How to Settle Credit Card Debt with a Judgment
One of my credit cards I fell behind with sued me and has a judgment.
Can you settle credit card judgements like other debts
—Stressed
Short answer
Yes, a judgment can still be settled. Settlements can be negotiated at every stage of the collection cycle, but settling before a lawsuit is filed is easier and usually saves more.
Key points on this page
- Settlement is possible at any stage, including after a judgment has been entered.
- The largest savings usually come from settling with the original bank after a few missed payments.
- A judgment is enforced through bank levies, wage garnishment and liens on real property.
- Judgment balances keep growing at the interest rate set by the court, and most states allow a judgment to be renewed, often ten years plus another ten.
- Wage garnishment removes most of a creditor’s reason to negotiate, so act before it starts.
- If you cannot fund a settlement, bankruptcy can stop a levy, a garnishment or a lien.
The short answer to your question is – YES! CRN does assist in settling debts like credit cards where there was a lawsuit and then a judgment entered against you. Settlements can be negotiated at all stages of the collection cycle.
There are challenges to settling credit card debts that have reached the lawsuit and judgment stage. Before I address the challenges, I want to point out that the best time to settle credit card debts is before a lawsuit is filed, and even before the account is placed with a debt collection attorney.
Watch my brief video about some of the differences between settling credit card debts with your bank and debt collectors compared to negotiating with collection attorneys whether they have a judgment or not.
While this may not be instructive to your judgment debt, you may have additional credit card debts that have gone unpaid and I want you to be aware of the following:
- Settling a debt with your original creditor (the bank you had the credit card with) after having missed a few payments is not only possible, but in your best interest. In fact, reaching settlement early will often achieve the best savings result when negotiating is done correctly.
- You may end up with credit cards that are charged off and placed with outside collection companies. This is the next best (sometimes the best) opportunity to settle a credit card account you could no longer afford to keep payments current.
- If your overdue credit card account lands in a collection attorney’s office, you can still settle the debt before any court action is filed, or at a minimum, negotiate favorable payment terms.
There is a science to navigating the collection stages I briefly outlined above. Timing, balances, who your credit card debts are owed to, and your ability to come up with the money needed to settle the debts – all will affect the strategic design of which account to settle with first, second, third etc…. It is important to have a plan to follow if you want to systematically and successfully settle debts and save the most money in the process. CRN is excellent in assisting people in this regard.
If you want to learn about how to settle your debts no matter what stage of collection you are in, we have a ton of resource pages to help you. I recommend starting at the beginning of my debt settlement section.
If you are floating out there with several unpaid credit card accounts with no real financial resources to handle the situation, or a plan for doing so, you owe it to yourself to learn if you would be better off filing for chapter 7 or chapter 13 bankruptcy before a lawsuit is filed, or now that a judgment exists. You can consult with a bankruptcy attorney for free. I recommend talking with more than one.
Collecting on credit card judgments can be challenging too.
The primary ingredient found in any debt settlement recipe, whether there is a judgment or not is… money. If you have enough of this ingredient you need to be aware of a few things.
A judgment is just a piece of paper. It’s the court sponsored enforcement of that piece of paper that is the problem. You could end up with liens placed against your real property, your bank account levied and wages garnished directly from your employer. There are even instances where a sheriff can show up to take a look around at your “stuff” and inventory personal items that can be taken to satisfy a judgment (this happens, but relatively rarely).
Judgment debt, whether past due credit card bills, personal loans, medical bills and other debts, are easier to negotiate and settle while maximizing your percentage of savings results if:
- A bank account to levy cannot be found because one in your name does not exist, or does exist but is maintained with little money in it;
- If a W-2 wage source cannot be located to garnish and;
- Where there is no real property lien, or where the lien is filed, but has been in place for some time and remains unpaid.
The one thing you can control is whether you have a bank account with your name attached. If you do keep a bank account open, realize most bank levies are attempted at the beginning, middle and end of the month – when you are most likely to have deposited a pay check, or other money to cover bills.
If you have sources of funds electronically deposited, you may want to elect to have paper checks issued to you until the credit card judgment debt is resolved.
The lien on property will generally not involve forcing the sale of the property in order to satisfy the judgment. You should look to resolve the judgment prior to selling the home (negotiate a settlement before listing if possible), or refinancing (settling before a lender does a hard credit pull is often best).
Wage garnishment is a major concern. Once your wages are attached the creditor has little reason to work with you at resolving the debt for less because they will continue to get paid unless:
- You prove you meet garnishment exemptions in your state
- You leave that job
- You satisfy the judgment
Warning: Your credit card judgment debt grows from interest and can often be renewed!
Interest is accumulated at the rate set by the court, or the maximum allowed by law in your state for judgment debt. While you may be able to be creative in how you avoid paying the judgment you must realize that the balance of the judgment is likely increasing.
If you are struggling with overdue bills and other expenses and are unable to come up with a plan to get rid of the judgment or lawsuit through a negotiated settlement or payment terms you can afford, the fact that the debt is increasing should concern you. Stop and consider what your options to resolve the credit card judgment will look like next year. The year after that.
Judgments do have a “best collected by” date, but can be renewed. Judgments have a shelf life with a time frame specific to your state. Most states allow for a judgment to be renewed prior to expiration. For many, this is a ten year time line and renewal allows for an additional 10 years. That’s a 20 year shelf life!
Identify all resources you can tap to fund a settlement offer or payment plan successfully. If you cannot reasonably come up with the money to settle the debt, or make payments after reaching agreeable terms, look to bankruptcy to stop a bank levy, wage garnishment or lien on property.
Those are the unfortunate realities.
I highly recommend anyone with a judgment, that needs to be resolved in order to buy or refinance your home, to watch this video interview I had with a former debt collector: https://youtube/QpdDks73QUw
It is always best to put a plan together to address delinquent debts before a judgment becomes the concern and you are forced into crisis mode. If you have other debts, you can still put a plan together that includes resolving the judgment too, but it is important to not waste any time in doing so.
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If you would like confidential help you can use any of the boxes below to connect with me. You can also post in the comments below for feedback. I answer those regularly.
Not sure where to start? Click on the big blue “Get Debt Help” button at the top of the page.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
What does it mean to let a court case ‘run it’s course?’
Synopsis: Roommate got a credit card and let it default because of unemployment due to health issues. She works ‘under the table, but it’s not much.
She got a summons today, and when she called the attorneys’ office, she told them she could pay $20 a month. The guy was sympathetic, and said while she could send the $20 she can afford, it couldn’t be considered an ‘actual payment agreement.’ He then said he couldn’t give ACTUAL legal advice, but he suggested letting the case ‘run it’s course.’
What exactly does this mean? What situation is she actually looking at here?
Thanks for any advice.
Becky – I can only guess at what the rep at the collection firm was referring to. Once sued for a debt, the situation yields to a formal process. If your roommate does nothing (does not set up an agreement to pay that is agreed to and documented, does not file an answer to the lawsuit with denials/defenses), the attorney will end up with a default judgment. That is what I assume was meant by running it’s course. It is unfortunately the outcome on roughly 90% of credit card lawsuits filed.
What is the total balance owed?
Who is the original creditor? Is that who is named as the plaintiff? If not, who is the named plaintiff?
Who is the collection law firm?
When was the last payment made on this account?
What state are you in?
I can offer some additional feedback if you post answers to those questions in a comment reply.
Hi
I just received a judgment at my home today. It’s for a credit card I didn’t pay in Texas. The judgment is for 6800. I called the collections office and they will negoiate 2300 but I can’t really get that much. I could really get 2000. Do you think they will take that. The collect has already sent over a contract for the 2300.
Do you really think they will throw away the 2k?
Bret – It’s possible to renegotiate a deal to get your payoff down another 300. You will have to call and get them to agree, and send another settlement agreement to you.
I have seen settlement deals get unwound when there is already an agreement in writing, but not yet paid, where there is a need to negotiate for a lower pay off. But without knowing a good deal more of the particulars in your situation, I cannot say how likely that would be.
Michael
In 2004 while my estranged husband was awaiting trial for 2.5 million bank fraud he took my Citibank card, changed the address to a PO box and rang up 8,440 dollars. When he went to jail in May of 2005 and I found out about the PO box I contacted Citibank about what I thought was fraud. I answered all their forms. Debt was sold to Midland Corp. In April 2011 their lawyers Messerli and Kramer sued and I responded on time with my defenses. They replied and I took it to a bankruptcy lawyer and we sent back our responses. 3 weeks ago my Lawyer called and said the gig was up. I told him I would try and settle. I offered 3,000 and they said no and would only settle for 75% of original 12,145.00. I now have a court date for Dec 11, 2013. When my lawyer sent their response to me it was dated Feb 13, 2013 but he didn’t call me until Sept 2013. I feel he dropped the ball and I don’t know where I stand. I have a job and 12,000 in my savings account. Should I show up in court and agree to pay the 75% or will I have to pay total….can i call and pay the 75% and stop the court….help I feel abandoned by my lawyer . I’m willing to pay the 75% to make this all go away.
Mary – You have a very interesting situation here (at least to someone like me viewing this from the outside and not having to live through it). I have a sense of next steps you could take, but I want to be sure I understand the situation, and need you to fill in some gaps.
When you noticed Citibank about the fraudulent charges, and filled out forms etc., did you also file a police report, or send your fraud notice in the form of an affidavit or notorized correspondence? If so, what if any response did you receive from Citibank? Was there any balance on the card other than the 8440.00? Was there continued use of the card after the fraudulent charges were brought to the banks attention?
When was the last payment made on this account?
What state do you live in?
The original creditor is BB&T and the attorney is working for them. It was a line of credit if that is different somehow. The law firm is Jones, Morrison, & Womack in GA.
THank you SO much!!
Darcy – Given the debt is still owned by BB&T, and that you have not been sued yet, I would encourage you to look at your household budget and what payments can be afforded each month. You would then contact the attorney collecting for BB&T about whether payments can be agreed to. You would want to get an agreement that the amount would be accepted. Otherwise, you could make payments and still be sued if the amount is not sufficient to stop that from occurring.
The line of credit is not necessarily different, but can be. Was the line of credit associated with his business, or was it personal debt?
We (my fiance and I) live in GA. He got a letter today from a collection attorney for a debt owed for $25k. Will they set up payment arrangements. I know we should have dealt with this before it got so out of hand, but you get so overwhelmed and he was out of work for almost 5 months. The letter just say pay in full in a month or risk lawsuit. We aren’t denying the debt, but can’t pay that in a month. And he is self employed so what happens if there is a judgement?
There are some creative ways to approach your situation. Payments are possible. I can offer more thorough feedback if I knew who the original creditor is on the account, and who the attorney is working for (that same creditor, or a debt purchaser). Also, what is the name of the law firm collecting on this debt?
I am being sued by Midland Funding for a Target credit card. The attorney is from the Stillman law office in Farmington Hills. Is the consent judgment an actual judgment or does it only become an actual judgment if I default on payment terms? I ask because I want to buy a house and know that a new judgment will cause my credit score to take a huge hit. If the consent judgment is an actual judgment that will appear on my credit report, is there a way to have it removed once it has been satisfied besides waiting seven years for it to fall off?
Cam – You will want to run the consent documents by an experienced collection defense attorney in your state in order to get a solid answer. I see this type of situation go both ways.
As far as getting the judgment off of your credit report after the fact – No, not really. You can get the judgment updated to show it has been satisfied, but ifit is in the court record, which is public, it will nearly always remain for the full 7 years. You are still in some control of the situation. Ideally, you would want to settle this without the monthly payments to avoid the risk to your credit report.
Are there any creative ways you can raise the funds to make an offer to settle?
I have a default judgement in illinois small Claims court against em, for “1995.00 plus costs” what does plus costs mean? on my credit report for midland llc it says 3229.00 for the amount(before court case was filed), the $1995 is the original amount (credit card account a couple years ago) I’m fine with paying, I did owe it even if they are a JDB I just am not sure how mauch they can ask for
Mike – Look over the judgment docs from the court. Costs are typically those associated with filing fees and legal representation. See if those costs are clearly outlined in the final judgment, or referenced in the original lawsuit. There is often judgment interest that is added. Most states cap that at around 10%.
thanks so much, the court costs are listed, like 100$ or so all together, I just wasn’t sure if they could say costs(it says “plus costs” not “plus court costs”) meant like all the fees added on over the years, but the way it looked to me was the $1995 awarded by the judge and the COURT costs, thanks so much, I figure they’ll try to talk me into paying all sorts of “costs”
I have some questions and concerns about a medical debt that I likely owe some part of and the debt collector, whom I do not trust at all, based on some phone conversations with 3 of their representatives. The debt is $800 for a Christian counselor I saw during a time when the company I worked for began to discriminate against me after I revealed I had MS when I needed an accommodation for my work. My health insurance had been covering it but then I had to switch insurance companies when I started a new job and covered much less. By the time I found out they weren’t paying at all, the bill was up to $800 which means that I hadn’t been billed in over 2 months. I immediately stopped going. A few weeks later I was laid off from my new job. I attempted to discuss the bill with the billing person (who only worked a couple days a week) and all she wanted was a payment plan which I could not do without an income and I wasn’t sure how much the ins should have paid. Eventually it went to collection and I was having an MS relapse and could not continue to deal with the ins company ( which remains unresolved today) The collection company is the Jennings Law firm. I have told them that if there is a part of the bill that I really owe I would be able to pay upon reemployment ( which has not happened in over a year now). Then one of their reps called and lied to me that he saw that there was a filing in my county ( he named it) for a judgment against me and they could garnish my wages and/or place a lien against my home. No such filing ever existed. He was argumentative and rude, then hung up. I called back to see what was going on and complained about how rude the person was, he told me that the person said things he shouldn’t have and they were counseling him. He said he was a senior person and then he offered a settlement of $500 and I said I would consider it if I could get it in writing that the debt would be paid. I never received anything in writing. A couple of days later another representative name James called and I referenced the settlement, he knew nothing of it and could not find any notes on it. He also said in this conversation that they had already been paid by the counseling organization and referenced they owned the debt. A couple of months later, one of the persons I talked to before calls me and wants the entire amount. I reference the settlement offer, he tells me that he has to ask the counseling organization if they will agree. He calls back the next week saying the counseling company wants closer to $750 and won’t agree to $500. I thought that James told me they “owned” debt. What’s really going on here. I feel that if I had paid them $500, I would still owe money. The counseling company is a Christian Organization and do not believe they would respond that way. I don’t believe the Law firm at this point as their information is conflicting. I have no unemployment any longer and no longer have access to even $500 I initially agreed to consider as settlement. The Law firm is now saying their client wants to move forward with legal proceedings. I don’t believe them. I think the law firm does not their client( who I was told already paid them for the debt). What can I do at this point. I believe they have lied and misrepresented the status of this account. I have dates, times, and names of my contact with them.
Chris – Have you called the Counseling Agency to inquire about the status of the bill originally owed to them? If not, I would start there. If so, what were you told?
Thank you for responding so quickly. I have contacted the counseling office today and am awaiting their response. The response from the Jennings law firm was in a letter on Friday stating “their client wants to move forward” with legal proceedings and said they would wait 5-7 days to hear from me. I may not hear from the counseling office for a few days, should I respond to the law office and if so what should I say?
Chris – Can you type in another comment with the exact verbiage used in that letter from the law firm. Not the whole letter – just the text leading to and after the quoted section. Collection attorneys do not typically imply they will be proceeding with litigation in order to collect unless that is indeed what they intent to do.
Because you are not clear about the nature of the debt, who they work for (the owner of the debt), and there has been conflicting information, it would be a good idea to send a letter requesting validation of debt using certified mail return receipt.
Is this the first letter you received from the collection attorney?
I received a Warrant in Debt today via the mail. I’m sure it was a courtesy copy, and that I’ll be served by the sheriff or a private process server at some point in the very near future. I’m pretty mortified about this. The truth is I do owe the debt. It is for a medical bill and I was not able to keep up with the payment plan I arranged several months ago. They did not waste any time getting it to a law firm. I want to pay off the debt in full without having a judgment entered against me. Is this possible? Or do I need to go to court and plead guilty and have this judgment on my record forever? I know this is public record and the last thing I want is for people to be able to search my name and have this come up. I’m very humiliated and horribly upset. I want to take care of this as soon as possible without shooting myself in the foot. I’ve already sent the attorney who signed the warrant an email asking him if it was possible to make arrangements to pay the debt. What next? I would really like to avoid (1) having to go to court, and (2) having a judgment entered against me. However, I will not trust the collection attorney without getting something in writing, and I don’t want to sign some consent to judgment. I just want to pay and be done with it. Is that possible? Thank you for any information. My state is Virginia.
Christine – The best way to avoid all of what you are concerned about is to pay it off. You could also look to negotiate a smaller payoff amount and still avoid court/judgment. But attorneys feel they have the upper hand when they sue, and they are often right.
How much is the bill?
How much can you come up with to resolve this and put it behind you?
Michael, thank you so much for the quick response. This particular bill is somewhat smallish, but we are riddled with many medical bills due to unexpected surgeries/illness and my son’s ongoing medical care (he has cerebral palsy). The bill in question is $346.xx, but they are asking for 18% interest from 9/4/13, plus court costs of $53.00 and attorneys’ fees of $97.00. I’m estimating it will be somewhere around the $550-600 mark. Generally speaking, not really a huge amount of money. It’s not ideal, but we can come up with the cash. We are feeling very overwhelmed with all of the medical bills, and have not been very good about making payments. This has inspired me to really take the bull by the horns and get on payment plans and take care of all of this. I feel we will probably be paying medical bills for the rest of our lives, but that is better than getting sued. Nonetheless, I really want to avoid having to sign off on a consent to judgment. I’m going to offer to pay cash up to $600. Will the attorney be able to withdraw the Warrant in Debt and get it removed from the court’s docket? I really don’t want to have to make a court appearance and have a judgment entered against me with a guilty plea. This is making me very anxious. Any information you can provide is very much appreciated.
Christine – Court costs and attorneys fees are common, and the amounts you listed are reasonable. I would question the interest rate, but you seem to want to get this over with and put it behind you. You can pay this in full and get them to dismiss the court action. Just be very clear about that when you speak with them, and make certain you ask questions and completely understand how they are going to handle that on their end. If you run into a hitch post a comment update and lets go from there.
Dear Michael:
I hope you can help me, My boyfriend is in the process of selling our home and my name was taken off the deed in May 2008 because he did a reverse mortgage..I just found out yesterday that back in 2004 I had a judgement issued against me, then one in 2006 and one in 2008 that was brought against me by junk debt buyers not the origional credit card companies, back in 2002 I lost my income, lost my home , my car and was homeless, I couldn’t pay for anything I had no money so that is the reason I couldn’t pay the credit cards, I am not sure what they really are, the debt buyers put a lien on our property but it never come up when the reverse mortgage company ran the title on the property just now when he is selling it.. I was never contacted about a court date or any of these judgements never and they had a court date in Louisville, Ky not in the county I live in which is Mc Lean County Calhoun, Ky. we had not been selling our home I would have never know about this at all, I have been to the court house and got copies of the liens and they are prepared by the same people but by different names on the court judgement….Could you please tell me where to turn and get help and get these off of the property and any other property I might ever live at or own..These judgements are not showing up on my credit report at all and never have just at our court house..I just run my credit report yesterday on all 3 bureaus..They are wanting over $19,000 off the sale of the house and we barely making anything off of it.. I am also on disabilty and have been for many years and was the time all this take place….I have never had any contact with this debt buyers and never knew they exited until yesterday..Thanks for any help , need help as soon as possible
Sharon – Couple of ideas to follow up on:
Title company insured the transaction. Check out that angle.
Check with an experienced debt collection defense attorney about your options after discovering you were sued and judgments entered that long ago, but in the wrong county and having had no knowledge. It is not common to undo court judgments this old, but someone who specializes in this area of consumer law should be your go to resource. I can email you contact info for attorneys with this experience nearest you if you post the name of a large city close by.
You could also at whether you would be able to discharge the judgments, and the liens associated with them, through chapter 7 bankruptcy. But that can take 90 days or more, so you would need to be working with a buyer who is patient and willing to wait.
The judgments may have never appeared on your credit report, but that is not common. If they were on there, they are not now because they likely aged off at the required time (typically 7 years from court entry).
Who are the judgments in favor of? Who were the attorneys that handled the lawsuits?
Did the title company already send out demand requests? Ask them and let me know.
Dear Michael:
Just came from the court house in my county n they were filled in my county by mail no one was there to represent them just by mail and since I wasn’t served I didn’t know to respond… One is a junk debt buyer and they said I owes Wells Fargo but I have had any dealing with that bank ever..The other 2 was Lowes’ card and a JC Penny’s and they were both written off many years ago, but these people that bought the debt is the ones that have the judgements against me..I guess I have no other resource but to settle with them so he can sell the property..What is the process to do this need to do it real fast, I don’t make much off of Disabilty and don’t have the money to pay the whole amount, what do you think is a fair settlement I need for them to take the lease amount possible..It really has put us in a bid…The largest town close to me is Owensboro, Ky hope you have someone there that can help me with these settlements….Thank you for all your help…The lawyers are Greene & Cooper and Maporter & Maporter in Louisville, Ky….Sharon
I sent you contact details in an email to 3 different attorneys with the experience needed to best advise you. They are in Louisville, so a bit further than we would like, but they are a phone call away from consulting, and distance does not have to be an issue in some cases like this.
I am very concerned about the circumstances. You were never aware you were sued, and one of the judgments is for an account you may never have had. All of this is very unfortunate, but made worse by the timing of your other needs and goals.
I asked about whether the title company had already sent out demand requests because that becomes important when negotiating settlements. When your hand is tipped that there is a real estate transaction involved, and when it is obvious there will be money in your pocket after the mortgages are paid off, collectors know to hold out for full payment. If you had a head start on some of this, or the title company has not sent off demand requests to the judgment/lien holders, you can do some quick work.
I cannot offer much by way of an estimate of what amount to target when settling until I know the names of the current lien holders and whether title has already alerted them with payoff demand requests.
I owed some medical bills that I was unable to pay. An attorney sent me a letter regarding 5 of the accounts. I knew that I had to pay them but am struggling financially. I quickly borrowed 1/2 of the total amount owed from a relative and sent in the payments that I could to the original creditors. Three of the accounts were settled/paid in full and the remaining 2 accounts are 1/2 paid. The checks were cashed 5 full days prior to a court date I had gotten notice of. I did not attend the hearing and the attorney went ahead and got a judgement for the whole amount despite the fact that 3 of the accounts were paid in full. Now they want to garnish my wages for the full amount plus piling on interest and court cost’s. What can I do? I live in Illinois
Kris – The notice of garnishment you received to collect on the judgment from the medical bills you were sued for, should have had instructions for how to contest the judgment with the court. You typically need to request a hearing where you can explain and document the payments etc. You can also show where some or all of your wages are exempt from garnishment if your income and living expenses meet certain thresholds. If you did not receive the instructions as part of the garnishment notice you will want to call the court on Monday and get that set in motion.
Thank you so very much Michael. I will request a hearing to dispute the wage deduction. I support a 3 person household (me, my disabled husband and a son in school) on just one persons income (mine). I am not certain what the thresholds are in my area but, I’m not a deadbeat who doesn’t ever pay their bills. I was out of work for several months in late 2011 due to a serious back surgery and have been laid-off (with no income) for a full 8 weeks since dec. of 2012. Food shelter and clothing come 1st and then whatever is left goes to “other bills”. I wear thrift shop clothes and drive an old ’99 Cavalier which I was lucky enough to buy for $400.00. I have no savings to fall back on and even had to take out a loan against my small 401k account to keep the lights on during my lay-off. Thus my check is already reduced beacuse the loan payments come directly out of it. As far as I’m concerned, this attorney perjured himself in court and lied to the judge when he requested the full amount (which was no longer owed/correct) in judgement against me. With this in mind, I doubt that he will be willing to an out-of-court settlement based on his prior unethical actions. I just hope that the filing fee and court cost’s dont match or exceed what I already owe!
Thanks again for your kindness and advice. Regards, Kris
Hi Michael,
I just came across your site and reading how knowledgeable you are in the area of debt. If you would be ever so kind to guide me in the right direction. In I have a judgement against me for $29,000. Its not for a credit card or loan. Its something that happen in 2006 that I’d rather not talk about, and i been paying it on time as requested, on the terms the fed and I agreed on since 2006. Now I have a family of 3 and need to get a mortgage but, no banks will loan me money with my judgement. Is there any possible way to get this amount settled in a reasonable amount that I can pay in full, without paying in full? FYI: This is not tax related either
Dewayne – In order to offer anything more than general feedback I would need to know more details. You mentioned agreeing to payment terms on the judgment with the fed. Was this a loan through or underwritten by the federal government (sued for student loan, SBA loan)?
Judgment debt can be settled. But it is situational. It is not common to negotiate a lower amount to pay off when you are making current monthly payments.
First of all thank you for your response to my previous judgements. My current problem is that I settled both accounts with Solomon and Solomon (attonerys for capital one) and just found out that they had 3 judgements against me. Of the 3, 2 are actually for the same (1) credit card but it has 2 different file number as well as docket numbers. I was onky aware of this because I recieve a free credit score thru my bank (not sure if thats a good idea) and kept wodering why my credit score kept dropping. I then figured… why not call the court house where the previous judgements were held and settled to see if there were any new judgments against me. The woman I spoke to was kind enough to tell me that there was 3 judgments with 2 being satisfied and 1 still opened. She then told me she will resend the paperwork belonging to all the cases to me instead of having me go there and get charged per sheet.
As I looked at it I realized while comparing all the paperwork from the previous judgements that there of the 3 there were 2 docket numbers that were for one credit card debt. I called the clerks office at the court house and was told I needed to speak to the attonerys who filed it against me bcos they needed proof directly from them stating that the accounts were settled and cannot accept it from me.
My question now is, does that open judgment hurt my credit even though it belonges to one card that was already settled. Second question, what can be done aside from calling Solomon and Solomon to tell them that they messed up and put an unsettled judgement against me that was settled.
I scanned all the documents so I can email it to them because on their records I only have 2 accounts when I last spoken to them.
Ive tried calling them several times to ask what is going on with the unsettled account but havent heard back but as usual am told that they are not available and to leave a voicemail.
I appreciate any feedback I am given and appreciate your time for reading this and being as helpful as in the past and with others similiar in my situation, thank you.
Siri – How long have they not returned your calls?
Its been about a week.
Siri – I would continue to call them, but simultaneously prepare a written outline of your issues and send that to them certified mail return receipt. Save a copy of anything you send them. Keep track of any and all phone calls you make (date, time, who you spoke with, what was said). If you do not get this resolved after your written request it will be time to file with the state bar, your AG, and probably the CFPB as well. You could even politely reference these complaints as your next course of action should prompt attention to the matter not be taken.
Update: I received a call from the attorney Julie Solomon of Capital One stating that she was unaware of a third judgment and how it was entered without their knowledge. I gave her the docket numbers because it was obviously the same file number as well as credit card number. I asked why there were two docket numbers because wouldn’t all events taken be recorded in the same account/docket number that was already on file. She said that one was entered as a judgment while the other was for a trustee wage garnishment action. But that she will have a letter of satisfaction sent to the courthouse to satisfy that one as well. She said that because a trustee for wage garnishment was filed its separate and that’s why a new docket number was created but didn’t understand why it wasn’t closed when the other docket number was with the satisfaction letter or why it was put in as a judgment.
Afterwards, I had called the clerk’s office (again) to confirm what was filed against me and was told the same as previously. That there were three judgments and of the three two were settled. I asked if one was put in for a trustee wage garnishment and she said yes but that it is under a judgment and would not need another docket number. Clerk’s office also mentioned that the attorneys that come in to file what they file and if it is not mentioned that a docket number exists that a new one is created. I asked if there was anything I can do on my end and was told to just call the attorney.
So now my questions are:
Will the third open and unsatisfied judgment affect me and my credit even if a letter of satisfaction sent to satisfy it?
Does it make sense for Salomon & Salomon to send a letter of satisfaction for the unnecessary judgment they entered or can something else be put in such as vacating the judgment so that there wouldn’t be three judgments against me?
Siri – If it were me, I would follow up with Salomon and Salomon and demand that the judgment entry at issue be vacated as it creates an unfair representation of the debt at issue. The judgments on your credit report are damaging enough. You do not need a third one showing up. Perhaps there is a way for those to be consolidated in the court record, but that is something to be answered by an attorney with this type of experience in your state.
I would file a formal complaint with the CFPB, AG, and state bar, if your follow up discussion does not lead to the correct resolution. I would indicate same to Julie by posing a question like: “How is filing an unwarranted third court action that results in an additional judgment and harm against me not considered an unfair and abusive collection tactic”?
Update for update: Hopefully this clarifies things a little better after going back and forth with the court and the attorney. Solomon & Solomon had filed a trustee to attach wage against the original judgment they had already filed against which had turned into a judgment by default. I spoke to the court and was told that when that is filed it could have been filed on/with the original judgment but per their request of how they filed it; a new docket number was created. Therefore, there are two judgments for the same credit card #, attorney file # and with different docket #’s (123 / 456).
So, I called the attorney again but was not satisfied with the answer I received. They are willing to vacate the trustee wage attach judgment/docket 456 that we had attended court for where a settlement of agreement was made, paid for rather than the original judgment/docket 123.Not satisfied, I asked for the original docket # to be vacated, the letter of satisfaction be corrected and to send one out to the court and myself. That they can have that original judgment reflect to the new one (trustee to attach wages) in which they refused saying that it’s been satisfied but can vacate the unsatisfied judgment.
But what they are saying does not make sense to me. Both parties attended court for that one docket #. The check sent/received of payment was noted for that docket #. So how can the original docket 123 receive a satisfaction when they themselves told me that the new docket 456 had to be created (trustee wage attach) because they were suing against the original judgment? Their response to this is, that is how it works here in Massachusetts and since the original docket 123/judgment was satisfied that the second docket456/judgment (trustee to attach wage) should’ve been dismissed and will send in a letter of satisfaction. But if I want them to put in a motion to vacate, it may not even be heard, it will take quite some time because of paperwork and the need to schedule a court date.
I’ve called the courthouse several times for advice and the best advice given was to contact the attorney. I called the attorney and get the run around or what it seems to be. Would you know if I can put in a motion to vacate since the attorney is only willing to vacate the same judgment/docket456 that we’ve already settled and is paid off? The motion would be to vacate the original judgment/docket123 that I did not attend court for yet it was satisfied from judgment/docket 456 (trustee to attach wage). Reason being, satisfaction was made to the wrong docket #. The original judgment/docket123 was satisfied from 2nd trustee to attach wage judgment/docket456 where an agreement of settlement was made and paid. Adding to the motion, I want the attorney to correct their letter of satisfaction to have the correct docket # (456) and for it to reflect to the original judgment/docket123.
Or can I not vacate an already satisfied judgment/docket# that should not have been satisfied and instead vacated by the plaintiff because of the settlement?
Can you please send to me the direct link to this as well because I cannot locate it to update and thank you.
Hi Siri. Thanks for posting this update. You will want to speak with an experienced consumer advocate attorney in Massachusetts in order to get the most informed advice on how the courts operate there. But it would be inconceivable to me that Mass would allow for multiple entries of judgment related to the same civil collection action that would create double jeopardy entries in the courts, and on Mass residents credit reports. Are you in the Boston area? There are some great resources I can encourage you to connect with regarding this.
I am not sure what you are asking for by way of a direct link? Are you referring to your very first comment on this site?
Got a subpoena for deposition duces tecum in aid of execution to got to the attorney’s office for a credit card debt that that a collector (the same attorney’s company) is willing to collect. Checked credit report and there is a judgement for such. Never got any paper for that judgement filed in 2007. Date for presentation to deposition is 10/25/13. Thinking on file a motion to extend time and settle debt with collector.
If there is a judgement, I guess there is no statute of limitation, right? Also, will it make sense if request proof of debt thru court being that there is a judgement in place? Or just go and settle the debt with collector? Please help
Abraham – There are statutes of limitations for judgment debt. They are state specific, and can often be renewed. What state are you in?
The normal process for requesting proof of a debt does not apply in this situation. But you should be looking at the court record for when you were supposed to have been served the lawsuit and at what address. You are looking for anomalies for the service address not being one you ever lived at, or had not lived at on the date the court record says you were served. There are examples of abuse of service around the country. Your case may fall within one of these areas, like in New York. Where do you live?
You certainly can negotiate a settlement for judgment debt. The savings from settling is often not going to be nearly as good as settling debts when there is no judgment. How much are they trying to collect? What is the name of the collection law firm?
Michael,
Thank you for your reply. The state is FL. Judgement was filed 11/09/07 and updated 01/08/08. They are trying to collect $6,750.73. Original amount was $3,722. Should file motion for enlargement of time due upcoming deposition 10/25/13 and then negotiate a settlement?
If anomalies in court records are found, what is next? Should do this before negotiating and after filing motion for enlargement of time?
Thank you,
Michael, question is if need to file an extension, then look for anomalies on court records, hold on to negotiating debt, if anomalies found, then what? If not, negotiate?
Thank you.
Abraham – If you find discrepancies with how, who, or where the lawsuit was supposed to have been served I would recommend you connect with a consumer lawyer that specializes in debt defense to seek vacating the judgment. It can be difficult to do after so many years, but it would be something the attorney could advise you on. It would cost money to retain the attorney, but probably less than it would cost to settle. If that approach is a no go, you would be looking at negotiating a settlement, and before the asset hearing if you have concerns with that.
Thank you Michael for you advise and service to the community.
Question- I had an account with Discover who sent my file to an attorney. The Attorney filed a suit and served me with a summons… at the time I was moving so I lost track of the paperwork. I recently called the attorney and as to make payment arrangements, which they sent me a packet, to be notarized with very detailed questions about me, and my assets (of which I have none) and since I am self employed what my clients owe me etc. The paperwork has me very nervous, and I don’t want to do anything that might come back to bite me. Help?
Evangeline – How much is the debt being collected? What is the payment amount being agreed to? I have direct feedback to offer, but will be able to be more helpful if you can answer those questions.
Hi,
I am a full-time student, unemployed, with 3 kids. I have a judgement against me for an old credit card, and just received notice of execution from the Sheriff’s office. I did file a claim for exemptions and I believe all of my personal property should be safe. My concern however, is my bank account. The only source of money coming into that account is from child support (which is supposed to be exempt), and every 6 months I receive federal financial aid (student loans). Can they levy this? What should I do?
Thanks!
AJ – I have helped people with enough collection problems over the years that I suggest you keep as little cash in your bank account as possible until the judgment debt is resolved. Even funds that are exempt, while protected, are a PITA to get back if they are inappropriately taken through a levy. There are improvements to banks recognizing accounts that only have funds deposited from exempt sources, like social security, but you are not dealing with that.
Bank levies tend to occur at the beginning, middle, and end of the month. Have you considered some creative options like loading the funds on a low cost prepaid card?
A debt collector won a default judgement against me for an old credit card. They offered me monthly payments, I countered with a one lump sum payment if they took 1k off the price. I have never heard back from them. I made a second attempt at reaching out to them, and have still never received a response. It has now been one year of me not hearing from them. I’m worried that the amount is growing from interest during this time. Not sure what my next steps should be.
Jodi – Who is the debt collector attorney that sued? Who is it that sued (name of plaintiff)? What is the amount of the judgment?
Judgment debt can grow from the interest. Most states cap interest, but some allow contract interest. In either case it is best to resolve the issue as quickly as can be managed. I can offer more feedback and suggest some next steps once you post a comment reply with answers to my questions.
I sold my house in Ohio on a short sale in 2011 – the deficiency was $100,000. (I was single) a few months ago I was served with papers being sued by Asset Acceptance. (I now live in Michigan and I’m married). AA filed a motion to dismiss w/o prejudice – twice – so my attorney – filed a motion to dismiss the case with prejudice due to the fact they had dismissed it twice before. The attorney filed it before the court date …….. but failed to request a court date (which you have to do in Michigan) so AA moved for a default judgement against me. My attorney counter-filed – and now I have a court date coming up – stating why I didn’t show up for court – since I had already filed a motion before the court date – and asking for the case to be dismissed with prejudice since it had been dismissed twice before w/o prejudice ………………………… have you ever heard of anything like this before? IF none of this works ……….. do you think AA wou ld settle for a lump sum of around $20,000 on a $100,000 debt? I could probably borrow that from someone and I just want this to go away.
Annie – I am sure there is more to your attorneys strategy for getting this dismissed than just because it had been before. But if those arguments are not successful, yes, you can indeed get this settled. Whether or not you can get it done for 20k, I cannot say. It can depend on how collectable you look to them on paper (paying other creditors on time, other assets, etc).
Post an update with how this all shakes out and lets go from there.
Thank you soo much for your response
The thing is – my attorney is an estate planning attorney that we use here at our business – he is not a consumer debt attorney. So – I’m not banking on this getting dismissed. I have paid off any other debt I had – and the only debt I have is a credit card for hearing aides – that I’m paying on time – and since I got married – my husband and I bought a car together for me – that I am making the payments on. We do not have any joint accounts and my name is not on his house or anything like that. So aside from my checking account and the fact that I paid off my other debt and I have a new car – which – if I sold – I would actually owe money on. Is there any possibility they could go after my husband?
Annie – A judgment would be required before they can go after anything. You can certainly head that off a couple of ways. It would be a good idea to connect off line so I can get some additional details in order to offer the best feedback and additional things to consider.
I sent you an email with my direct number in the signature line.
Hi Michael,
Not sure if this question is up your alley, but figured there’s no harm in asking. I have a handful of judgments (creditors and other civil items) as well as federal tax liens against me. As a result of a medical misdiagnosis that severely impacted my life, I am about to receive a moderate settlement from the physicians insurance company.
Is it possible to protect the proceeds of the settlement from being taken or frozen while I work out some kind of appeal, compromise or reduction with my judgment creditors and lienholders ? Should I set up a trust, have the payment made to my wife or other family member, etc ?
Thank you in advance for your advice. Very happy that I found your blog / website.
FM
Frank – It would help to know what the judgments are the result of (credit cards, other civil actions), how long ago they were recorded, the nature of the liens (some money judgments automatically get recorded as a lien if you own property in the county), and other details. Perhaps it would better to negotiated the settlements on the judgments, and have all of those ducks in a row, prior to receiving the insurance settlement.
Then there is the IRS. I would not recommend getting too creative here. You should talk with a tax pro about your options, but the insurance pay out is going to complicate things.
Is the settlement you are set to receive enough to pay off tax liens? If so, is there enough left over to settle the other judgments for say 50%?
Are there reasons that you would not file bankruptcy (own property with equity and other non exempt assets)?
I have a judgment that needs to be settled and I wonder if you can help me negotiate with the bill collector. I may be able to pay it soon. xxx-xxx-xxxx.
Hi David – I edited out your phone number for your privacy. You can call 800-939-8357 and choose option 2 in order to connect with me.
I had a judgment against me for a Capital One CC in 2008 in Illinois. (I had hired an attorney to represent me in court so that this would not happen but he did not show up so the judgment was rendered.) I haven’t heard anything about it since 2008, then this week I received a letter from Blatt, Hasenmiller, Liebsker and Moore stating that they were going to court on 10/28/13 to get an order to garnish my wages. I am with a new employer and I want to avoid that. The original judgment was ~$2400 in 2008 and has ballooned to ~$3900. I called BHLM and offered to pay the original judgment amount in full, right now, but they told me no, I had to pay the $3900. They also said they already contacted my employer to find out if my wages can be garnished. I was not notified of this. Is this legal? They told me they would accept 2 payments for the $3900 but I don’t even know if that is the correct amount. Is there a way to find that out? Thank you.
Brian – Get a copy of the judgment that was entered and look for what the judgment interest was set at. Calculate the interest rate against the balance and the length of time the judgment has been growing. My guess is that it will be pretty close to what they are trying to collect on right now.
Most states cap judgment interest somewhere around 10%, but some allow contract interest to be applied (which is terrible). What state are you in?
Thank you for your response. I’m in Illinois.
Can they contact my employer without my knowledge to find out if they can garnish my wages? They said they did but my employer has not notified me.
Okay. Illinois judgment interest is capped at 9%.
Yes, they can. Often the first notice people get on something like this is the forms from your employer.