concerning a credit card that the orginal creditor was Bank of America but brought by Cavalry SPVI,LLC in the amount of 4838.33. In the attached affidavit it states that the account was open in Feb of 2000 and charged off in June of 2007. The attorney listed is Mendelson Law Firm from Memphis TN. First of all neither of us remember having this card. But per the warrant we have a court date of August 27th. We are not sure what we should do. can you lend some advise. We do live in Tennessee. Thanks

    • Michael Bovee says:

      Melissa – I recommend connecting with an attorney with a practice that focuses on debt collection. If the debt is not yours, you will want to beat this back quickly and effectively. If it is yours (maybe you don’t remember BofA, but had a Fleet or MBNA account), consulting with the attorney about resolving or defending the suit to some form of resolution is still the best place to start.

      Send an email reply to this comment notification with the name of the city you are in if you want help locating an attorney with the experience you need.

  128. Hi, A debt buyer sued me in court,and i responded to there claim,leading to a dismissal by them before court, i had sent a notice of appearance along with my responce and filed it with the courts stating that the debt colletor and there attorney are to send any and all notices to my address only.Now my question is,if the debt collector has got another debt agaisnt me ,do i have grounds to sue if they are calling me again?The Notice was stamped and filed by the courts and certified to them by signiture mail by me. Thankyou for any responce you may have

    • Michael Bovee says:

      Mark – A different debt means a whole new process. The court was only dealing with the issue in front of them at the time. If you are concerned about violations that rise to the level of suing them, you should connect with an attorney with FDCPA experience.

      • Thankyou for your comment,i have just found out today thay are calling about both debts,i think this would be bordrline harrasement,but i will talk to and attorney to verify. Thank you again for any futher thouhts.

        • Michael Bovee says:

          I would need to know more about what your goals are, who you are dealing with etc, in order to offer meaningful feedback.

  129. I posted this question earlier but I think it went to the wrong page or disappeared altogher:
    Thanks for assisting me recently in paying my judgement and having my credit report updated. To date, I’m working on a few other charge-offs and would like to know how to proceed:
    1) Question about the paid judgement- Since is was “released” should it not be removed from my report altogether ? One bureau updated it to say “paid” and another other just shows “pending”
    2) Regarding charge-offs (that are my debt): What is the best way to tackle these? Start with larger or smaller balances?
    3) Is it better to settle or pay in full? In other words, if my credit will suffer the same as settling as it does with the charge-off, it wouldn’t make sense to do that.
    4) Does it make sense to pay charge-offs or do you recommend allowing them to fall off after X years considering paying them sometimes hurts credit more?
    Thanks in advance

    • Michael Bovee says:

      Sorry T S, your post indeed went into cyberspace.

      1. Paid judgments should be updated with the court as satisfied, but do not come off of the credit report until the 7 years from original entry expires. Paid is how it would accurately reflect, and that update can take a couple of months. If it does not get updated you can get a court conforming copy of the satisfaction and file a dispute with the credit bureau. I will have a general tutorial up shortly on that type of thing.

      2. Prioritizing settlements that are charged off is best done using a combination of what you can afford to settle one by one, set beside who the original creditor is, whether a debt buyer has the account, and whether one of these is more prone to sue for collection. If you want to post a comment with the details of those accounts here, I can help with feedback for prioritizing and realistic expectations for resolving them.

      3. At this stage, settling or paying in full will not matter. Getting the account to reflect zero balance owed will, so paying in full or settling work equally well.

      4. I do recommend clearing the debt when that is possible. Settling a debt has a short term drop, with a long term debt to income improvement.

  130. Hi Michael ,
    I hope you can help
    I broke my 2 year lease where I lived a apartment
    gave them a notice that I could pay work on commission
    then I got a letter from the apartment place saying we are suing you for$ 7000
    I tried to make payments with them they gave me the run around
    then got a letter from take notice inc
    a collector we agreed on a payment arrangement every month for 175
    of. July 25 I have the money in the account I get a call from take notice inc
    saying stop playing games you skipped on the payment now you Re being sued see you in court he was very rude and difficult I called back to take notice nv and the apartment community no answer they don’t want to settle for payments

    what do I do ? Please help
    do I file bk 13 or bk 7 ?
    or call a credit specialist please help ASAP?
    thank you . michele

    • Michael Bovee says:

      Michele – Are there other debts than this one that are being paid or that remain unpaid or in collections? If so, what are the different balances owed and who to?

      Please post answers to those questions in a comment reply. My feedback will be more meaningful after that.

  131. Hi, I was served with summon this weekend from Patenaude & Felix APC for a Target cc I fell behind on due to financial hardships. The amount $6204.48 which I am assuming includes late fee, interests, attorney fees, etc. I have 30 days to answer the summons but am terrified to death on what my next steps should be. Should I contact the law firm to settle at an affordable amount? If so, what would be an acceptable offer? I am a stay a home mother of 4 and we live month to month on the one income my husband makes. I would like to settle this matter and would like any advice you can give. Thank you.

    • Michael Bovee says:

      KH – What can you pool together to offer as settlement? My feedback will be more meaningful if I know that answer.

      • Michael, thank you for quick response. I think I can pool about $2500-3000. Would the law firm even consider that amount?

        • Michael Bovee says:

          It is possible to settle at that amount in a lump sum. I think you should call and have a free consult with an experienced debt collection defense attorney about your options first. And then decide the most economical approach to take from there. You could defend the suit successfully for less than it would cost to settle this, or defend in order to get the settlement down to a reasonable amount. Send an email reply to comment email notification you get with the name of your city and I will email back some contact info to an attorney.

  132. Britney Grinnell says:

    I am currently being sued over an $83 medical bill that I did not even know existed until I found it on my own credit report. I tried to call the collections agency to find out what the bill was from and settle it. They did not respond to me so I disputed the debt to the credit reporting agencies, and 2 of the 3 deleted it from my report. Then, last week I was served with a lawsuit! The lawsuit says I cannot send them a check, and online it shows that I have a zero balance. It appears that they wont let me pay until going through the lawsuit. I have a 2 page response prepared for the Judge, informing him of my attempts to reach the collections agency (with my phone bill as proof), the companies failed due diligence to let me know the debt existed, and with the dispute results from the credit reporting agencies.

    My concern is that I have spent months planning to build a house and am planning to put an offer on land in a couple of weeks. If by chance the judge does side against me, my credit score will tank and all of our plans will fall through. It will probably take years before my credit would heal enough to try again, which would be devastating for my family.

    Do you think I have a chance of wining? Or should I do everything I can to get them to settle with me even though it appears that they will not? Currently their attorney fee’s are probably more than the debt itself, and the lawsuit does say I will have to pay their attorney’s fee’s if I loose, so I cant imagine they will be open to settling for the $183 I now owe after interest and court filing …they are going to probably want a lot more than that now.

    All of this over $83 that I didnt even know I owed and honestly tried to get to the bottom of and was met with closed doors…
    Any advice you can provide is greatly appreciated.

    • Britney Grinnell says:

      If it helps- this is Armada Corporation.

      • Michael Bovee says:

        Britney – Paying this collection contingent upon the case being dismissed (get all of this documented in advance of making payment) will put closure to the issue. My problem with the whole thing is:

        You did not know about the debt.
        Had you known you would have paid it and avoided the balance being inflated by the collector.

        You could stand up to this on principal with some time. If your loan is going to go through based on the shape you are in financially and the current view of your credit report, not mush will change if you file the answer to the suit correctly. It could take some time for the case to progress from there. I would suggest you speak with an experienced debt collection defense attorney about that. Are you in Washington?

        You can also look at this in a “pick your battle” perspective. For the time and dollar commitment it would probably not make economic sense to fight the suit. Paying the full amount with costs would be cheaper.

        If you do want to pay this whole thing off and for some reason cannot get them to do this, post an update to this string. I will have some additional feedback.
        If you want to connect with an attorney with the kind of experience you need to defend, send an email back to the comment notification you get with your state and city. I will email contact info back to you.

        • Britney Grinnell says:

          Hi Michael,
          I have decided to swallow my pride and anger at the way they have treated this, and call them. They are willing to settle for $413. They are getting 5x what the original debt was. It can’t be legal for them to choose to sue me for a debt that they made no effort to inform me of, and then to demand such a high amount to get rid of it. Also, he says they wont send me anything about it being dropped if I pay, they will only let me pay and then will send me a statement showing it is paid in full…

          Do you know if this will pop back up on my credit report once I pay it, even though 2 of the agencies deleted it?

          My husband still wants me to file my case with the courts, since I have proof of my attempts to resolve this and their blatant inactivity. But to me, it is not worth potentially paying thousands in their legal fee’s and having a judgement against me on my credit report. I imagine you agree?

          • Michael Bovee says:

            It is really odd to sue someone, accept full payment, and not be prepared to send a agreement outlining who is going to do what and when. I do not care for the implications.
            I do agree that from a pure “dollars and cents” perspective, paying is the correct choice. But base on their unwillingness to document anything as a standard and accepted business practice, I would suggest speaking with an experienced debt defense on the phone first. The type of attorney I am speaking about will not typically charge for the initial consult, and probably already has experience dealing with the attorney collection firm and the Armada Corporation. Let me know the city you live in by replying directly to the email you get with this comment notification. Those all come to me. I will reply with contact info.

            An alternative would be to work with me. I won’t charge anything. But would like to develop an article warning about the firm and Armada Corporation by extension depending on what transpires. Here to, just send an email if you are interested.

            Oh, and I agree with your husband from a personal perspective, but see the wisdom in paying from a professional one.

  133. My husband is being sued by a credit card company since January of 2013 for the amount of $7000 which he has not been able to pay. We have gone to courts asking questions of what we can do to fix this. We have talked to the credit card company people but the refuse to arrange monthly payments that we can pay. They want him to pay the 1st month $1000 as a down payment and then be able to to pay the amount we told them of $200 a month. We don’t have that kind of money to pay $1000. We want to pay what we told them, but they keep saying no. We are worried that they will start pulling money out of our band account. What can we do? We live in California.

  134. 1st they wanted us to pay $2000, now is $1000 and they are pressuring us. We do want to pay them what we owe but we can’t afford to make a big payment of $1000. We have other bills to pay to. How can we reason with them without having to go to an attorney?

    • Michael Bovee says:

      Liseth – With a lawsuit filed back in January, where does your case stand today? Is there a judgment? Who is the plaintiff in the lawsuit, the original creditor or a debt buyer?

      • There is no case date. I know they moved the case date to a different court. The d.ebt buyer is the plaintiff. Mandarich law group LLp

  135. They moved the case to a different court i mean.

    • Michael Bovee says:

      Liseth – Sometimes you can get the agreement you can afford without participating in the court process, other times it can make more sense to participate in the court process in order to:

      1. Get the suit dismissed
      2. Get the debt collector to agree to terms that you can live up to based on cash resources or your monthly budget.

      Depending on the situation it is more economical to fight the case.

      I sent you an email with contact info to an experienced attorney who can assist you. You can call and speak with him at no charge. This will help you get your bearings on what step makes the most sense for you from here.

  136. herbert L says:

    CIT shut off my 2 cards about 2.5-3 years ago when they hit 20,000. I got some letters over the next 6 months then never heard from them again until I got letters from Phillips and Cohen with the debt at 47,000. I have ignored everything What now. I haven’t been sued, but I figure they will wait until it triples then sue me and end up with a judgement way aver the original amount even with 50% off.

    • Michael Bovee says:

      herbert – What is your goal with these accounts? You do not have to wait to be sued. You can get proactive.

  137. herbert L says:

    I will never be able to pay them at all. I owe over 100,000 for school nd another 100,000 yet on my house. If I go bankrupt I will probably lose the 2 small buildings I own along with possibly my house although I am able to pay the mortgage, but little else. If they sue me is there any way I can possibly not have a judgement against me. I hear people say they have been sued and it gets thrown out right away.

    • Michael Bovee says:

      herbert – if they do sue I would highly recommend working with an experienced debt collection defense attorney. It would not be accurate to say people get a lawsuit thrown out right away. Defending a lawsuit is a process and it has risks. Not all defended collection suits end in dismissal or a win.

      Maybe bankruptcy is the better option? Are you underwater on the two small commercial buildings? What does your home comp at? What is the amount you still owe on the home? Does your household earn less than the median income to qualify for chapter 7 in your state?

  138. I am being sued by Cavalry SPV I, LLC. I have never spoken to these individuals. I received a summons today to go to court in a few weeks. The summons states they picked up a debt from Bank of America that I had in 2008 for 2220. I am a student, stay at home mom with no means of income or savings. what will happen when I prove and show this in court.

    • Michael Bovee says:

      toya – Proving you cannot be collected from now does not mean you will not be collectable later. You will end up with a judgment against you. Collectors will wait to collect on a judgment by later garnishing wages (if allowed in your state), levy your bank account, or lien real property.

      Can you think of any conceivable means to settle or set up payments?

      • Thank you for responding.
        No I don not have any means to pay them right now. how can this collection agency sue me and I have never spoken with them conducted any business with them or received a piece of paper from them. I had no idea boa sold my debt. I read that I can get the case dropped if they do not have proper document that they actually are owed the debt or something to that nature. how true is this and if it is true what paperwork do I need to ask them show me that proves I need to pay them money besides the bill of sale.

  139. herbert L says:

    I am in New York state. If they don’t sue me what is the statute of limitations?

  140. My employer was just served with Citation to Discover Assets. Stating they have to submit this info by August 22nd. The law offices handling the case is Steven Finkle in Barrington, IL. I called and left a message at their offices. My question to you is, typically at this point am I still able to set up a payment arrangement with the law firm or is it too late and they are going to proceed with the wage garnishment?

    Thanks in advance

    • Michael Bovee says:

      Michie – Once the garnishment action is started, the best way to get them to agree to something other than the limit they can get by law, is to request a hearing to establish full or partial exemption. Were you given documentation to contact the court and request this type of hearing?

  141. We were served papers from TAB- Tulsa Adjustment bureau from past due medical bills. A Tulsa, Oklahoma collection agency. I contacted the medical center directly, hoping I can settle with them. Unfortunately, once a balance has gone to collections it’s out of their hands. I then contacted TAB and they said they would accept a monthly payment of $250. We are not able to afford such payment. We feel that a settlement offer would be best to get balance lowered. We are approved for a loan for the initial balance 1,300 but with additional fees it’s goes up to 2,000. It would be difficult to pay for a 1,300 loan as we are barly making ends meet. I don’t know where to start, I was thinking $700- 800 but have heard that TAB is pretty ruthless. I don’t know if they would even consider 60% or 75% . What should be my starting offer and what would be a good final offer. I would appreciate your advice, thank you.

    • Michael Bovee says:

      Sally – How long has the debt gone unpaid? Do you know approximately how long Tulsa Adjustment Bureau has had the account placed with them for collection? What type of medical bill is this?

      • Michael, Thanks for quick response.
        It’s multiple balance from two different regional medical lab centers (I’m guessing where they do blood work). I have ongoing dr. visits and medical bills that I lose track of so many coming in at once and end up going to collections. The papers they served me with show balances starting from 2010 to 2012. My 30-35 days are coming to an end so I sent a settlement offer of $800 but denied. I’m hoping they accept 1,000. I really don’t know where to go from here. If we don’t come up with a settlement, they will most likely garnish $500 monthly from paycheck which I definitely don’t want. TAB’s is Ruthless, I say Ruthless.

        • Michael Bovee says:

          Sally – Please post an update if you are not able to get them to accept the 1k. I will have some additional feedback.

          As far as garnishments go after a judgment, there are ways you can qualify to be partially or fully exempt. It will depend on a full picture of your personal finances. But that is a bridge to cross later (hopefully completely unnecessary).

          • Will do Michael. I’m hoping to hear something before the end of the week. I’m thankful to have found this site and for your service. I figure this would take time away from your friends and family, so even if I dont know you, I know your a wonderful caring person.

            • Bad news, they denied our 1k offer. They want full balance plus court fees and their cost. I heard this collection agency is one of the toughest to work with since they don’t settle for less. I’m frustrated and PO with them. I should say there is a positive, my husband was able to get the loan upped to the full balance of 2k. The payments would be much lower than if we would have done monthly payment with TABs. I feel this may be the best way to settle since we dont have much of a choice. The only way to make this go away and not cause more stress in our life’s is to pay. Its going to be tough but hoping we can make it work for 6-7 months until Tax return.

              • Michael Bovee says:

                Sally – I would still look to get whatever savings you can. In the nearly 20 years I have been working in this field, it has been the rarest of instances where some form of reduction is just simply off the table. The savings may be as little as 20%, but a savings nonetheless. When I do see complete stubbornness it has mostly been with small local collectors and with regional credit unions.

                • They didn’t accept our offer of 1,500. They would not accept anything lower. In the future, I will do my best to prevent this from happening again.

                  I’m now dealing with a whole other issue, would you know anything about property land, deed, tax, etc., or where to go ask questions. We were served with papers again this weekend. But this is about unpaid taxes of old family land in Texas. We have a lot of unanswered questions but hope to find out what’s is happening. It’s a big mess and we don’t know if we’re able to do anything about it which would be horrible. I thought we were coming to an end with our problems but then this occurred and here we go again. I feel this might be the worst since it involves family, land, and money. If your not able to give advice on this matter would you direct me to the right place. I do feel eventually we have to hire a lawyer to fight this case in Texas but just want to be prepared. Thanks…

                  • Michael Bovee says:

                    Sally – That is unfortunate, but a reality in some of these types of collections. On the Texas property – I sent you contact info for a great consumer law attorney, but the issue may not be in her area of practice. I would suggest calling in and consulting. At a minimum you can ask for a referral.

  142. Sorry, for the confusion. The collection balance is 1,300 but with additional fees it goes up to 2,000.
    We are approved for a 1,300 loan but really can’t afford the payments. I was hoping to bring 1,300 balance lower and include all additional fees.
    Thanks again.

  143. Mr.Bovee, I am being sued by J.A. Cambece Law Office for 2,000 $. I read that in Massachusetts, if you make only 170.00 or less a week, you are exempt from Garnishment of Wages and your case is droped. Is that true?

    • Michael Bovee says:

      James – You definitely can look to qualify for exemptions from garnishment in Massachusetts if your income qualifies. I am not aware of your exemption from garnishment qualifying your to have the case dropped. The case could proceed to judgment and you may become collectable later.

      It is far better to look at ways to deal with the collection and prevent the judgment if at all possible. This way you avoid the amount growing from judgment interest, and the fact that a judgment will likely show on your credit report.

  144. Hi Michael and others.

    I have been reading with interest this thread, and my wife and I have been given papers by a person who came to the door. I wasn’t surprised. It’s Capital One Bank and a Plaintiff attorney locally in my state, and filed in my court. We have 21 days to respond to the court in the county, or the guy underlined the local attorney’s telephone number.

    I have been unemployed for a long time, and have 70,000 dollars debt, and about 700 dollars in debt to hospital services. I am hoping to get full-employment soon, have good credentials with B.S degrees, expired teaching certificates… But the last three interviews have cost me 500 dollars in gasoline costs to go the interviews. Seems like everything is against us. I remember “Never, never, never give up.” and without these W. Churchills words would have succombed weeks ago.

    I have a debt relief company that I believe is good, but I am not 100% sure. It is ACCS. There is also one my late dad’s attorney told me about, whcih I would say I beleive is 100% good, but they don’t negotiate down like ACCS does.

    I am not worried about my credit, it was good, it isn’t anymore. But I know I want to pay the debt. I had help with property taxes but want to pay more. I sold something that will bring me a few thousand, but that isn’t going to help much for the debt. I need to have about 1000 dollars a month to consolidate the debt. But now with the papers now served, I am in trouble, or at least it’s more complicated!

    On top of that, my dad had debt, I had the sole responsibility to bury him. My sister out-of-state did not come to my mom or dad’s funerals, and our parents were divorced years ago.

    Now I may be able to get help from my step-father’s estate. He lived in Florida. He remarried three months afterward in April 2007. He passed away this week. His new wife is 89, has some nose cancer, is a very nice lady, who we met after they got married. She wants me to come down there, and said she would pay my way and even help me a bit. Now they moved into a senior housing facility that had all kinds of service. My step-father had emphysema and required special care for almost 3 or 4 months. He came back to his apartment, and I talked to him just 2 weeks ago, but he was really out of breath. He went into the hospice center a week ago where he went peacefully Tuesday night.

    What may be a help, but NO guarantees at all, is what he told my sister. He said that our mom, who he was married to for 38 years was a real asset to him. He was a travelogue person, showing movies around the states, learned from WWII when he was chief photographer for the army. My sister said he was going to put money into an annuity and be for my sister and myself. Since my step-father never told me this I don’t know. I do know that he had a bit of money and then he sold his home and his new wife sold their home and then moved to the senior housing about 50 miles from their old home. My step-father’s new wife has no children, but I believe she sold her home to her niece.

    Anyway, that is where I am at. I have a call into ACCS to call me back, but now that one suit has been started I don’t know if they can help? And I am confused. We are both close to minimum retirement age, in fact my wife started collecting SS, but it’s very low amount.

    • Michael Bovee says:

      BobIT – Is the ACCS you are talking with the nonprofit credit counseling agency, or a debt settlement company?

      Before enrolling in any repayment plan, or looking at a debt settlement plan, I would encourage you to speak with a bankruptcy attorney. With the limited income situation you have, working with the realities of being sued, and the size of your total debts, you may find chapter 7 would offer the quickest and least expensive course to resolving your debts. Have you consulted with a bankruptcy attorney already? Are there any reasons you would try to avoid bankruptcy?

      • Michael, ACCS is American Credit Card Solutions, and it is a debt settlement company.

        I am planning on talking to an attorney. The one that was my dad’s attorney and helped me with his estate, may be my cheapest bet. I could give my county legal aid a call, but I have a good rapport with my dad’s attorney, even if I need to spend a little bit of money.

        I don’t know the bankruptcy numbers. I am kind of scared of bankruptcy. I have been keeping current with house payments, and that is my concern is my home.

        I am getting really close to getting some meaningful full-time employment, and I do worry about a monthly payment to a debt settlement company.

        Thanks.

        • Michael Bovee says:

          Thanks. My quick search for American Credit Card Solutions leads me to my opinion that they are an affiliate for some other debt settlement company because all they have is a landing page and form fill for leads on the home page of their website. This type of set up means you are being signed up into something by one place who wants a commission, and then passed onto someone else for the actual service.

          Do talk with your dads attorney. If he does not practice bankruptcy he will refer you to someone nearby who does.

          All states have property exemptions in chapter 7 bankruptcy. You can still keep your payments up on the home and keep it depending on those exemptions and your equity. If you learn something in the bankruptcy consultation that suggests you still try to avoid it, come back and update this comment thread and lets go from there.

          • Thanks Michael, will do. I will call my attorney tomorrow. He does have a peer in bankruptcy. But I still have some creditors on my dad’s account, and my dad left some debt. But I paid for his funeral, plus took about 3 months to clean out his home. He was a smart man, but he bet on the stock market, too much after the dot com crash. I couldn’t stop him from losing. Thanks. Will update.

            • Michael, I had a talk with the bankruptcy attorney my dad’s attorney recommended. After mentioning my debts, and income, he said that Chapter 7 Bankruptcy wouldn’t save us. We would get a very small amount and the house would be sold, and not favorable to us.

              He didn’t seem to think debt consolidation would work, we don’t have income coming in to do this. I think he thought if I could get a 100,000 dollar job I could make it. I think I could do it with much less, but that is just my opinion. There is GreenPath (in Michigan) and the lawyer even said they were reputable. Nobody I talked to can tell me about ACCS. BUT, the lawyer told me, that when you make deals with the credit card company, IRS rules would more than likely consider any savings as taxable income, so I would be increasing the amount of money I would have to report and probably have to pay more.

              I mentioned a reverse-mortgage and the attorney thought that it was worth checking, couldn’t offer any info on, but said to check it out, but to also think of selling to get a better deal if it doesn’t. Now I want to do what I can to save the home, but know that may not happen.

              The problem with the reverse-mortgage is the homeowner has to be 62. Now this is possibly a ‘Catch-22′. My wife’s name isn’t on the deed right now, though she has Dower Rights. He said I shouldn’t try to change it to both of us, as that could be construed an attempt to fraudulently take advantage. I can see his point. BUT to do a reverse-mortgage, my wife is 62, the minimum age to do this. I won’t be 62 until next April! So if we could get the money to pay off the ‘Home Equity Line of Credit’ and the credit card loans, then perhaps this could work. Our home may possibly qualify for more than the amount we owe on the ‘line of credit’ and the credit card we owe.

              AND, I got a letter from Sams Discover that they are willing to allow me to pay just 70% of what I owe them about 10,000 dollars. And I believe I have had similar offers from others, though the stickler is Capital One!

              So I am looking at reverse mortgage and the fact that we have a small bit of cash that will allow us to live for a few months, with the hope I become fully-employed.

              This may be a long-shot but I am determined to try and keep us here. It’s been a tough battle for me, and I fought one tough battle 25 years ago, my life, with Ulcerative Colitis, and almost died, but believed I could fight this, and I did. Now I just need the will to be able to fight this and win. It’s a very hard struggle, but I just hope that it is possible.

              • Michael Bovee says:

                Thanks for the follow up details.

                Neither Green Path nor any other nonprofit credit counseling agency is going to be much help to you unless you can afford to pay between 1.7 and 2.5 of your combined credit card balances monthly. For example: 70k total balances. 1.7% of that as your new monthly payment would be 1190.00; 2.5% of that 70k as a new lower payment each month would be 1750.00; or anywhere in between. You should not embrace one of these plans unless you have a stable income. They may not be of any use with the Capital One account you are being sued on.

                If you want to get counseling on the reverse mortgage Green Path may offer that. Many non profits do. But a debt management plan, not so good with your situation.

                The offer from Discover for 70% of what you owe is not great. You can often do better. Other offers you get may be great, but an offer is only as good as your ability to fund it. Without the resources to fund settlements you are stuck. Not a great place to be, but you are not on fire.

                Tell you what, lets connect on the phone and give me a chance to make sense of the situation and how you can navigate from here. It may be best to do nothing other than deal with the Capital One lawsuit until you can cross into the reverse mortgage. Send an email reply to the comment notification you get (those all come to me). I will connect with you off of the website for a time to speak that works for both of us.

                • I got my forms at the courthouse on Thursday and will look at them Sunday and be back here.

                  • Hi Michael & all,

                    I talked with a Legal Aid lawyer, nice lady on the phone Monday. I think she gave me better advice then the lawyer (man) I talked with late last week. She also sent me three attachments and said the forms she sent are adequate to fill out and give to the Court. So I guess I will be filling out two for myself and two for my wife, though they will undoubtedly be the same, with one of mine and one of my wife’s being sent to the attorney. I am going to read these this afternoon, but bear with me, I also have some client work (yeah!!) to do to. I don’t understand a lot of this legal stuff.

                    QUESTION: Should I upload a copy of the document the Court requires, and if so how?

                    • Michael Bovee says:

                      BobIT – I do not have anything set up on the site for uploading documents. You can post your questions in this comment string for feedback.

                    • Okay, of the three documents I received, one goes into bankruptcy, and letters to send to harassing phone calls to tell them to stop. And the only Bankruptcy I would entail would be Chapter 13, but I would have to have a good paying job for this.

                      A second document is a form for a ‘Motion for Installment Payments, which I find interesting and may want to consider. I was told I could possibly offer low payments such as 25 dollars for month, for instance. There are instructions for this.

                      Then the third document is the confusing one to me, and what they gave me at the courthouse, except theirs is with the carbon copies. The Legal-Aid lawyer told me to use her documents instead. Then I can bring the documents to the Courthouse. I assume I will make four copies of each, (4×2) since my wife will have a duplicate answer. The Court takes one, another gets stamped to send to the Plaintiff which I will do, another copy gets stamped and given back to me, and I just want one more copy to have myself as an extra.

                      Now the confusing part I have is the meaning of the questions, which all state the same thing?

                      They go from 1 to 29 (Legal-Aid document I think has an error and I have emailed the lawyer about this, so she may resend the corrected copy).

                      The questions basically say the same thing.

                      1. agree with the statements in paragraph 1
                      disagree with the statements in paragraph 1
                      do not know if the statements in paragraph 1 are true.

                      2. agree with the statements in paragraph 2

                      This confuses me, because I’m not sure what the paragraphs are?

                      The Legal-Aid lawyer also had a page of Affirmative Defenses 1-18, which the county clerk did not give me at the courthouse. On this page the defendent is to check all that apply, starting with 1. This is not my debt, 2. I paid this debt in full (satisfied), 3. The plaintiff may not seek damages …

                      Now, the lady lawyer (Legal-Aid) said that I can mention that they ‘Failed to attach document, because all the gave me was a photocopy of the Capital One agreement and there is nothing that we signed in the ‘Summons & Complaint’. She said something about a Technical Defense.

                      I know I am going to call back to Legal-Aid, but not today. I will call back either tomorrow or Friday. It takes at least 30 minutes to get connected, which is very understandable with the services they offer. The man lawyer I talked to will require 1000 dollar retainer before he will work on the case. The Legal-Aid is free or very cheap.

                      The way the lady Legal-Aid lawyer told me is that I should get the documents to the courthouse as soon as I can, and that a pretrial would be held. So that would mean going to court. But I don’t know if my local Legal-Aid office is going to be there. You see the lady lawyer is 40 miles away in a different county. It would be a lawyer that is in the same town I am being sued at, just 15 miles away from me, which is where the courthouse is.

  145. Hi Michael,

    Great page! Wow!
    Two things for now:

    1. I’m settling with an Amex, represented through Michaels and Assoc, for 50% on the dollar on the amount due. They got a default judgement and I had never been served. Was going to get it set aside, but considering the validity of the underlying debt, and that I have real estate assets, that seemed like a time-wasting wild goose chase. I’d hoped to get better that 50%–and I have seen others online have done so–but not my luck. — > Now, their settlement letter did not include any language agreeing to report the debt as resolved to all credit agencies. Do you know of what the most thorough boilderplate language would be for that, or where I can find that? It needs to be included, or I can’t sign the agreement.

    2. Nelson and Kennard are coming after me for a Barclay’s debt of approx $11,400, and they’re only offering me $9,900. How do I get them down? Given I have real estate assets, they’re after me. But I don’t really have cash on hand. They also have filed with the courts, and there is an upcoming hearing date end of August, but again, I actually have not been served, and found out about the filing in a round-about way. The court records do not show my having been served either. Therefore, I’m wondering whether there’s any way to use that to my benefit in the process of getting them to accept 40 or 50%. Any tips on getting to that payoff amount. I cannot do the $9,900.. I’d rather have that go to judgement or something. I cannot pay it.

    Any assistance, pointers, point in the right direction, greatly appreciated! Again, great page. Wow.

    JEL

    • Michael Bovee says:

      JEL – Settling an American Express account for less than 50% is more often done (when it is done), if there is no lawsuit filed, and no judgment. 50% is actually a pretty good settlement with AMEX on a judgment.

      The language you are looking for in the settlement does not happen. Here is what can happen. You pay the settlement; Amex updates the account with zero balance owed on their regular trade line with the credit reporting agencies; the attorney for AMEX files a satisfaction of judgment with the court and that gets reflected on your credit report within a month or two.

      The attorney has nothing to do with the credit reporting of either item. Amex will have to show the original account paid to zero. If they don’t it is simple to dispute and provide your documentation that they agreed to the settlement and you now owe zero. The court judgment is a matter of court record. The best you can do is get the satisfaction of judgment filed. If you get the attorney to change any verbiage, it would be to state that they will follow through on the satisfaction.

      On the Barclay account in the courts – Is Barclay listed as the plaintiff, or is there another name there? I want to know whether you are being sued by a debt buyer before offering feedback on this account.

      • On the Barclay account, the court case name is “Barclays Bank Delaware v. [My Name) et. al.”
        Also, in addition to the fact that I never received service, but rather found out about the case in a round-about manner, I also notice when I was reviewing the court docs that the Case management conf. that was set with the court has a date at the end of August 2014, which is probably an error that should have read 2013.
        So my questions are , how to negotiate down to sub 50%, in a pre-judgment scenario, and whether to exploit the lack of service issue, and /or the likely date which may or may not be chalked up to being a technicality (unless it was not inadvertant). But these last 2 points are secondary to the first, I suppose.

        Also–as a side note–I’ve come across a law firm, fullman firm dot com, that advertises their representation of credit card debt holders to reasonable success. Any experience with them?

        Thank you So much!

        JEL

        • One more thing–Nelson and Kennard keep calling me, and not having acknowledged on the phone their having filed suit offered to consider my (dire) financial circumstance in relation to my request for a better settlement than $9900, if I will complete the financial statement they have then faxed me. That seems like a trap they might be setting to use my self reported info against me in a court proceeding? Should try and go that route and show them the poor state of my finances? Will they really that that into consideration?

          Thank you

          • Michael Bovee says:

            JEL – Any information you provide will absolutely be used to determine how much, if any, that Nelson and Kennard will settle the Barclay’s account. You bet there are times that can play in your favor, but after rereading your comments on this page, if it were me, I would indeed connect with the Fullman firm to talk about how to best proceed. I do not know them other than by reputation. You should also talk about the lack of service.

            As far as how to negotiate and settle at this stage for less than 50% – I often see debt collectors become a little more pliable when and answer to the complaint is filed, and especially if you are represented by a skilled collection defense attorney. That is not always the case, but much more often than not.

  146. Michael, I just got a summons in the mail on Saturday. It is from Barclays bank Delaware for 8600.00. I haven’t paid in over a year. My husband and I both work but it got to the point of paying mortgage and other bills or this high credit card. I have no extra cash to make a settleent on this but would prefer to make a pay arrangement if not to late (rather then have my husbands wages garnished, I’ve heard if this happens they could take up to 25% of each check..we would for sure lose our home if this happened). We have discussed bankruptcy also but not sure since this is our biggest debt not including our mortgage at this point. Have 2 other cards one about 3500 that I have a temporary pay agreement and another for about 1000 that we also have not paid for a year. These debts are ours and since I know I owe them would prefer to pay…but at this point I am sooo scared of this lawsuit and what could happen… please advice.. you seem to know a lot from reading other posts. I live in Ohio.

    • Michael Bovee says:

      lisa – is Barclay bank named as the plaintiff in the suit, or is there another company name there? If another name, who? My feedback will be a bit different if a debt buyer is suing you.

      • Michael, Barclay is named as the plaintiff.

        • Michael Bovee says:

          Thanks. If the total debt that would be included in the bankruptcy is roughly 12k, I don’t necessarily like bankruptcy as an alternative either. National average cost of chapter 7 is about 1800.00. Lets say your cost is 1500.00. Now you are filing over 10.5k of debt. The tough part is that you are dealing with a lawsuit on the largest balance. Ideally you would want to try to settle this upfront, but I doubt you could settle for less than 50%, and probably a bit higher. If you can think of any resources to tap to reach a settlement, that would be great. If no sizable resources can be pooled together, entering into a payment arrangement makes sense. Just be prepared for them to only do that with a consent to judgment. This would require you to make all agreed payments on time all the time, but would prevent garnishment or bank levy as long as your payments are maintained.

          If you do end up in a scenario where somethings just gotta give (like a garnishment or a bank account levy – or you just cannot swing a payment), look to chapter 7 to put an end to all of the collections, including any lawsuit or prearranged payments with accounts in or out of the courts.

  147. I would love to get some info on being sued in a state where you don’t live. I am close to the point where I stop paying my credit cards and wait out the 5-6 month to try to get a settlement. The total credit debt is 100K (some business cards some personal). We have moved a lot for work reasons so we were in Tennessee, then Oregon, then most recently California for the last 1.5 years. Now we just moved back to Tennessee a month ago. If I get sued, could there be complications about what state the lawsuit comes from? Is that an advantage or disadvantage that we moved back to Tennessee? Thanks for any info you can share!

    • Also, if you could please add your thoughts on how the business cards and personal cards negotiation process differs… Thanks.

      • Michael Bovee says:

        Mary – There is not much difference to negotiating business credit card debt compared to personal credit cards. Most small businesses personally guarantee business LOC’s (lines of credit) and credit cards. Can you tell me if some of the business debt is exclusive to the business? Are there LOC’s? Charge off can happen at 120 days on some of the business accounts. Depending on the balance size and the bank, negotiating business debt is a bit more of an involved process. Whether or not the business is a going concern can also matter to some creditors. I would need more details on the accounts to offer more meaningful feedback.

        There really is not much benefit to being in Tennessee vs Oregon or California when it comes to negotiating and settling. There are differences in statute of limitations to use the courts to collect from state to state, but if you are going to use an aggressive strategy to settling, you should be able to avoid the concern of being sued all together.

        Have you updated all of your contact details with the banks to reflect your current address, phone etc?

  148. Hi Michael,

    Let me start by saying that your blog is very, very informative and thank you for taking the time to help people in need!

    I have about $147k in cc debt from a failed real estate buisiness, along with two properties in foreclosure. The only perceived “asset” I have is a couple other inverstment properties which are current on their mortgage but underwater and have no current equity.

    I live in Florida. Last payment on these debts May 2010. I have been sued once which I settled, and I have two new lawsuits which seemed to have been triggered by the mortgage taken out for the investment properties. The loan is with a private party at a high interest rate, because of course no bank would give me a loan now. One lawsuit is a minimal amount which I can get a loan to either pay off or settle. The other is a large debt and that is the one I am concerned about. I don’t have the money to pay it, but maybe I can ask my parents, but only if I am able to settle it for less as I definately can’t get $25k.

    Original creditor Chase. People suing me Thunderbolt Holdings LLC. Debt $25k

    The odd thing is just before I found out about this lawsuit, Chase sent me a 1099-c cancellation of debt. however this was for the business cc I had with them. So they forgave the one debt and are suing on the other.

    My questions are where I should start with a settlement offer to this Thunderbolt Holdings. Should I try to defend the debt? My second question would be does settling debt put you back on the radar for other creditors? I am trying to wait out my SOL and I have 9 months to go. could settling open flood gates for others to sue?

    I am also about to shortsale one of my properties in foreclosure and I may have reached a settlement agreement with the other ( I will have to take on a loan for this as I have no money but do have access to people who will offer high interest secured loans) . I am just wondering if any or all of these events could trigger more lawsuits. I could try to defend this lawsuit and possibly draw it out past 9 months, but I will definately have short sold the home by then and settled the other property.

    Just wondering your experience on any or all of this. Thanks again.

    • Michael Bovee says:

      It is not all that odd for Chase to treat multiple accounts with the same customer differently.

      Due to the amount at issue, and the fact that you are being sued by a debt buyer, I would suggest you defend against the suit in order to:

      Settle the case at the best rate of savings.
      Defend it to the point of dismissal.

      Settling a debt this far along in default, and with other collectors out there with less than a year on the SOL, could indeed cause them to be more aggressive. Is Thunderbolt Holding showing on your credit report right now? If they are, defending the suit makes sense from that perspective. Compare the costs of settling for say 10 to 15k with what it would cost to retain an experienced collection defense attorney. You should find defending the suit the more economical path.

      Send an email back to the same address you get this comment notification from with the city you live in. I can reply with contact info for the type of attorney you will want to speak with.

  149. Hi – I’m unemployed, and receive WIC from the government for our baby. My husband has a FT job (making $30k/yr) as well as a PT job making $9.50/hr, working 25 hrs/wk. We have no savings and only have enough money each month to cover rent, utilities, gas for our cars (which have been paid off for some time now) and food that WIC doesn’t cover. We are behind on all of our credit card payments and are in serious debt.

    Yesterday we received a letter from his Discover card stating that they will take legal action against us if he doesn’t call them by the end of September. He’s going to call them, but here’s the problem; we literally live hand to mouth with no extra money whatsoever. It’s a stretch to pay our basics. I’ve been selling things on eBay to try to help, making things and selling them in an Etsy shop but it’s just not enough.

    I’m so stressed that I can’t eat or sleep. There are times that I don’t eat (much) just so that my kids can eat (we have 3 kids….our 3rd was our unexpected blessing that became the reason I don’t work….we couldn’t afford to have 2 littles in daycare).

    What would you suggest? Will it matter to them that we are on government assistance? Thanks, in advance, for your help.

    • Michael Bovee says:

      kristen – When it comes to collections, the system for how accounts that fall past due are handled, is systematic and not individualized. Can you talk with an understanding person at the bank? Yes. Will that person be able to affect how your account gets dropped into what is a fairly systematic collection pipeline? Not likely.

      I have some additional feedback to offer, but first would like to know the total amount of debt you have out there (whether late or current with payments). Post that detail in a comment and lets go from there.

  150. Hi There, I am a Canadian citizen and have credit card debt from when I was a student in US and a few years after I got back to Canada. I can’t pay even the minimum payments anymore. I have nothing in US but an empty bank account and a Po box address. While they don’t have my address in Canada, they do have my phone number. What can credit card companies do if I stop making payments? What choices do I have? I appreciate your help, I am desperate.

    • The Debt is about $50,000 among 4 cards. Min Payments $1000, have to travel to US to pay every month. Stopped paying in July.

      • Michael Bovee says:

        Bernard – What is your current ability to pay, or to save up money every month if you are not paying – in order to settle the credit card balances for a reduced balance?

        • It will be a lot more manageable if I can pay only $500 a month. But I really hope more of it would go towards the principal so I can actually reducing the debt rather than just keeping CC Companies happy. Can the US credit card company hurt my credit in Canada? Will $12-$15k be worth it to them to sue me in Canada? Thanks.

  151. Hi, I have paid a debt from a cc and now I have had 3 different lawfirms and collection firms calling , they all have been rude, stating I am going to be arrested if I do not pay on the debt, also stated they were going to garnish my wages, and debit card, and put a lien on my home, now the delimema is that I have paid the debt and have faxed it to 2 different law firms , one I had given $50. Over the phone because of the threats , then I found the paid off debt and faxed it to them, and asked for my $50. Back and they never refunded it, after they said they would, the said it could take up to 90 days to get my Money put back into my debit card , my bank says it never was refunded and the phone number that took it out is not a working number, also the company does not answer my calls or return my calls that I’ve left them messages with no response, then today another agency called and once again I faxed the copy of my account closed , I then received a phone all an hour after my fax from a “real lawyer ” that’s what he said ,attorney Rossi he said even though I paid I still owed him lawyer fees and court fees, and other fees that were $795. But it would be around $1200. If they brought me to court, I told him I was never called or mailed anything about extra fees , so he said he w going to bring me to court for his fees and other fees, he was going to garnish my wages, debit card and possibly put a lien on my home that I have a mortgage on, how an he say I owe him fees when I was told the debt was paid and there is a zero balance? Frustrated in mass, I thought I had this all resolved , when does it end, do I need to o to court for documentation, what do I need to do to stop this, this was a judgement but I thought it was resolved

    • Michael Bovee says:

      Nancy – It is quite likely you are being targeted by a scam. Legitimate debt collection attorneys do not make calls threatening that stuff. There is a rash of what you described happening to people with real debt issues, but the contact is not from legitimated collectors. Do not take any of the threats seriously at this point. You should consider disputing the 50.00 charge on your debit card with your bank. I would encourage you to file a complaint with your attorney general and with the CFPB. I would suggest you talk with an experienced FDCPA attorney about your situation in order to identify any real issues you may have with these collectors.

  152. Nelson and Kennard…. JEL – I edited this post out and responding to the same thing you typed in your comments above. You should get email notification of my feedback as soon as I post it. Not sure how I missed seeing them before now, but apologies for not responding sooner.

  153. If we owe hospital debt and are sued can we negotiate with them? It is 7,000$ and I know we owe it I am not disputing that I just haven’t had the money available to pay them, will places usually take payment plans?

    • Michael Bovee says:

      Kim – Most medical services offer payment options. The medical billing companies and the debt collectors they may hire often agree to reasonable payment terms. But now that you are being sued, the situation changes a bit. If all you can do is monthly payments than it is what it is, but you need to be prepared for them to ask you to sign off on a consent, or stipulation to judgement. That is not the best option, but it is an option, and can help you avoid any lien, bank account levy, or garnishment.

  154. I’m going in to a Legal Aid lawyer to discuss my case, (search BobIT for my earlier posts). I am so glad, as the forms are confusing to me. The lady in nearby town, where the suit is filed will help me. Then I can turn it in. They have told me that the courts usually will try to get both parties to work out something, even if it’s only 25 dollars a month, which they say they can’t not accept if that’s all you can afford, at the present time. Feel better, but not out of the woods by any means. I keep trying to be optimistic, and really do want to resolve this. I have paid off my Ebay account, and now again can try to sell things through them. They had suspended my account.

    • Michael Bovee says:

      BobIT – I am terribly sorry to have missed your prior post. I was logging in only sporadically while traveling. I have now read the prior post.

      I am glad you will work with the legal aid lawyer. Court documents come with some challenges. Working with an attorney is ideal. Please do not let another comment go that long without a bump, or just call me. You have my direct phone number in the signature reply of our prior off line exchange.

    • Hi all, I haven’t been on in a while, and I keep the name BobIT, so to see all my posts, search on that name.

      I will add more, but I wanted to let all know that I retained a LegalAid lawyer, and my wife and my pretrial has been set for Oct 3. CapitalOne has made three settlement offers on our approx. 18,000 dollar balance. 1) 15,300 (2000 + discount) with 3 payments of 5079 for three consecutive months. 2) $500 down, followed by 12 monthly payments of 1450 dollars, with no interest to accrue & 3) 36 monthly payments of abt 500 dollars with interest accruing according to MCL 600.6013 (whatever that is?). The lawyer said to take some time to think of these, and I am presently unable to do any of these for any length presently. She did say, “We can also try and come up with a counter-offer to propose as part of a settlement negotiations. (And that may be best for us.)

      Note I am still trying to find a full-time job, I have the skills and education, and I have tried hard, but I think I am trying even harder, with my “Never, never, never give up philosophy as most recently stated by Diane Nyad, who just swam 110 miles from Cuba to Florida at the young age of 64!

      So that is how it stands, I am going to have to call or email my lawyer tomorrow or Wednesday at the latest, so she has time before the pretrial hearing.

      My nerves are calm at the moment, I am just going day by day, but I am concerned. My faith in myself and my abilities is high, I just believe that we can do something.

      Oh, by the way, I think I mentioned ‘Reverse Mortage’ as a possibility, but here is what I have learned at present, and I will have to find out more. My wife is 62, but I won’t be 62 until April of 2014. It was advised that WE both should be on the Reverse Mortgage as if only one is, if that person dies, then the terms of the Reverse Mortgage are executed in a years time. So I at least want to be counseled, by Green Path (Michigan Debt Relief and reliable) but think I should wait until less than 6 months until my 62nd birthday. Counseling is required and I heard that the certificate you get from attending the counseling is good for 6 months. THIS doesn’t mean we would do a reverse mortgage, but it is a possibility that could help us save our home!

  155. Christian says:

    Hello,
    My old roommates advise me someone was looking for me. So i went online and it was captial one which I had a recent debt with them about 2 years. I couldnt pay them due to being in the hospitalized and unemployed. Anyhow Im worried about a judgement since Im already paying 25% to child support and what I read online that since my incomes already at 25% with child support other debts will have to wait next in line kind of thing but anyhow, I want to pay them back but do i contact the law firm or the original creditor

    • Michael Bovee says:

      Christian, Capital One contracted collection of your debt out. You will need to contact the debt collector, in this case an attorney, to negotiate a payment or lower pay off.

  156. Help! My mom was served with MY ppwk. Is that even legal? I don’t even live in her home, not the same county yet I’m being sued by Midland Funding LLC. I’m in CA and its in the amount of $1,199. My vehicle was recently repossessed and I literally started a permanent job today, barely. I was unemployed for over a year. I can’t take time off this new job to deal with this. What should I do? The original creditor is Citibank. This is an OLD student credit card from 14 years ago. I stopped being able to pay it well over two years ago. Help please.

    • Michael Bovee says:

      Linda – Because you reside in a different county than where you are being sued, if you file a formal response to the lawsuit laying out that fact, it would generally result in the suit being dropped. But that leaves them to file in the correct county. It is a good idea to work with an experienced attorney of your own on this type of thing. My concern for you is the economy of spending money on that with a balance this low. Only to have to spend more if the suit gets refiled in your county.

      If you have the ability to settle this with a lump sum of money, that would be my first suggestion. Is that possible?

  157. Hi..
    I want a lil calrifiation on how to handle this suit brought against me by PRA assignee HSBC BAnk Nevada. I reside in GA and was served Saturday in accordance to the applicable SOL and serving process so no issues there but when I did a lil research of the debt itself it gets hairy. I pulled up my credit report and I had a debt with Capitol One not HSBC. I am aware Capitol One purchaed HSBC not vice versa so not sure why the debt is stating an acct with HSBC. The account number is incorrect along with the dates account opened, last payment and 1st deliquent date. Most importantly the charge off amount for Capitol One was considerably lower than the amout this HSBC acct states I owe. I am beginning to think this acount does not belong to me even though the Capitol One account states it was sold.

    I am definetly going to respond to the claim but wondering if because all the information is incorrect than what is stated on my credit report if I can use that as a basis in my answer of not having ever acquired the debt since they would not be able to show any proof af any agreeement between myself and HSBC.

    Possible answers:
    Admit. Defendant admits to residing at address
    Denied. Defendant denies entering into a cc agreement with plaintiff.
    Denied. Defendant denies breach of an agreement as defendant never entered into an agreement with plaintiff.
    Denied. Defendant applies answer in para #2
    Denied. Defendant aplies answer in para #2
    Denied. Defendant denies laibility as no agreement was entered between the plaintiff and defendant for said amount in claim.

    Any help is needed as I am eager to answer this claim but dont want to expand too much whereas PRA would have to provide documentation as proof of my entering in this agreement with HSBC.

    Thanks!

    • Michael Bovee says:

      Sasha – How much are you being sued for?

      • HSBC is suing me for $807 but Capitol One, which I had the cc, was charged off at $497. I never had a high limit with Capitol One for $800 anything which is why I think the debt is not mine.

        • Michael Bovee says:

          Thanks for the follow up. With that amount at stake it would not make sense to hire an attorney, but that is generally my best suggestion when defending against collection lawsuits. I cannot offer you legal advice from Idaho.

          It is possible for an unpaid balance of 497.00 to balloon to 800 rather quickly. Late payment penalties, default interest rates, and potential over limit fees can cause a small balance to double inside of 6 months. But the account number being wrong is a huge concern. But if this is the result of a sloppy filing and not mistaken identity (suing you for a debt that is not yours), they can sometimes amend their sloppy work with approval from the court.

          • Its not just the acct number..its the wrong bank, wrong dates, etc. How can I verify if this is the debt before I answer? I have read of others requiring PRA to provide proof in the answer yet denying debt owed so the burden will be on them to prove it is mine.

            • Michael Bovee says:

              You would generally have to answer the lawsuit first with your affirmative defenses (not your debt etc), then follow that up with discovery requests relating to all of the wrong information.

              I do know of an experienced debt defense attorney you can consult with. The consult is free, and you would probably get a good bead on where you are going from here by having that conversation. Want me to email the contact info to you?

  158. I just got served a lawsuit from a debt buyer on original debt of $267.34 that they have interest tacked onto making the total $454.67. Date of first delinquency on this debt according to Equifax was Sept 2010. I am in Colorado and have found conflicting information on the SOL for collecting. Some sites say 3 years, others say 6 years. I am assuming that either way they are within the SOL since they filed in September, but I am shocked that for such a small amount they have gone this route. Is it best to answer and hope they don’t have detail to back it up? or, Would it be most cost effective to call them and negotiate and pay?

    • Michael Bovee says:

      Diana – It is surprising to see lawsuits for such small amounts. I started to see this happen with more frequency a few years ago.

      If it were me I would make a phone call to negotiate a settlement. And for the precise reason you mentioned – settling being the most cost effective. Otherwise you have to ask yourself what your time is worth? It would not be cost effective to hire an attorney, so you would be at this on your own. How much of your free time are you willing to give up to study court rules and procedures, the defenses you would raise, submit discovery etc.

      • That’s what I figured. The SOL situation in Colorado is a bit confusing. We are just about at 3 years if the date of first delinquency is what is being used. That may be why they filed now. If I negotiate, do I then just respond to the court with the outcome? Are there general court fees in this situation.

        It’s amazing they are willing to sue for such an amount, but I suppose it’s getting me to react which is what they want. Seems an awfully expensive route to go and a waste of the court’s time. Thanks for the response. I was worried about contacting them if it would cause more problems and the SOL clock to begin again, but I’d rather be out a few bucks than have a judgement on my credit report.

        • Michael Bovee says:

          If you negotiate a deal with them, and fund it before the case can progress (so within a week or two), part of that deal will be for them to dismiss the case. Be sure that is outlined in any written agreement. If you do end up filing an answer because you need more time to come up with money to settle, they would still be the ones agreeing to dismiss the action and would have to follow through on that.

          I am in complete agreement with you on avoiding a judgment whenever possible, or even the risk of one with a relatively small dollar amount.

          • New Information **

            Last night, I got served again with this same suit. Not sure why the second service. In any case, I noticed that the summons does not have an official seal or signature from the court. It also does nto have a case #. The debt buyer is Liberty Acquisitions and from what I have found online, this is a common practice with them. Is it even legal for the to serve a summons if this hasn’t even been filed with the court?

            Should this change my approach? Would it be best to write a debt validation letter and see what comes back?

            • Michael Bovee says:

              Diana – First thing I would suggest is to look up your name in the court to verify what is happening. The court clerks can help you decipher what is going on to date. They will not offer legal advice, but they are typically great at helping you understand the process. Pull all the details you can from the court and lets go from there.

              • Checked with the court and they filed with the court on September 18. Nice of them to give me time to prep huh?

                Anyway, the clerk whose office it’s assigned to said that I either need to file an answer at the courthouse prior to the date on the summons or I can do it that morning. I can ask them to validate the debt in the answer. If I answer there is a court fee of $92. I could do that, but if they happen to have more than the typical spreadsheet that most junk debt buyers have then I’ll be out $92 and still likely end up with a judgement against me right?

                Am I still in the place where I should just negotiate with them?

                • Michael Bovee says:

                  Diana – Based on the dollars involved, I would generally encourage settling the collection suit. People tend to get a better savings in this situation when they first file and answer and raise affirmative defenses. This establishes that you are not going to be one of what is often cited as 90% of the people who get sued and don’t participate in the process – ending up with a default judgment. Like you suggested in your original post above, settling will likely be more economical, and not just from a dollars perspective, but also for the economy of your time. Hiring an attorney for help would likely cost more than what you could settle for. Defending the case yourself, even though being sued by a debt buyer, is not a lay up, and in order to set yourself up for the best shot at getting this dismissed, you would dedicate more time than most are prepared for.

                  The 92 dollar filing fee is also part of your consideration. If you want, you could call them and let them know you are prepared to defend this all the way, but are willing to settle it for xxx amount for the nuisance value. If they agree to a figure you can live with, you could save the 92 bucks. If not, do not stay on the phone with them, just file the answer and be prepared to follow that up with another attempt at settling.

                  • One last question (hopefully). The cardholder agreement from the OC states “If the account is referred to an attorney who is not our salaried employee and we bring a suit against you to collect the amount you owe, in addition to the full amount owed and any court costs, you agree to pay our resonable attorney’s fees of 15% of the total amount due, or such lesser amount as may be permitted by applicable law.” If the OC “sold” the debt, does this collection agency attorney count as the “we” in the “we bring suit” statement? Or no because the OC is no longer involved?

                    The statement on the complaint says refers to the CA as the “assignee” They reference the cardholder agreement and further state that “Defendant is obligated for court costs and may be obligated for attorney’s fees as provided by the contract.” But I have no contract with the CA. Is this something to work with in the answer if I can’t settle?

                    • Michael Bovee says:

                      Diana – I cannot answer your legal questions with the specificity you need and deserve. You should contact an attorney in your state, and preferably one with debt collection defense experience, in order to get those answered.

                      Generally speaking – When you are granted credit from the bank there is nearly always a clause that speaks to the banks right to assign or sell your account. Debt buyers are an extension of that clause. In other words – debt buying is legitimate – it is part of our lending ecosystem. That said, there are often gaps in how debt buyers go about suing to collect and their ability to prove up their claim. That is changing, and rapidly, but for now, you can exploit those gaps.

                  • I called to negotiate. The guy was rude. Said they would be willing to accept $700 to settle. Claims that the total is now over $800 with interest, court costs and attorney’s fees. He claimed they sent me 17 letters. None certified so it’s their word against mine on that score. At one point he even said “Well it (meaning the suit) got your attention didn’t it?” Really? Wow. Anyway, $700 seems ridiculous when the original debt was $267.

                    So now I guess I have to file the answer and put out the $92 to the court. It sounds like I might not be able to win, but I can’t be sure whether they can validate the debt or not. The court complaint says “On January 19, 2011 the amount owing was $267.34….” Does that mean they are using that as the date for SOL? If so isn’t that re-aging since the credit report lists date of first delinquency of Sept 2010??

                    Starting to worry this is going to cost me a whole lot of cash.

                    • Michael,

                      Thanks so much for helping me to understand this much more than I did upon being served. This is a great thing you are doing.

                      Diana

  159. My wife’s mother passed on and left some debts behind her and no savings. Her meager estate went through Probate Court where my wife was appointed Executor as the will had requested. We are already $2000 out for legal fees in that respect, and we are still paying for her medical bills.

    My wife has since received a “Sworn statement supporting claim against estate” with a sum of money but no supporting evidence or explanation.” The next page says XXX the owner and holder of a claim against the estate in the sum of… And someone’s name as the claimant. There was no supporting evidence explaining the sum of money, for all we know it could be cc fees and interest since the lady passed on. It is not our debt and we had no knowledge of it or how it was incurred.

    What exactly is this? Are we being served in some way? There is no explanation of what this is or who they are. I’ve tried googling them but they do not google very well for someone claiming to be working on behalf of a bank? Thanks for your time.

    • Michael Bovee says:

      David – It does not appear from what you shared that you are being sued, but the estate is. What is the name of the plaintiff in the lawsuit? Who is the attorney debt collector debt collector that was hired?

      • Hello Micheal thank you for getting back to me. DB servicing Corporation is listed as the owner and holder of the claim, then goes on to list someone’s name as the affiant and claimant, can supply that if you need it. All that has been supplied is a figure owed with no further explanation.

        Background: It gets slightly more complicated in that the deceased had been diagnosed with Lewy Body Dementia after a history of going in and out of hospitals/hospices and was not fit to look after her affairs, which she did not share or explain to us. Which left us totally in the dark on all things. Sadly she was very childlike at times. If we have to go to court, I’d want to know how much of this debt she actually incurred and want to see evidence of it, and how much was fees and interest tacked on, and whether this still applies to someone in her condition, or after her passing. There is no money in her estate. We are still paying her medical bills, [not related to this issue].

        • Michael Bovee says:

          David – If there is no money or property in the estate, your paying those bills out of pocket is likely not required. You should run this by an experienced attorney first.

          If there are extenuating circumstances that you would like to talk over offline, call me. No fee. I sent you an email just now. My direct number is in my sig.

  160. I was served papers from 2007 to show up in court regarding a civil summons. I forgot to mark it on my calendar. There must of been a default judgement against me for not showing up. Lastly, they never contacted me since 2007 regarding this credit card debt. The attorney decided to levy all my bank accounts for a total of $5200 & froze my account! When I notified the attorney, they agreed to keeping $4130 and 25% to be put back into my bank account! I did NOT think this was LEGAL! I was NOT left with a penny! The total amount due was $5500 even though actually credit card limit was only $500.00 The settlement they offered me was not the best and don’t know if it would of been any different if I tried to settle it in court. I am also required to make $50.00 monthly payments until account is paid in full. Do you have any advice for me regarding this matter? The attorney stated I was served papers in 2007 and have no recollection of it!! I don’t have any proof that the $5500 was just from my Discover Card from 13 years ago!!!

    • Michael Bovee says:

      Mikey – What was the amount of the original judgment entry in the court and what was the exact date the judgment was entered? Judgment debt can grow with interest allowed in your state. Some states allow contract interest rate on judgments. The balance can easily balloon over the course of 6 years depending on the judgment interest allowed.

      Also, I want to be sure I understand what is going on from here. They say you owe 5500.00 on a judgment from 2007. They are keeping 4130.00 and setting you up on 50.00 monthly payments for the remainder. Is this correct? Is there interest being charged on the remaining balance? If so, what is that rate?

  161. I’m not sure what to do. I am being sued for CC debt by the attorneys of a debt collection company. I tried negotiating a settlement with them, but I felt like they were trying to stall past the 30 days when they would get a default judgement (in CA). Someone suggested that I answer the summons just in case something fell through with the settlement.
    Sure enough, AFTER the 30 days, they called and said they would settle for $2000 (I had asked for $1800). I told her I didn’t have the $200 difference. She said I could pay the $1800 that day and the remaining $200 before the end of the month. I asked her if I paid the $2000, would that be the end—would the lawsuit be dropped? She said yes. I asked, even if I’ve already filed a response? She said yes. I said ok and gave her a checking account number. The $1800 came out yesterday.
    Today, I got a letter saying I have to sign it and return it to them by the 20th. It says that in addition to the $2000 we agreed to settle for, they want me to pay their court fees. If I don’t, then they are asking the judge for the full amount of the lawsuit, plus fees. I don’t agree that I owe the original amount they were asking for in the first place (which is in my answer), so I don’t want to sign this, as well as I never agreed to pay their court fees when we settled.
    Do I put a note next to the paragraphs I don’t agree with and say, “Defendant does not agree?” Should I just ignore this and pay the $200 I agreed to without signing it and sending it back to them? Should I not pay anymore and just go to court? I was also thinking about mediation or arbitration. I am wondering if this is just a scare tactic and an attempt to get more money out of me. It doesn’t seem right, but I don’t want to blow this.

    • Michael Bovee says:

      Matt – What you described is why you wait to make any payment on a settlement until you have the agreement in writing. Written agreements to settle when being sued will look a bit different, but should still meet a general outline.

      What is the amount in court fees they are try to get from you?

      • I know…I wish I would have found you before I did anything. Thank you. They are trying to get “First Appearance Fees,” as well as another fee that I can’t quite remember (I don’t have the papers with me right now). It is about $285 more…which is what their original settlement offer was that I said I could not do and I offered the $1800, then they agreed to the $2000. I’m thinking of just sending them a check for the $200 I still owe and writing “PAID IN FULL” on the memo, or just go to court…I don’t know. Seems underhanded of them.

        • Michael Bovee says:

          Matt – I do not like the paid in full idea on the second payment. I am not confident you will get what you are looking for from the court either.

          My feedback on those 2 concerns would be quite lengthy. Are you able to connect with me on the phone to cover these issues so that you can best evaluate what steps to take next? If so, send me an email (just reply to the same email you get these comment notifications from). We can set up a time to talk.

          • I took your advice and everything worked out. I was waiting to make sure that they didn’t try anything else. They honored the original agreement and the court case was dismissed and my credit report reflects it as well. Thanks for all your help.

  162. judith jones says:

    Who would I get to hire to write a settlement letter.thks judy jones

    • Michael Bovee says:

      judith – I cannot offer much of an answer or feedback to your question without more detail.

      What are you trying to settle, and with whom?
      Is this about negotiating an agreement after already having been sued?

  163. I was served a summons – by substitution – at my employer’s site. Need to respond in a week. I’m in California, Bay Area. Capital One suing for $8612 through Nelson & Kennard. I stopped paying on this account in December 2011. I just called the collection attorneys and negotiated. My offer: $4500, theirs: $6851, mine: $6000, theirs: $6500. I said “let’s do it – fax me an offer letter” (which will come tomorrow). Is it wise for me to accept this? Or should I spend money on a consumer debt defense attorney to defend against the suit in hopes of settling for less down the road and spending less overall? I don’t dispute the debt and want to pay them, but I was foreclosed on last year, and I still have &150k in delinquent debt. I have to be very careful with the amounts I pay out to each and every creditor.

    • Michael Bovee says:

      karen – Capital One sues as the original creditor and will take cases all the way to trial. It is possible to get a lower settlement than what is on the table by defending the suit, but my bet would be the cost of the attorney would be equal to, or perhaps not quite equal to, their fees. So the savings on the table now, and ending the suit, would outweigh the benefit.

      With all of the other debts you have I wonder if bankruptcy would be the better option. Have you looked into that? Do you qualify for chapter 7?