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
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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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.
I am judgement proof because my only source of income is Social Security and I do not own any real estate. But never the less I accumulated approx $30,000 of credit card debt.
I am resident in California and most of that debt has timed out under California’s rules because my last payment to those credit cards was in September 2012. But Bank America, through FIA Services did go through a suit and did obtain a Judgment for $3,000, and that still stands as being open.
I did not attempt to settle with them previously as it was my opinion that if I had settled that Judgement I waould have alerted the other creditors to the fact that I might settle with them if they got a Judgment also. I don’t know if that was sound reasoning, but that is why I did not settle things up with them previously.
I have read a fair number of postings on this site and by reading those cases I understand that it is likely that as the Law Firm has attempted to collect on their Judgment for the past two years and they have gotten nothing for their efforts… It may be that now is the time to negotiate a payment, so as to settle this Judgement. My Question is : Can Your Service handle this negotiation for me?
CRN, and yours truly, stopped offering paid coaching and negotiation services to the public some time ago. You can still connect with a couple of the CRN specialists though. Fill in the the contact box in the right column and submit. I will get that over to one of them, and they can consult or work with you independently. I can also highly recommend Jared Strauss from AvoidBK. You can learn a bit more about him in this interview I did with him: https://consumerrecoverynetwork.com/former-debt-collector-helps-settle-credit-card-debt/.
For clarity, when were the last payments made on any of these accounts? One way I read your comment is to imply you last paid on these accounts in 2012, and not just that there was a judgment with FIA Card Services entered at that time.
I have recently become aware that I am being sued from discover for $7000. I do owe this debt and must admit that I have ignored many of discovers phone calls in the past due to lack of income which I know was a mistake because now the debt has obviously been passed to an attorney. There was a certified document sent to me which I have not yet picked up due to my work schedule and they need me present to receive these documents. I contacted the post office to see if they can hold the mail a little longer and they informed me they cannot do so and will be sending it back to the magistrate today. I know what this is about because I received a letter in the regular mail from an attorney stating there was a class action against me and they can help declare bankruptcy. The problem is I really don’t want to have to do this if I can help it.
I called discover to see where the debt was sent and called the attorney’s office. She told me my options and I think I’m going to have to go with a payment plan. The truth is I’m scared to death and embarrassed about this whole situation. My main question is…will there be a constable coming to serve me with these papers or can I request to have them sent regular mail so I can actually receive them in a timely manner? I already know the court date is set for next week because that’s what the attorney’s office told me. I just don’t know where to start.
It sounds like you want a payment plan. Just know that they will want you to consent/stipulate to a judgment anyway. Did you talk about what you can afford to pay? Have you thought about how you might be able to pull together half-ish of the amount owed in order to try to negotiate a single lump sum payoff (and avoid the judgment all together)?
I do recommend you connect with an experienced debt collection defense attorney. Most attorneys practicing in this area of consumer law will offer a free initial consult to cover the basics, and your options once more about your situation is known. I can help you locate an attorney or three to talk with. Post the name of a nearby larger city.
Hi Michael – I spoke with you a few years ago. I just wanted to follow up and say you truly changed my life. I was gripped with powerlessness and fear prior to our conversation, which you have no idea how much that meant to me at the time, and I realized you were not paid to do. What you do changes lives and I thank you.
In case anyone is interested in how our debt went and what we did as we followed Michael’s advise here goes. To give a quick summary of my problem during our move my husband was nearly killed in a truck accident. He went months without his employment because he worked manual labor and we fell behind on absolutely every bill and stopped paying about 5 credit cards. About a year and a half after we stopped paying two of the Capital One cards sued us. At that time, after speaking with Michael, I called and settled both for about half the amount. Oh, good mental note! We were also sued at the same time in another state for the exact same bill, so that collection agency had sold the debt AND sued us anyway! Ugh so Michael advised me to send the court a letter stating we do not live in that state, they do not own the debt, and demanding the court drop the suit, which they did. So, then there were 3 cards left. I was sued by another about 3 years after I stopped paying on the card and settled for monthly payments for 10 months (Capital One). Now I have two left and will be calling them to make payment arrangements now that we are in recovery mode and appears we will be keeping our home as well.
So, I just wanted to give a heads up that you gave me the courage I needed and your advise was incredible to me, you are a very kind man and thank you for all that you do. If there is ever anything I can do for you please let me know.
Tracy – Professor in Florida 🙂
Thanks for posting that Tracy! You made my day.
I stopped taking paid files in the earlier part of 2013. One of things I miss most are the exit interviews I personally did with all CRN members the last few years. It is the most rewarding part of this work, and why I continue with this stuff.
Just pay it forward. If after all your debts are totally resolved, and you have a little extra to give, think of this site if you donate to your local low income legal aid office, or to your local food bank (in the form of non perishables).
I went to a debt relief source after I lost my job and was going through a divorce approximately 18 months ago because I was left with all of the unsecured family debt since I have possession of the home due to domestic violence. The company contacted every creditor listed and told them that they would be negotiating my debt. They have done a good job thusfar and Im more than halfway out of debt. Now Capital One is suing me for a very large sum (we used it to help put my son through school) and I have obtained a lawyer but I dont want to be naive about what is happening. Im in Pennsylvania and it is my understanding that they can take my savings account (I dont currently have one) and maybe my car (my parents purchased it so Im titling it back to them asap). The house is in both my ex husband’s and my name and he isnt on the card (he had me take it out in my name years before the divorce). I want to make payment arrangements independent of the debt agency to get this monkey off my back but Im trying to understand what is going on and what I do next.
Where is the lawsuit at as far as progress (answer to summons filed, discovery, pretrial)?
What amount of money do you have in escrow for the settlement company right now, and how much are you adding to that monthly?
Is there anyway you can tap additional resources in order to offer a lump sum settlement to the Capital One attorney, as opposed to setting up payments?
What has your attorney advised?
Hey Michael,
Yesterday I recieved a phone call saying that I had a credit card that I had stopped paying on in 2008. They say they are sueing me and taking my bank account if I don’t pay either 403 by oct 23 or I can 100 then 50 a month totaling 1200 or pay over 4000 if it goes to court. I pulled my credit report and there’s nothing on there. Do I pay them or is this a big scam? They said they would email me a settlement letter and I still haven’t gotten it. Please help I’m in Va.
Nichole – Threat of lawsuit and taking your bank account immediately raise my concern you are being contact by a scammer. But you could also be dealing with an very poorly trained debt collector.
What is the name of the collection agency and the phone number they called you from, or provided to you for use in reaching them?
They didn’t give me a name for them but did give a phone number to return their call 866-664-6473. They are telling me first bank of delaware is who bought the debt. however I did pay the first $100 and it’s coming up as american acceptance pueblo west co. Should I contact my back and cancel that charge it’s still processing
Scam alert there. If you simply look that number up you will see a LOT of red flags and similar stories. Michael is probably far more qualified to comment in depth on whether they could have an old, but real debt or could do something about it, but garnishment or suing takes a lot of work and these people seem like they are looking for a quick buck. I would contact the bank ASAP and get something in writing if you really suspect you owe something. Nobody but scammers put on the “you must do this immediately” pressure…
I would cancel any payments immediately.
I HAD CREDIT CARD 2001 AND I NO LONGER LIVE IN NJ I JUST MOVED TO FL AND THEY SENT PAPER WORK TO MY OLD ADDRESS CAN THEY SUE ME STILL
When was the last time you made a payment to anyone on the account at issue?
I just found out couple of weeks ago
It’s it a bad idea that I agve them my job address
I would not have given my job address. But that would be because I would not want my employer receiving my personal mail or phone calls.
You did not answer when the last time you made a payment on this debt was?
Hi Michael, I had a credit card debt back in 2007 that I did not pay due to financial hardships. I let this go for years thinking that they would not ever collect which was a bad mistake. I was recently told by my employer that Garnishment would start on my next check. A default judgement was given to the creditor (CITI). They did not personally serve me and the first I heard of the lawsuit/ garnishment was with a letter from my employer advising of the garnishment starting.
I submitted my reply to the garnishment and requested a hearing. I also submitted a motion to vacate the garnishment due to not being served and not having a chance to reply/respond. I also mention that the original debt was about $6k and now the default judgement is about $16k. What else can I do to stop the garnishment or better yet, settle with the creditor for a smaller amount? Taking 25% of my paycheck for the next 3 years will really hurt me. (single, no children). Hearing will be in a few days.. waiting for the court date. Thanks for the help.
Judy – In situations like this it can be so worth the cost of having an attorney assist you. The type of attorney that has deb collection defense as aprt of their practice will typically offer a no cost initial consult. Let me help you find one to speak with. Just post the name of a nearby larger city.
Was Citibank the named plaintiff in the judgment, or is it another name (like a debt buyer)?
good day. may I know what is in chapter 7 & 13 bankruptcy? where can I find to learn from it. thank you very much.
From your earlier post, I know you are in the Philippines. Are you looking at filing bankruptcy in the states for debts incurred here? Do you plan on returning to the US?
my bank account was levied two days ago by Moore Law Group. I am not sure which creditor they are representing as I have not paid on any of my old credit cards since 2007, in 2008 I lost my home to foreclosure when I lost my job. Is there any reason to try and fight with Moore Law Group to try and get these funds back, or let them take it and just keep funds in someone else’s name. Can they take your car if it is paid off?
thank you
What state are you in?
Michael,
First, my first posting wAs deleted. Just wondering why…
Anyway, this is my dilemma:
I am in Missouri, the suing firm is Gamache and Mayers, plaintiff – Capitol One, debt $2300. I received summons for October 27. I was aware it was coming because of the earlier mail from other lawyers offering help. I contacted the reputable attorney to see if bankrupcy was a possibility because of other debts, mostly medical bills from breadth cancer and other problems. To make it short it is not the option right now for numerous reasons. My question to you is, should I contact the plaintiff attorney to try to settle before the hearing or wait till then and settle in court? I would like to offer lump sum payment but can only effort about $1500-1700. Do you think that sounds reasonable? My gross verifiable income is only $1100/month. I am getting 15% of that garnished already for student loan debt. I am trying to read and educate myself how to deal with this and just cannot figure it out if there is any advantage to call the suing party before going to court and discuss settlement. They did attached the note saying to call them if I “would like to arrange to pay debt”. Would you please help me to decide and maybe present both scenarios.
Thank you so much,
Agnes
Your original post is still above. You posted as Suzie.
If it were me, I would call and see if I could settle with Gamache and Mayers and get the case dropped. I would want them to know about the garnishment I have for other debt, and that they would be in line waiting to get paid for a long time.
If I could not reach a deal, I would work with a consumer law attorney, or legal aid office, answer the complaint and buy myself several months to come up with more money for the settlement.
Thank you Michael.
What do you think would be reasonable settlement? Do you think it makes sense to try for $1500. So maybe I can end up with $1700-1800.
If this is Capital One suing 50 percent may be as good as it gets. 60 percent is not a bad outcome to negotiate, and would be the more realistic target. If the lawsuit is for 2300.00, I would start at 1100 and work up a bit.
You do not have to reach a deal to settle on that first call.
Hello Michael,
I have been suit for cc debt by Capitol One. The plaintiff attorney is Gamache & Myers, am in St. Louis Missouri. I knew about this for about two weeks as I received letter of “help” from not related attorneys. In the meantime I seeked advise of reputable lawyer as I was wondering if I should file bankruptcy since I have few thousand in medical bills also which came from numerous health issues breast cancer included. Anyway , the debt to Capitol one they are suing for is $2300. The court date is Oct 27. The summons came with note attached to it from Gamache & makers saying that I could call them if i ” would like to arrange to pay debt”. My question to you is (if you don’t mind advising me) should I call them and try to settle or wait till we are in court. I would like to try to pay all but cannot all $2300. I was hoping to negotiate about $1500-1800. Btw, bankrupcy is not right now as I am separated and have other complicated issues. My verifiable gross income is only $1100 per month and 15% of that is oak ready garnished by student loan debt. I have been reading your blog everyday trying to educate myself how to deal with this but still would like your advise. Is there any benefit to me to call Gamache now or better to wait to court date? If I should call them should I insist on talking to the attorney instead collection clerk?
I appreciate your help,
Susie.
Ideally, I would try to connect with a legal aid office in your area first. You may qualify for help at no, or low cost.
If you call today,and share the details of your financial hardship (limited income, separated, already garnished for student loans), it is possible to settle for half=ish. My experience is that you have better odds of getting lower settlements once you answer the complaint.
Calling and talking to a paralegal, or the collection support staff, when your goal is settling, will often lead to the same result as talking to the attorney for CapOne. There are certainly exceptions to that though.
I only have two emergency room bills on my credit report.
If those medical bills are showing as unpaid collections on your credit reports, you will have a better shot at getting approved for new credit when those are updated to show resolved.
I do like the credit product and credit score matching system over at credit.com. Check that out when you are ready.
Thank You for your informative reply. I was also wondering since i settled and paid delinquent credit debt do you think ill be approved for another major credit card in the near future if i apply?
Were there other recent collections on your credit reports, or was this the only one?
i was about to be summons to court for a 1700.00 dollar hsbc credit card. the original amount was 1400.00 but they tagged on court filling cost. I called up Cach collection who refered me to third party Scherr and Mcclure attorney collections who now has debt and settled and paid 1200.00 i am still waiting for funds to clear as i paid over phone with debit card. ( i was relunctant to use my debit card for fear i was being scammed) they emailed me a settlement proposal and said after funds cleared they would email me a settlement letter and report pay off to hsbc. Im am wondering first if i will be taxed the difference of 5000 from irs and since i paid it off will this improve my credit score. and also if i write to credit agencies challenging these accounts were creditors have to proove accounts are mine and they cant or dont, and accounts with debts are erased; can creditors still sue me in court if debt is not on credit report. oh and since i paid it off you dont think thed try an sue me again over same debt do you?
Virtually any forgiven debt that results in more than 600 dollars of savings to you can be taxed as income (except in bankruptcy). See this article for more details: https://consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/.
You can send credit report dispute letters. There is indeed a requirement for your dispute to be investigated by the bureaus. If they do not get any response to your dispute, they will often remove the item from your credit report. The communication with the company sending them information is often just electronic pinging, and while proven to be flawed, it is still the primary way disputes are investigated. I would not rely on credit report disputes to deliver improvements when the information showing on your credit reports is accurate and current, and just negative stuff you want deleted early.
Creditors are not prevented from suing you by credit reporting laws. The time they have to sue is governed by state law. What state do you live in?
If anyone tries to collect on this debt after you have negotiated and paid the settlement, let alone sue to collect, post an update and lets go from there. It should not happen, but if it did, it would be due to mistake and quickly fixed.
i just pulled a copy of my credit report for the first time in many years…i knew it looked awful and simply stuck my head in the sand, quit using credit, and quit using banks at all.
I decided it was time to be a grownup and deal with the mess, and started looking…i discovered that apparently Capitol One successfully filed a judgement against me back in 2007.
I have no idea, at this point, who holds that debt, or what the process would be if I wanted to pay it off. I don’t even know who to start contacting.
If I did anything on it now, I would have to make payments on the debt. Would it be better for me to simply wait until I have enough to pay it off in full, and then start contacting people? Or should i start contacting them now and see if they would accept a payment plan? And, in this case, who do I even call? The courts? Capitol One? All I have is the info listed on my credit report, which doesn’t include any contact info at all….
I’d like to make it right and make up for the mistakes of my past self…but I don’t even know where to start, and the silence on this has been deafening for all these years…
Suggestions?
What state do you live in? The answer could tweak my feedback.
Generally, start by contacting Capital One, as the attorney they used may not even be part of their network any longer.
I would not look to establish contact now if you cannot follow up on anything other than payments, unless you are concerned about wage garnishment, or a bank account levy. Instead, I would wait to have, or have immediate access to, about half of the judgment balance.
Be prepared for the judgment amount to have grown with the interest set by the court.
Are all of your debts that old?
I’m in Alabama.
yes, all my debts are that old, to where most have fallen off my credit report entirely. This one is actually set to do so near the first of next year, so I’m kind of glad I caught it rather than be surprised later.
I figured there would be interest added on, Alabama caps at 10%, so worst case would be about $2000 on the $1200-something they won judgement on. I’ll prepare for that and make sure i have funds available before I reach out to anyone.
I’m only concerned because I just recently financed a car (as in, last month) which means that things pinged on my credit again, which might have them crawling out of the woodwork to contact me. This is actually the SECOND judgement I found, the other appeared in the form of a letter from an attorney’s office talking about wage garnishments. I’ve already made settlement and payment on that, which is why I have no more chunks of cash laying around to settle this one.
i must say that i’m baffled and bewildered, mostly because I never remember getting served with any notices for court dates….but at the same time, that was an awful period in my life, and I lived in a horrible apartment complex with scumbag neighbors. There’s no telling who they gave paperwork to who would never have bothered to inform me about it.
Hopefuly I can get all this sorted out soon… 🙂 I’d like to actually have a functional credit score at some point.
Your well on your way to improved credit with the amount of time that has passed.
The other debts that did not end up in court will have passed the SOL to legitimately sue, so there is less a concern you wake those bee’s to buzzing. But the judgment creditor is another matter.
How long will it take to save up what you need to offer 50%-ish?
Absolute worst case, for me, it would be sometime in December…my company offers a Christmas bonus each year that should put me well in the way to be able to offer half, if not the entire amount. Would be nice to actually use that for Christmas, but would be nicer to not have this hanging over my head….
I’m a commissioned sales rep and never have two paychecks the same, so not sure if I didn’t count on the bonus money…we’re getting into busy season for my industry, so maybe 3-4 months or so if things go well.
I think it’s close enough that I’ll wait and see if anything nasty shows up in the mail, and if not I’ll attempt to contact them as soon as I have cash in hand.
Thanks so much for the quick responses!
Best of success!
Messerli and Kramer filed suit for a capital one account back in 2010 and received a judgement against me on a $500 credit limit for $1700 which they are adding interest to.. They claim they represent capital one and are not debt collectors. I am also receiving notifications from a debt collector called Portfolio Recovery Associates. The attorney is not willing to negotiate, however the collector is offering less than half the judgment amount. If I pay the collector, can I show this a proof that I have settle the judgment? I’m trying to purchase a home and the attorney is refusing to settle and wants full amount.
That judgment in the court record would trump anything Portfolio Recovery Associates is trying to collect. You will need to deal with that (getting the court record to show the judgment is paid/resolved), in order to move forward with your home ownership goal.
Just because Messerli and Kramer are an attorney firm does not mean they are not debt collectors. They are.
The other collector, Portfolio Recovery Associates, has a bogus debt they are trying to collect, if they indeed bought the Capital One debt you were already sued for. I would file a complaint with the CFPB about the bogus debt collection from PRA here: https://www.consumerfinance.gov/complaint/. Your complaint should target PRA, but also include Capital One if they sold a debt they should not have. And there is no other explanation if Meseerli says they work directly for CapOne, while PRA is a debt buyer.
Let the CFPB help you get to the bottom of this through the complaint process, while helping them to add to the stack of reasons to regulate the process of debt collection and debt buying much more actively (which they are smack dab in the middle of writing new rules for).
The attorney debt collector may be holding out for all of the money if they can see your credit is being run for the purpose of obtaining a home loan. And there are other reason collectors will hold out for more, or all the money owed. You may just look highly collectable. But I suspect the latter.
I had a default judgement against me in Jan 2008 for a Providian credit card. The lawyers involved were Erskine & Fleisher. I live in Florida. I was making monthly payments but when I retired I called and asked for a reduction which they refused and I just couldn’t keep up the payments, they then filed suit. I believe the total is now around $4 or $5,000. They tried to levy my bank account but because I only had social security it was exempt and being retired they had no wages to garnish. I am however concerned that in the next few months I will be paying off my car and wonder if they can seize it. I have read cases where the sheriff just shows up with a tow truck and they take the vehicle. I can’t afford to replace the car and also wonder how much I should offer to settle the judgement. I recently lost my daughter to ovarian cancer and have a little money left from her insurance.
Florida has a 1,000 dollar auto exemption. There is up to 4k more you can apply to exemptions on your car, but that additional amount would likely need to be left over after covering exemptions on your personal and household stuff.
An older judgment like this I would target for settling at roughly 50%.
Dear Michael,
I have had a judgement against me for nearly $5000. I have signed a payment agreement for $200 per month, but after making 4 payments of $200, I have saved up about $3k and would like to offer them that as a settlement. Is it too late because I’ve already signed an agreement saying I’d pay $200 per month? I figured it’s be better for them to receive a lump sum than to have a payment stretched out over forever, but I just want to know how likely you think the attorneys are to settle at this point.
Thank you in advance for your wonderful advice!
If you call them to renegotiate a lump sum pay off, I would approach it as something like:
“Back a few months ago I did talk to some friends and family about my situation. One who could not help much, suddenly offered to. I can get you 3k to settle the judgment right now” – or something like that.
Debt collectors tend to want to get paid sooner rather than later. Judgment creditors won’t always act on good settlement offers, as they have leverage.
Post an update with how you progress.
Michael,
Thank you so much for your swift reply and great advice. I’ll be sure to let you know how it turns out!
HI, got a call from a debt recovery center today that said I owed $1100. and the original debt was to capital one. I did have a card and was unable to pay it due to to much going on financially at the time. the original debt was 500. . I don’t recall being taken to court for this or summoned. This was from 2002. the person that called me today was rude and did not want me to talk and told me if I would not be quiet then the call was over, I was telling them that I didn’t know for sure if they had the right person because I didn’t own that much. And was questioning the time since it has been 12 years naturally I didnt recall all of the details. I am wondering if they can garnish my husbands paycheck or take our truck . we don’t have a bank account as his check goes straight to a debit card from his work and my name isnt on the account. i have a secondary card from them but it has a different account number. I plan to pay this but we have little income, I am ill and cant work and my husband is ill but he is working so money is really tight. thank you in advance
I am first inclined to believe this is a scam debt collector. The name “debt recovery center” rings a bell as a company name used for this type of scam recently. And legitimate debt collectors do not tell you shut up or the call is over.
Do you have the number they called you from on your caller ID?
yes I do. it’s 620-860-1566
Every thing I found related to the number speaks to over the top debt collectors.
I would encourage you to file a debt collection complaint with the CFPB here: https://www.consumerfinance.gov/complaint/.
Be as descriptive as possible in your complaint. Give details about the conversation, and even to the minute, the date and time of all calls.
Please post an update here with any outcome.
I do not think you should let this bother you, but always get this kind of stuff in front of someone in a position to look deeper into it (like the CFPB or a state agency).
thank you very much! I will contact them and post my update here.
I had a judgement placed on me in 2011. arrow finacial servered a relative who did not live in my home and they also did not tell me about the served papers. I found out about it when applying for a job that i never could get due to the judgement..I have spoken with LVNV and i have to come up with 700.00 by friday the 26th to settle this debt. I have two questions one can lvnv enforce a judgement that arrow finacial owned and two should i have the settlement offer notorized?? This debt was actually from 04-05 i was a teen and had no idea what i was doing with credit but this is so old i just dont understand how they can keep on trying to collect, however i do understand the judgement thing i just didnt know they could place one after so long. this debt was sold not only for peenies on the dollar but over and over again.
It is not all that uncommon for judgment debts to be sold like other debts. What you are dealing with is something many have worked through in the comments of this piece about Resurgent/LVNV buying up most of that Arroow Financial portfolio.
You do not necessarily need the settlement agreement from LVNV notarized. Was there space provided for a notary in the agreement to settle that they sent you?
hey i am currently 21, when i was 18 i had the dumb idea of opening up a credit card for a jewelry store. long story short i fell behind on payments, lost my job and could no longer afford the ring. i only owed about 100-200 dollars at the time, i attempted several time to contact their customer service to explore my options. i even showed up at the store to see what could be done. at that point i was told i could voluntarily surrender the ring so i attempted to do so with no success since it was “set up” according to the clerk. now 3 years later with no warning a collection agency is contacting me telling me i’m being sued for $1200.
i am a full time student, pay my own school, live at my parents house and work full time to afford my education making minimal money a month (about 13 dollars an hour) is this right? i’m being threatened with not just court but all of their attorney fees and more. i’m not sure of what the best step to take here is.
Debt collectors calling and threatening lawsuits is currently not the reliable signal you are about to be sued it once was.
1. A legitimate debt collector threatening to sue, who then does not sue, could be violating federal and often state collection laws. So legitimate collectors will reserve that type of intimidation (that is what the threat is after all), and use it only when they are ready to file in court.
2. There is a rash of debt collection scams happening nation wide where a scammer some how has access to information about legitimate unpaid debts, and is acting as a debt collector to get you to pay, but they do not own the debt.
3. There are debt collectors that just push the limits and step over the legal line when trying to get money from folks.
I would talk to a consumer law attorney in your area about your situation. You want to speak with one whose practice regularly deals with debt collection defense AND FDCPA violations (fair debt collection practices act). What is the name of a nearby larger city?
A friend works with defaulted student loans. He said that they are not permitted to garnish someone unless they have been employed for over 1 year, and figured it would be similar for other garnishments.
If I am garnished, will I get a letter warning me before the garnishment takes place?
Student loan collections operate a bit differently, and even then I think something was lost in translation.
You can get notice of a garnishment, and it is often going to come from your job. That notice will often provide you information about the steps you can take to contest the garnishment. And if you meet certain requirements, you can be determined partially,or even fully exempt from garnishment.
New York protects you from judgment creditors in the following way:
90% of your wages that you were paid in the last two months, or 30x minimum wage.
NY protects up to 4 thousand dollars value in a vehicle.
Between 75k and 150k of your home value is protected – The amount varies by which county in NY the home is in.
All major household items are protected from judgment creditors (stove, fridge, more).
New york has good state laws protecting money in your bank account. 240 times minimum wage in your account is protected with an additional 1k possible if homestead exemption is unused.
I have a credit card judgment against me that was just filed a few months ago. I have been unemployed until only a month ago.
Can they garnish my wages? Or don’t they have to wait a period (a year, I heard) before they can garnish me? I was unemployed for 8 months. My understanding was that I had to be employed for over 1 year in order for them to garnish me. I’m in NY.
I am not aware of any provision in New York that prevents judgment creditors from garnishing you for a year. Where did you hear that from?
Hello Michael,
My second wife of 11 years and I are attempting to refinance pour home. Currently, the title of the home is in her name only. I kept my name off because of a credit card judgment starting in 2006 from a credit card my ex wife and I jointly had in 2000.
Our loan officer has told me nothing can be done because of my judgment showed up on the title search he did. The judgment does not show up on my credit report anymore.
Anyway, we live in Missouri and the officer says we could try financing the home in my wife’s name only (again) but he also stated that the judgment lien will still be in effect on the title, even though it’s MY judgment and I will not be listed on the title. Is that correct?
Thank you for your response.
Bill – That type of scenario can and does play out often.
How much is the judgment and who is the plaintiff?
Hi Michael, I need some advice. I had a debt in 2007 that I wasn’t aware of, could have been a personal loan my ex took out but it’s all in my name. I’ve recently received a letter from the attorney KLW office about a judgment and that they are preparing to garnish my wages. They provided a Docket Number court filing number for Los Angeles County, I looked it up and saw that the judgment was originally filed in 2008. The status is now “Disposed by Judement,” what does that mean? I have never been properly served but does it really matter? Would it be better for me to just negotiate on a discount and make payments (I think it’s about $20K now, amount wasn’t listed)? The letter does say that I may qualify for a substantial discount off my balance, but I am wondering if it’s just a gimmick to get me to call cause they haven’t been able to find me in several years. This letter was sent to my PO Box, no bank accounts or phones under my name. Please let me know, I really appreciate your expert advice. Thank you.
With judgment debt, it is not all that common to negotiate a discounted pay off amount, and get that spread out with affordable monthly payments. Settling judgments for the best savings is best done with a lump sum payment.
How much money can you pull together over the course of the next month or two?
Never having been served can matter. But post what you can raise to settle first.
Thanks so much for your quick reply. I noticed that they have the wrong employer’s name for garnishing wages, I assume it’s only a matter of time before they will find the correct one. I’m getting an end of year bonus in Nov for about $5-8K which I can pay. How does not having been served matter?
Continue to save up, and add what you can to the money you have coming end of year. If you do settle, you may need to be prepared to pay half-ish.
Your not being served is a problem that should not be ignored. There is an attorney in your area I know who has had good success getting judgments vacated, when there are discrepancies with the process, and even when the judgments are more than a year old. You can likely have an initial consult at no cost, so the price to learn more about it (vacating basically means undoing what happened in court) is right. Let me know if you want his info.
Yes, please give me the information. I was reading through the court case summary and it looks like in 2008, they did sub-serve John Doe who was noted as co-resident. At that time I was separated from my ex but was not legally separated and was not living with him. I may have also been working out of state for a few months during that time too. Does serving my legally still married spouse at the time make it legal that they served me? I have never received nor my ex notify me of such letter.
How those circumstances will possibly play into any legal strategy to manage the situation can be discussed with the attorney I sent you info to contact.
Please post any updates with your progress.
Thank you so much for the information, I will give Adam a call. Will keep you posted as well.
Hi Michael,
I wanted to update you, I had a Motion to Vacate filed and the court date was last week but it was set up via phone and my lawyers did not come in. The judge denied my motion without prejudice. I don’t know what is next other than my lawyers telling me if they garnish my wages to let them know. I am also having a hard time getting a hold of my lawyers ever since, they charged me $1600 for this case and I feel like there is a lack of service they are providing me. I am wanting to appeal the denial but my lawyers are not wanting to return my calls nor have the answers to my questions, they keep telling me they need to talk to their boss and I get the boss on the phone and he would say he needs to talk to his partner cause his partner knows this case better; yet, nobody is calling me back unless I keep calling. I feel like they took my money and hoped that it was an easy case and then would not followup with their client. This is getting really frustrating.
Telephonic hearings are common.
Getting a 7 year old judgment vacated is not an easy case.
Appealing has its costs too. You would want to weigh that. When is the deadline to file your notice of appeal?
Thanks for replying Michael, the lawyers have not told me when the deadline is to file an appeal, if I do not file, what is the next step? Am I to wait for the other side to pursue judgement and wait for a court order to pay what I owe?
If you are not going to file an appeal, I would look at what you are going to need to settle the balance at a discount. If not settling, payment options can be established.
Those next steps are provided you are able and willing to resolve the debt. If you are not collectable (cannot lien, garnish, or levy a bank account), I would not jump through hoops to find a payment solution until you have legitimate concerns in that regard.
Thanks Michael for your knowledge.
Hello:)
My wife has a judgment on her in CA for $36k on 2008. It’s from a credit card debt from 2004(AT&T Universal MasterCard. She was never served and we only found out a couple of years ago because we tried to purchase a house. The original debt was $12k then awarded judgment was for $18k then a couple of years ago when found out about it it was up to $23k. We tried to negotiate a settlement at that time but they were basically just laughing at me. I even offered up to the original debt amount settle it but they didn’t care. We didn’t get approved for the house and gave up altogether. And just this past Monday the 8th, we received a letter from her payroll dept that her wages are being garnished 25 percent this Friday the 12th with the judgment now at the $36k.
My wife is a registered nurse and right now I’m a stay at home dad for the past 5 years. What else can we do about this? We are filing for an exemption tomorrow morning.
Any help would be much appreciated. Thank you!
Call the attorney in California (you are in CA right?), and talk to him about your situation. He has had some success in California with getting judgments set aside when there was sewer service and the like. Even when this happened more than a year ago. Post an update with any progress you make in that regard.
Get the hearing to contest the garnishment. With one income at the level I assume, and a family to feed, with a high cost of living in CA, I hope you find you are fully exempt.
Michael, thank you so much for the quick response. And yes we are in CA so I will definitely be calling Adam. Based on the info you shared I can already tell that he knows where to begin. I must have spoken to over a dozen consumer credit lawyers the past couple days and none of them seem to have a plan of attack. As far as the exemption, we should be done with filing it at court today.
Thanks once again! I will keep you posted on the outcome.
I had a call today saying i have to go to court next week for an unpaid credit card i found out which one it was and paid off. Those that mean i still have to go to court even if i paid it off.
Calls out of the blue telling you about a court date next week if you do not pay right now tend to be made by debt collection scams. What is the name of the collection outfit you paid? What was the debt for originally? Does the collector appear on your credit reports? Does the original creditor still appear on your credit?
Call your local court and ask if there was even a case filed against you in your name.
I would want to quickly try to figure out what happened here, and if need be, call your bank and stop, or reverse any charges, as may be possible for you to do.
An attorney is currently seeking my husband to serve him papers but 2 days ago my hubby received a notice from a debt collector saying they would settle for $564 out of $1881. If my hubby pays the settlement amount in full to the collector, can the lawyer still serve him papers and require even more money?
Also this debt is from before we were married. We have each have a separate bank account as well as a joint account at a different bank that has our savings (basically just $3,000 from income tax refund, most of which is mine.) Can they go after that money? Can I remove him from the account? ShouldI take that money out and put it into my separate account? How can i avoid losing that money?
Who is the debt collector attorney? Who is the collection agency that sent the settlement offer in the collection notice? Knowing the answer to those may alter my feedback about settling.
You can protect the money in the bank account by moving it to the account that only you are on. You do not have to worry about that unless there is a judgment, which you can likely avoid.
Everyone this man has contacted has asked what his name was or from where he was calling from and in regards to what and he wouldnt give ANY info. Just threatened that he would show up at the front door with papers that needed to be served. The weird thing is, he has called all of these people EXCEPT my husband. And we have no idea where he got the cell phone numbers and addresses from. Especially my mothers number and address since he never lived there. When we Googled the number he left, it came back with complaints that it may be a scam so my husband is reluctant to call the man back. Should we just wait for this dude to hunt him down and serve him papers?
The debt collection letter my husband received on Tuesday was from Northland Group, Inc. We googled that name and PO address and it came back on BBB’s site with an A+ rating. However, when he went to the website it listed to pay the settlement, it asked for a number on the letter and a password (his last 4 social), it error-ed out and said “Invalid Account”. So now he’s really confused and doesn’t know who to trust.
How do we find out who exactly owns the debt now so he can settle on an amount and pay it back? He knows he owes money. He made charges for a trip years ago while he had a good paying job, and shortly after that trip, he lost his job and was unemployed for a few years. He just recently got hired full-time and is trying to get himself back on his feet, moving out of grandma’s house, getting health insurance, and just recently paid off his car, and this debt was next on his list. He just doesnt know where to start.
I had a levy put against my checking account in CT. I have since made arrangement with the company and they accepted monthly payments to be made by me. I had another judgment on me but they never went into my account. I called them and also made monthly payment arrangements with them. Will they still try to take money out of my account even if they accepted my arrangements? I’m not going to keep money in the account as I asked my employer to stop direct deposit and give me a live check. Can a creditor put a levy or a judgment against a prepaid debit visa card? I may want to put my money on that when I have to pay bills.
You should be safe with the prepaid visa.
When you made the payment arrangements, did you get the details outlined in writing?
My default position on these things is to take every precaution available to you when all that you and they agreed to is not in a written agreement.
I recently received notification that I was being garnished through my new employer for a Capital One CC $1,100.00 the judgment was issued in 2012 my son signed and never told me so I missed my court date. The garnishment payout through my employer is a negative amount (state I live in, I make too little for them to take out and pay towards the garnishment) It’s a very part time job.
I plan on calling them to see if they will set up a payment plan with me directly do I get anything in writing ie; payment plan? Can’t
the company who place the garnishment cancel or retract it?
Thanks for any advice.
In order to get a debt collector to work with you on something this far advanced in the collection process, you may be better off showing the court you are fuly or partially exempt from garnishment first. The affordable payment plan you need would be more likely.
Did the garnishment notification you received have instructions with it for how to request a hearing to contest? If not, call the court clerk and ask for the steps you need to follow to set that hearing up.
Michael,
I have a quick question. I was recently sued by a collections attorney for an HSBC credit card. I knew I was being sued and before receiving my court papers I called the attorneys office and settled the debt, 2 days ago. I just met with the court server today to get my papers. The attorneys office said they would dismiss the case once the check clears. The court papers say I have 14 days to respond. Since I’ve already settled should I respond to the court or will it be taken care of by the attorneys office?
Thanks you.
Have the funds cleared your account? What is the name of the law firm suing, and who is the named plaintiff if not HSBC?
They have cleared as of this morning. The firm is Couch Conville and Blitt representing NCEP LLC.
They should follow through on their end then. Check the court record to be sure that they do. Post a follow up if they have not within a couple weeks.
Hello Michael, I’ve read almost every comment on this thread and pretty sure I already know the answer.
Original Creditor – Providian National Bank 2004/2005 (I think it was sold to Hobe Financial)
Judgment granted Oct 2008
Garnishment granted July 17, 2014
Law Firm in Atlanta, Ga. sent me a letter June 20, 2014 stating the I owed a debt to Hobe Financial in the amount of $15,353.35 and a bunch of law term language in the letter. Nothing about the judgment but I had 30 days to contact them. Garnishment was granted on July 17, 2014. They didn’t give me the full 30 days to respond. This past week I received notification from my employer that a wage garnishment would start on the next paycheck. The deduction has not started yet, as I get paid towards the end of the month. I’ve contacted the law firm today and left 2 messages seeing if they would accept a pay-off before the garnishment starts. This would put an extreme hardship on me if they are able to get the amount calculated each month. I was going to offer $10,000 what’s your opinion or am I pretty much stuck and probably have to file bankruptcy. I bought a house and new car 2 years ago.
Who is the law firm?
You may not be stuck with the full garnishment if you can show where that amount would create a hardship based on your income and expenses. If you do that, and get the garnishment reduced, they will be much more open to a settlement. If you are not able to show how the amount is too much for your family to handle, it is not likely they will be open to reducing the amount owed and settling.
Have you talked about your situation with an experienced bankruptcy attorney? Are you able to qualify for chapter 7 where this and other debts can be completely wiped out? What prevented you from filing before now, if anything?
It’s McCullough Payne & Haan, LLC in Atlanta, Ga. I offered them $8000 Friday and called me back today only willing to settle for $12.000. I qualify for Chapter 7 but would have to sell my stock.
How much is the stock valued at? That will calculate into your decision making.
What other unsecured debts (on time or in collections) are there?
Are you considering requesting a hearing to contest the garnishment amount, or are you fairly certain you would not qualify?
It’s valued at over $16,000. I don’t have any other debts except my car payment and mortgage and utilities and other normal lifestyle bills as a homeowner. I have not considered the garnishment amount, don’t know the steps to take. I’ve left them a message to call me back and was going to counter their offer and say $10,000. I was told by bankruptcy attorney I could convert my stock into my 401K but my company plan administrator said it doesn’t work that way and would have to sell the stock and then move to the 401k. Still being taxed with a 1099 next year for the capital gain/loss. If I do that then I would qualify for Chapter 7. Just so confused and undecided. I know my payroll dept has already processed the first installment on the garnishment to come out of my check next week but was told by the attorney I would get that back once we settle. They also offered me payment arrangements, however would mean that I would still be liable for the whole amount of over $15,000 and quite sure they would only accept a min of $500- $600 per month. So that really doesn’t help out a whole lot. Advise? Opinion?
If you think you have no shot at getting the garnishment reduced or eliminated based on your income and expenses, the counter offer would be something to pursue. Add up all of your bills, and I mean every way you spend money in a month. Subtract that from your income, what do you have left?
If you can get the court to protect you from all, or part of the garnishment, judgment creditors, and especially ones who are already showing they will negotiate a pay off with you, will often settle for a better savings to you. Talk to your courts clerk about how to get a hearing to contest the garnishment.
I have 2 judgments issued in Colorado by collection agencies that buy debt. This debt has most likely been sold multiple times for pennies on a dollar. I now live in Texas which is a commonwealth state, so they could pursue my wifes property and bank accounts.
My question is, Will the judgment from Colorado be legal here in Texas or will they have to file for a new judgment?
They can file as a foreign judgment creditor in Texas without suing you again. Once they do, the judgment is valid for 10 years, and can be renewed for another 10 years.
Who is the debt buyer? What are the balances (round to the nearest)? You can settle judgment debts for less than what is owed.
Capital Alliance Financial f0r $ 7,400, Atlantic Credit & Finance Inc, $ 14,400. the latter took 1,400 from my bank account. Yes I know I can settle for less, but when they see my zip code they will go after my wife, to make things more complicated, my father in law has insisted that he will hire a lawyer to deal with this, but so for 2 have turned him down
What is it your father in law intends to do? Is he looking to have an attorney negotiate lower pay offs, try to get the judgments set aside or vacated, other?
Post the name of a nearby city in Texas. I will email you contact information to both Texas and Colorado attorneys that you or your father in law can consult with. These would be experienced collection defense attorneys who can help with all of the above.
Yes we are trying to hire a lawyer to negotiate lower terms, I’m not sure they had the legal docs to sue me but since I did not answer the papers filed they won the judgment. Interesting note, my pay check was just garnished in Texas this week, that should not happen, but I think I know why, I work for a large Corp. and my address had not been changed in my transfer from CO to TX! we found a local lawyer that has that seems to have the right background, I did find 4 lawyers in the Houston area from you web site, but he does not want to go to Houston, we will ho this turns out.
You can generally work with an attorney without the need to travel to their offices. Though I relate to wanting to look a person in the eye when hiring them.
I sent you an email with contact details to some experienced consumer law attorneys in both Houston, and in Colorado. All likely offer a no cost initial consult.
Please do post an update with how you progress.
Hi Michael,
I had an American Express card go delinquent in 02/2005. Went into collection in 10/2006. The original credit limit was 2k. When it went to collections with over the limit fees and late charges the balance was $2,901.00. The collection agency Asset Acceptance won a default judgement against me in 4/08/2010 for $4,852.51. I want to resolve but for way less. No adverse action has ever been taken against me. I would like to settle for 2k or less. What do you think?
Rob – How collectable do you look on paper? Are you paying other bills on time that show on your credit reports (credit cards, auto loan, home)? Are there other collection accounts showing still?
What you can settle for is often impacted by whether what you are offering is within the parameter of what the debt collector regularly accepts given what they score you at for being collectable. Judgement debts are more nuanced.
Is the 2k all you have, or can access? While it is possible to negotiate a settlement that low, because it is a judgment, if you are not able to lock in the deal, I get concerned about waking them up to a sleepy account that someone cares about (you), and whether they can collect now through bank levy or garnishment. Can you get your hands on some additional money if necessary? What state are you in?
Michael,
I acquired the debt while living in Las Vegas. The Judgement took place while I lived in Chicago. I now live in Iowa. I do have about 3-4 accounts in bad standing on my report. Everything else is okay and current. I currently don’t own a home but rent. I wanted to make an offer of 25% and would go as high as 45%. From various things I have read this seems to be a fair range. If necessary I could get some more cash but it would take more time.
I would go for it then. 25% is more consistent of a starting place for debt negotiations when there is no judgment or court action. And with other bills showing as current on your credit reports, it is even less likely you would settle on an amount that low. Why not just start that low and go up in increments? Too many offer and counter offer moves in negotiations can be counterproductive in situations where they have “or else” options. But on the other hand, they would need to probably need to go through extra expense and time of getting a foreign judgment recognized in Iowa before they could roll with any of their “or else” options like wage garnishment, bank levy, etc.
Thank you.
Hello,
Looking for some sort of advice. I am currently being sued by a debt collector here in GA for $1360. This is an old card from at least 4 years ago, and they are just now coming after me…I have been served obviously, and they have asked for the case to be transferred into the court in my county, instead of the original. I sent a response to the law office, requesting debt validation that has so far gone unresponded.
I plan on going to court, Pro Se. I am just so nervous that they are going to win #1, and garnish my wages. My husband and I share a bank acct currently, but it is under his name primary, and my MARRIED name secondary. The lawyers are suing under my maiden name. Before they get a judgement, should I take my name off the acct and switch from direct deposit to paper checks again? Just in case?
Any tips to win in court? Will they garnish if I settle with them??
Requesting debt validation if you have already been sued does not serve the same purpose as it would if you had not been sued. You can still get all of that information from a debt collector that you would want out of you validation request, and in fact, you can get much more information from the collectors. But you have to do that through the formal discovery process with the court.
I recommend you contact an attorney in Georgia who regularly defends against debt collectors. Most of this attorney type will offer a no cost initial consult. If you post the name of a nearby city, I will email you contact info I have for any in the area.
If you settle the debt, there would be no reason to garnish.
There is no need to remove your name from bank accounts unless they get the judgment. If this does become a judgment, I would not have my name on any bank accounts.
Thanks for your reply. I am located in west GA, near Dallas/ acworth. I appreciate you help… Would a request for production filed with the court asking for all the information on the acct ( basically trying to show that I don’t owe THEM, just citibank) make any difference? Also I have been informed that since they mistakenly filed the suit in Cobb and had to have it transferred out to Polk where I live that they’ve already violated some portion of the FDCPRA, since the burden is on the law firm to file in the correct place, and I may be able to have the case dismissed with prejudice?
I sent an email with contact details to a couple of attorneys in the area with the experience you need. Both will likely offer a no cost initial consult.
Hi Michael,
Last week I was summoned with an Arbitration Notice to Appear in court for a judgement to be filed against me for a back bill; I’m being sued by Portfolio Recovery. I’ve already consulted a lawyer, but still waiting for answers and advice; I feel like I need to tackle this issue now opposed to waiting until the last minute. I’m in a situation to make payment arrangements; and in the past I’ve cleaned my report myself with debt validations, and delete to pay letters. Right now, I just need a little guidance.
First, I know I need to respond with an “Answer”, but how do I go about doing this? I have to do it within the 20 days, leaving me only about 13 days. Should I submit a debt validation letter to Portfolio Recovery, and would this be considered as my answer; or should I be dealing directly with the law firm who originated the summons? I feel like I can fight this, not sure how to go about doing it, but the being “served”, along with a bunch of letters I’ve been receiving in the mail from lawyers announcing that I’m being sued has me feeling ugh.
Theresa
I would encourage you to work with an experienced debt collection defense attorney. I am not sure if the attorney you spoke to has that as part of there regular practice, but very few do. What is the name of a nearby larger city?
You can set up payment arrangements to be sure, but PRA will likely want you to consent or stipulate to a judgment in accepting long term payment arrangements (try to avoid this if you can, but not always avoidable). You can settle for a lesser amount paid in a single lump sum. How much is the suit for? How much can you raise to settle?
Hi Michael,
I’m near the Philadelphia, PA area. The amount is only for $960. The attorney’s officed called me back today, and yes he’s a debt collection defense attorney. I’m still feeling very ugh about this. I felt comfortable talking to the attorney, however, I felt my questions still were not answered. I feel I should just call PR, and pay it off. But my main concern is will they still be allowed to file a judgement against me. I was hoping a pay for delete would settle this and it would end. But I’m beginning to feel like this is going to be a never ending issue, don’t know why, but I’m not getting good vibes with this. I guess not a simple as I thought it would be.
Theresa
I am not sure what expectations you had with a pay for delete, or where you got the idea about it, but that is just not likely with this type of scenario. Maybe if you defended and won, or had cross claims….
You can pay and get this dropped though. Do you have the money you need to do that in one single amount? If not, can you raise that? How long would it take?
I just received a letter from Midland Credit Management, Inc. saying that they have made several attempts to contact me regarding the account. And that they are considering forwarding this account to an attorney in my state for possible litigation. I have from now until Aug 17, 2014 to pay them $500 and call to set up my remaining payments, or call to see how to qualify for discounts and affordable payment plans.
The amount I owe now is $3,379. Original creditor is Chase Bank USA, N.A. I don’t even remember owing them money. I know that my father used to use my name to open up credit cards accounts in the past and use them, but he has passed away last year.
I also have other debts and loans that I haven’t been able to pay off. So am I at risk for being sued here? What should I do?
Midland does sue for collection frequently, so yes, you have a higher risk of being sued for this account.
You need to get to the bottom of whether you ever had this account, or your deceased father opened it and used it. You could file a police report for identity theft if you never opened this account.
Post an update with what you learn and lets go from there.
Hello Michael,
Thank you for responding. I’m not sure how to go about and find out if it was my father who opened the account or not. The original date was all the way back in 2006 when it was first opened with Chase Bank.
I just called Midland and told them the story, and they asked me if I want to do a dispute. I’m not exactly sure where this would lead me, but I told him no and that I’ll call them back later. The lowest pay in full he offered was about $2700. And if I were to do a monthly payment, it would be $101.
Should I just go with the monthly payment or should I consolidate all my debts and go from there? If I were to go to the police and report identity theft, how can I prove that it wasn’t me who didn’t open the account? Thanks.
It’s probably not a good idea, I just decided to settle the debt with 1 payment of $2203. They give me til the end of the month to do so. I’m just going to try and borrow friends’ money or something. Thanks!
In the same way it would be difficult for you to prove this was ID theft, the burden will be for them to prove that it was not. But that would likely come to a head if you were sued for the debt.
I would target settlement with them at roughly 50%. But before you go there, what other debts do you have? List the balances owed, when last paid, and who is collecting on them now. I can offer some perspective.
I also have other debts:
1. $1713, from Midland Funding LLC again, originally from HSBC bank, last paid in Oct 2013.
2. $552, from Portfolio Recovery, originally from Chase Bank, last paid in Oct 2012.
3. $3,690.61, from Resurgent Capital Services, don’t know where it’s originally from, last paid I think in April, 2011.
To be honest, I don’t remember buying anything that led me to so much debts at all. I did have a Chase account back in the day, but never bought anything that lead me to so much debt. I’m an Asian, and in our culture we tend to live together as a family, so I live with my parents, sister and brother still.
I believe my deceased father used everyone names in the family to open up bank accounts back then (he might have had us sign them back then without us reading what we signed because we trust him, but I seriously don’t remember).
The only debt I know I have that belong to me is federal student loans.
If I were to file identity theft to the police… I’m not sure how it will help me. If they were to look at the transactions, they would probably have our same address because I live with my family. And as for the signature, I’m not even sure or remember if I did sign them contracts or not.
For the debt that I mentioned in the original post, I was able to haggle them down to only $2203. They wouldn’t go any lower. Any tips on how to get them to lower to %50 like you mentioned?
Thanks,
Peter Pham
Negotiating settlements does not have to start and end in one phone call. I would have tried to wear them down over the period of several weeks (unless negotiating something time sensitive like when a lawsuit has already gotten under way. You also should focus on hardships. Try never to sound or say something optimistic about your income, or ability to get money. Everything should sound like an extra 100 dollars might as well be a thousand.
I asked about the other debts in the event what you shared made chapter 7 bankruptcy appear to be a better option for a fresh start, wiping out all of the debts. If you are working, and believe your job and income to be secure, you are more likely to be able to navigate all of the collections,rather than file chapter 7 over a relatively small amount. People regularly settle with all of those debt collectors for 50% or less.
Hello Michael,
I haven’t been able to respond because I was trying to call MCM to get a lower settlement. Unfortunately, the person who handles my account hasn’t been in work or something, they keep saying he’ll work tomorrow and to call back.
I tried to ask someone other than that person to lower the settlement, but they said that’s the best deal I will get and that I’m not even suppose to get that low of a deal. I have no idea how to get it to 50% or even lower.
I thought about filing for bankruptcy like you said, but a few friends of mine recommended me to not to as it will jeopardize me in career wise (I do not mind the 10 years negative remark on my credit report). Friends said employers might refuse to hire me because of bad credit (it shows I cannot handle my life).
Hello again,
So I was able to reach the person who is handling my case today. I explained to him my situation that I’m still in school, no stable job (I’m on call and barely get called in for work), living at home with parent, on medicare and food stamp, has gastritis/ulcer due to stress (gone to endoscopy a few weeks back). He was able to lower the payment to $2000 by the end of this month.
I found that the stuff that he was telling me weren’t true or accurate. For example, when he gave me the deal of $2203 deal he told my to wait so he can ask his manager. However, today he told me that if his manager finds out he gave me that previous deal, he would be in trouble. And how he would be more in trouble because he had lower it down to $2000. So as you can see his statements aren’t the same.
Try not to get hung up on a debt collectors verbal representations. You want a deal you can afford, and you want it documented and reviewed for accuracy before paying anything on the deal.
As for employment and a bankruptcy in the public records, what industry do you work in, and what role do you fulfill in that space?
I graduated with an associates degree in nursing and just got my registered nursing license in April 2014. I’ve been applying all over california for new graduates position, but haven’t had any luck. The problem with nursing is that they are transitioning to hiring only bachelor nurses. They’re no longer interested in associates (I got this confirmed from friends who know managers in the field).
I even apply to out of the state and still no luck. The only place who hired me was a skilled nursing facility, but they hired me as an on call nurse. They barely call me in; like 2 times a month. So right now I’m trying to go back to school (online program) to get a bachelor. The cost is expensive, so i have to borrow a friend for money (it’s about $350 a unit). I would have to take at least 6 units every 7 weeks in order to finish it by next June 2015 (it’s kind of accelerated). It’s a bit complicated with nursing compare to other fields… My status as a new grad will expire within 18 months starting from the day I got the license. If I go over the 18 months without working, I’ll never be able to get a registered nursing job. And as for the non new grad positions, you would need 1 or more year of experience in order to apply.
It was manageable until I found out about all the debts that I owe and the pre-legal letter from mcm.
Michael,
I live in New Jersey and back in 2007 I ran in to some financial troubles, I lost my job and left my daughters father. I had 3 credit cards that ended up going unpaid because I had no funds and he refused to help even though it was mainly his debt. These 3 credit card debts ended up becoming judgments against me. (I was young and had a new born baby, moved and didn’t know what to do at the time) Now, many years later, I have been working on repairing my credit and hope to buy a house for myself and my daughter.
My credit score is better but I have these 3 judgments and they total between $10,000-$11,000. Is it possible to make settlement agreements when a debt is already a judgment? I have some savings (not enough to pay these all off in full) but was hoping I might be able to make settlements and have these judgments removed from my credit reports. Also, I have my credit report that lists the 3 different “plantiffs” but how would I know if I talk to them of if they have an attorney that they used that I would have to speak with?
Thank you in advance. I truly appreciate any help/advice you can provide.
Sarah
You can settle debts that are now judgments. It is realistic to be prepared to pay half of the balance owed as of today. You can sometimes negotiate a better deal, and there are times where 80% might be as good as it gets.
How long ago were the judgments entered in the court?
Assume you could settle for half, how long would it take to pull together the money to pay them?
The judgments were entered in 2008 & 2009. I have about $5,000 saved up so I’m going to use that to try to make settlements on these. Obviously I would like to settle for the least amount possible…. What do you think are good starting points?
These are my judgments:
$3,976 LVNV Funding LLC Entered 5/09
$3,485 Atlantic Credit and Fi Entered 3/08
$3,150 Asset Acceptance Entered 6/09
Thank you!
Michael,
The judgments were entered in 2008 & 2009. I have about $5,000 saved up so I’m going to use that to try to make settlements on these. Obviously I would like to settle for the least amount possible…. What do you think are good starting points? What is the best way to approach these?
These are my judgments:
$3,976 LVNV Funding LLC Entered 5/09
$3,485 Atlantic Credit and Fi Entered 3/08
$3,150 Asset Acceptance Entered 6/09
Thank you!
I would aim at settling for about half. You can start a little lower, but be prepared to end up higher on some or all.
Just know that part of approving settlements there is often going to be a collectability algorithm run on you. How collectable you look could be the shape your credit reports are in (paying other debts on time), all the way to the average income in your zip code. The more collectable you look, the more you will want to emphasize what has made it, and continues to make it, hard to be you financially.
I would not reference that you are disciplined enough to save up 5k. I would instead say something like “It is all I can do to pull together this amount of money as a single mother”. We are still talking about the same amount of money, but we changed the perspective of the person on the other side, and are giving them a reason to settle for better savings.
The real risk is that you show willingness to pay when you start the negotiations, and they start looking for what they can levy from a bank account, or garnish from a pay check. New Jersey is not a consumer friendly place for debt collections.
Michael,
I appreciate the feedback.
So by trying to possibly make settlement agreements with these 3 judgments I could be opening up another can of worms with wage garnishments and back levies? Would working with a lawyer or specialist help me in any way?
I am disappointed but not surprise that you mention the negative about New Jersey….living here seems to make everything more difficult.
Also…Do I try to contact the companies that are listed on the judgments to find out if I negotiate with them or if there are lawyers involved? I wasn’t sure of the best first step.
Thank you again,
Sarah
I do not mean to scare you off of tackling the debts, but it is always best to go at something like this fully informed and prepared.
Even if one of the judgment creditors went at a garnishment, you can only be garnished for one debt at a time, and maybe not fully (as you may meet full or partial exemptions). You use that to negotiate with the other two.
But the main thing I see people lose focus of with your type of situation is that this all needs to get done quickly. That could mean taking a 60 or 70 percent deal on one, getting a lower deal on another, and finishing off the third. It may also mean you only have enough money to settle two, and have to circle back to the third, or other varied outcomes.
You can do all of this, or you can work with a pro. It would be better to talk about all of this with an experienced consumer law attorney. Post the name of a nearby larger city and I will email you contact details to any attorneys in the area I know work with collections. Be upfront about your budget and goals when you talk with them. Hit on the concerns I have touched on here, and any others you think of.
If you do this DIY, talk with the judgment creditors first and see if you can work direct with them bypassing any attorney. It is possible to do after this long. If they have a contract with a collection attorney they will tell you who to contact to get this negotiated.
Michael,
Thank you for this information and I do appreciate you being up front about the situations that are possible.
I live in New Jersey and the cities close by would be Cherry Hill, Moorestown, Marlton. The biggest city close by is Philadelphia but I prefer something in state if you know of any.
Again, thank you so much!
Sarah
I found one in Marlton NJ and sent you that via email. Post an update with how you progress.
Hi I just got sued by midland funding for $3,421. I was working so agreed to pay them $35 a week shortly after I lost my job and was unable to make any payments they went in my bank account and garnished $356 from checking I want to fix my credit and just recently started working it is an old debt originally from 2007 from Bank of America but got sold in 2012 will the statue of limitations start again, by the way I’m in Connecticut.
If Midland Funding has a judgment, the SOL to sue you is not important, but the SOL to collect on the judgment, with all of the extra ordinary ways they can do that, like garnishing/levying your bank account, does apply. And in some states that can be as many as 20 years or more.
The SOL for this debt to appear on your credit report is a two part answer. The date BofA considers you to have missed your first payment, or to be 30 days late, means you can count forward 7.5 years for the BofA and Midland Funding collections reporting to drop from your credit. But any judgment in the court record gets a new set of 7 years to report starting from the date the judgment was entered in the court.
When did you first miss a payment to BofA?
What is the date the judgment went into the court record?
Hi,
Thank you for your response. First missed payment was on Aug 2008 for BOA and the judgement with midland funding was in Feb 2014 they garnished funds from my checking in July 2014.
Am I able to talk to them and maybe settle for half the money or is it too late.
It is not too late to settle with Midland Funding. With a judgment, they are more likely to hold out for a higher amount. But 50% is doable. How long will it take you to pull that amount together?
I can save it before the end of this year I just don’t wanna call them now because im afraid they are gonna start bothering me all over again. Also I looked at my credit report in equifax and it states this account will be closed on Nov 2014 is this accurate, and in credit karma it shows last acct report by midland is July 2014 that’s when they when in the acct but did not subtracted what was taken from my checking.
Just know that the sooner you act, the sooner you will remove any risk that they will levy your bank account again, or garnish your paycheck.
I am not sure what you are referring to on your credit reports about subtracting money they already took, but any judgment showing on your credit report is the result of the public records in the court. Payments are not updated to the court record. Typically the court record will be updated when the judgment is satisfied (which includes negotiating a lower pay off settlement), and not before. The paid judgement will always be part of the public record, but is limited to staying on your credit report for 7 years from the entry of judgment.
See this post for more on judgments on credit reports: https://consumerrecoverynetwork.com/question/judgment-collection-removed-from-credit-report-public-record/
Any other collections from Midland Funding showing on your credit report should age off at the same time the BofA entry does. See this report for collections falling off credit reports: https://consumerrecoverynetwork.com/question/collection-accounts-age-off-credit-reports/
The judgement is not showing in my credit report all it says is acc was last updated in July 2014 I want to buy a house within the next two years will this affect my chances my credit score is 620 right now and I’m planning on getting a secured credit card to higher my credit score
Thank you so much for your help….
Anna
If your collections are paid (even a judgment if that shows up later); you have a debt to income ratio that meets the new ability to repay rules; any required down payment; and a 620 credit score or higher; you have a good shot at qualifying for FHA loan underwriting.
2 years is a very realistic goal.
The reason I asked about my ex husband is because it stated in the original papers I was served that if they found out his name that they would add him to the lawsuit.
We live in Chandler, AZ. The reason this is causing a problem is because I’m a stay at home mom with 3 kids, my only income is child support which they can’t go after as far as I know because it’s supposed to be for the children. My husband now only makes enough money for us to pay our rent/bills/gas/food etc. I am already putting my debt onto my husband because I have two private student loans that I can not defer or forebear any longer and we are making payments on those which are big payments.
We don’t have the money to pay a lawyer a ton just to get advice or to do anything for us. Or to make huge payments or have my husbands wages garnished, I have absolutely nothing in my name…no bank accounts, cars, houses, credit cards…nothing. I don’t think my husband should be on this lawsuit, as I stated the law they quoted to me doesn’t make sense to me at all. Is there a way you can reword it to me in lamens terms? Any references to lawyers who would be willing to do a free consultation would be great as well. Thank you.
I sent you an email with contact details to two debt defense attorneys. Most of this attorney type will offer a no cost initial consult, and this is someone who can provide you reliable feedback about your question, which is what you need.
Post an update with how you progress.
I am currently receiving information stating that GurstelChargo is coming after me for a debt incurred in 2007-9 something of that nature by Sears Gold Mastercard credit card. I was served papers a few weeks ago stating that they were coming after me for an amount that is in excess of 2k.
It states in the court papers that they did not know if I was married, and if I was that they are applying marital community to the debt, even if we were divorced. I was married at the time but not to the same person I am married now.
BUT it also states that if I wasn’t married or divorced and re-married that my current husband is also liable for the debt according to ARS 25-215(B).
I have always been told that if you incur a debt before marriage that the debt will not become the responsibility of your spouse. This card was cancelled in 2009-2010. I was married in 2012, and didn’t even know my husband when the debt occurred or the card was cancelled. I looked up the numbered law and didn’t understand the wording.
I received 3 letters in the mail today, addressed to me alone, my husband, and then to me and my husband together. All of them stating that they have found out the name of my current husband and that he is being applied to the debt, as well as a bunch of information stating that they found I was not currently in the Armed Forces, but that they do not have enough information to find out if my husband is, which he isn’t but I don’t understand how that matters anyhow.
Can you please give me any information as to what I can do when I call these people to fight them from applying my current husband? I’d be glad to tell them the name of the person I was married to when the debt was incurred because in truth the card was in my name but it was actually my husband at the time that used it, maxed it out, and then didn’t allow me access to funds to make payments on it. Once we divorced, to avoid a major custody battle and have him drag our divorce out horrendously I didn’t include any debts in our divorce. But if these people want to start bugging him about it, he can deal with them. With your knowledge, firstly do you think I could just call these people and tell them my previous husbands name and then they will leave my current husband alone? Do you understand the law that they quoted? How can they go after my current husband for something like this? I’m sorry this is so long, but I am trying to be as thorough as I can. Thank you for your time.
The collector is being careful not to run afoul of the service members relief act. That is the likeliest reason for the military references.
No, I so not think you can give them your prior husbands name, and they will focus on him instead. They have your full attention, and that is what they care about.
I would encourage you to talk over your options with an experienced deb defense attorney in Arizona. They will be most familiar with how to respond to Gurstel Chargo’s community property collection efforts. Post a reply with the name of a close by larger city, and I will email contact info to any experienced attorney I find nearest you.
I have been reading the posts and you are great at answering them.
I have a garnishment on my wages currently and they are to take 3 more payment from me. When the garnishment is done what should I do to secure that it doesn’t happen again.
This debt has been garnished on last year with a different attorney office and was refunded to me as account closed and I am hoping the same happens with this new attorney. But I just want to be sure I make the right move after it is done.
Who is the attorney, and what is the name of the plaintiff on the lawsuit?
Thank you Micheal for responding.
The Attorney for the 1st time they garnished my pay was Daniel Gordon, PC and they collected 1358 and returned it to me becuase the FIA Card Services had closed the account. NOW I am being garnished by Suttell and Hammer PS for the same account. I do not even remember when the last payment was on the FIA account I am sure it was close to 6 years this August.
Should I call the new attorney and tell them that the FIA account was closed and what happened? How did they get a new judgment when the other attorney had it?
I have numerous Credit cards that are all with collection companies and I am just not able to pay them. I am with Credit Karma and I watch it pretty regularly.
Michael, I am sorry I must have missed an email response.
Is there anything I should do to stop this garnishment? As I said the 1st attorney garnished my pay was Daniel Gordon, PC and they collected 1358 and returned it to me becuase the FIA Card Services had closed the account. NOW I am being garnished by Suttell and Hammer PS for the same account. I do not even remember when the last payment was on the FIA account I am sure it was close to 6 years this August.
Should I call the new attorney and tell them that the FIA account was closed and what happened? How did they get a new judgment when the other attorney had it?
I have numerous Credit cards that are all with collection companies and I am just not able to pay them. I am with Credit Karma and I watch it pretty regularly.
I just do not want to keep paying for the same debt.
You should consult with an experienced consumer law attorney, and preferably one with debt collection defense experience. You might also connect with a legal aid office nearest you for information about the current garnishment being from the prior judgment, or a new one you did not know about. My guess is this is the same judgment that the Gordon firm refunded you for, but that is just a guess. Have you looked in the court records? Did you see the the prior judgment was vacated? Do you see a second one in your name?
Also, call and talk to the court clerk about how to request a hearing to show that you are either fully, or partially exempt from garnishment. That is how to stop the money getting drained away, or at least a lower amount.
Thank you.
Do you think I should Contact the new attorney that is collecting the money from me for the same Judgment and let them know that the 1st attorney Gordon’s office refunded because account closed or just let them get the 3 more payments and then ask for a satisfactions?
What is your goal?
Michael, My goal is to obtain a satisfaction for the judgment to remove it from my credit report.
I would like to try and clean up my credit report to obtain a higher score so that I can buy a house.
My credit report (with Credit Karma) is showing i have 15 collection accounts and I am not sure where to start on cleaning it up.
Also, Can you please explain how the process works when a credit card is indicating charged off/closed on my credit report? what happens next?
I can only speculate, but I do not thing you got the first attorney refund because the account closed. Accounts are closed in the normal course when you do not pay. The debt does not go away.
When the judgment is paid, it will get updated with the court as satisfied. Keep an eye on the court record to be sure that this happens. Once the court record is updated to show you satisfied the judgment, it does not go away. The court record is always going to be there. It will be removed from your credit report, but typically not until 7 years from the date the judgment was entered against you has gone by.
You are welcome to post the names of the debt collectors you are dealing with on your credit reports, the balances owed,and when you last made a payment on them. I can offer you some feedback on how to start tackling your credit reports. Just post all that in the comments on the page I have dedicated to the topic here: https://consumerrecoverynetwork.com/question/collection-accounts-age-off-credit-reports/
I apologize, I left that out. they are suing for $2,337.62.
You may be able to settle this and get it dismissed for about half of that. Can you think of any options to pull together the money…family, friends, the bike in the garage you do not ride much anymore (hopefully its actually your sisters)?
You could file an answer and defend against the suit, and maybe even prevail. This option is far better when working with your own experienced debt defense attorney. But that has a cost, and it could be more than it would cost to settle the debt.
You could call to low income legal aid and see if you qualify for assistance.
Work with a local colleges law program if they have a professor/student clinic.
Work out a stipulation to judgment settlement where you agree to a set payment, and have to pay on time all the time, to avoid any of the extra collection methods you are worried about (though garnishment may not be a big concern).
No way is this amount worth filing bankruptcy over.
hello! i was served with a lawsuit two weeks ago for a debt with Dell. I got credit with them back in 2010 and like a dummy, asked my dad and sister if they would like to order a computer along with me. so i placed an order for three computers and we were supposed to take turns making payments and have it paid off within 12 months to avoid the interest fee (it was interest free for the first year). so my dad and i took turns paying off our computers and my sister never did make one payment, despite me constantly reminding her. the balance is all hers but i wasn’t able to make payments on her behalf and the debt eventually went into collections.
so now i am being sued. it may be too late to file an answer (it’s been 14 days since i was served), but i had been researching the whole time to figure out what to do. the courts don’t care that it’s not technically, my debt, right? (a girl can dream). i’m just so upset at my sister. she uses that laptop everyday, what does she think, that it fell out of the sky?
so anyway, i live in texas and i’m SO worried that they will garnish my wages or seize my bank account. i barely have enough money at the end of the month just for groceries or gas after paying rent, utilities and day care, etc. if they were to garnish my wages, it would literally be catastrophic to my everyday living. do i have any options? i don’t know about filing for bankruptcy because eventually i’d love to buy a house and would hate to see what my interst rate would be at that time. the debt was bought my midland funding, sold by dell/webank. thank you so much in advance.
How much are they suing for?
Hi Michael – I have watched some of your videos and read many of your comments, which have been very helpful. Thank you for all of this valuable information. As a result of that information, I’ve come up with a plan, but I’d like to get your input.
I have not worked much in the past 4 years and have accumulated $89,000 of debt on credit cards in order to pay my monthly expenses (mortgage, auto insurance, food, etc.) I did this by juggling zero percent balance transfers among 7 cards (4 credit card companies), but I have now run out of available credit and have defaulted on all of the cards. Here are the specifics:
Credit Card Company A – owe $38,000 (they have offered to settle for $17,000, but will be charging off in the next day or so)
Credit Card Company B – owe $26,000
Credit Card Company C – owe $20,000
Credit Card Company D – owe $5,000
If I had money or expectation of steady income, I would negotiate a settlement with each company, but that is not the case. I checked with a bankruptcy lawyer a few months ago, but was told that I would probably lose my home in the process because of the amount of equity I have (home is worth $90,000 and I have just $10,000 left to pay).
I live in NJ and assume my credit rating will be bad for 7.5 years. I accept that, but want to navigate through getting this debt resolved.
I expect that all of my debt will be charged off in the next month or two and then lawsuits will be brought against me. I’m thinking that under the circumstances, my best strategy is to find a lawyer who specializes in debt collection (I have compiled a list of possible attorneys from the https://naca.net link you provided) and be prepared to go to court. Is this my best course of action or is there something else I should consider?
You are way ahead of this by understanding what can happen along the way, and planning for it emotionally and mentally.
I like the look of chapter 7 bankruptcy in some scenarios, even though you may have to rent for a while. But that is me, from across the country. You have to think about schools for kids and whether you will be able to find an afford a place to keep them in ones that are in now, or attending good ones; property values climbing and at what rate; declining and at what rate; emotional attachments; location and proximity to health and personal services, etc.
If you follow the path you are on, and are sued by an original creditor, using a good collection defense attorney, and depending on your courts level of case overload, you may buy a year-ish. If sued by a debt buyer, perhaps more, and perhaps they will struggle to get a judgment at all, if you are well defended.
You can look at the bankruptcy option again once sued. But realize if all of this goes in that direction, and you were to file, say two years from now, if you had file right away, 2 years from now you could be qualifying (credit underwriting wise) for an FHA mortgage etc. So well on your way to credit recovery. See more about this topic here: https://consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/
Thanks very much for your reply, Michael. My prime goal is to keep my home. Assuming I’m able to do that, I’m not so concerned about credit score. Home is almost paid for and vehicle is also paid for, so I don’t anticipate any large purchases requiring credit.
From what I understand, I will almost certainly lose my home in bankruptcy, so that doesn’t appeal to me. Worst case scenario in losing a lawsuit would be losing my home, but at least I have a chance of retaining it. With my largest creditor already offering a settlement of less than 50% owed (knocking $21,000 off a $38,000 debt), perhaps others will come up with similar offers. What’s the best one can do? I think I’ve read that 50% is good, but don’t debt collection agencies buy debt for pennies on the dollar? If so, it would seem that creditors would settle for a lot less than 50%.
I know it can be hard not to focus on how much a debt buyer probably paid for an account they later try to collect from you on. But knowing what they pay really does not help you in any way, unless it is part of some legal defense, and even then, would not be something you win because of.
Creditors base their collections and settlement policies on many data points, and not just on single accounts. I wish it were different. Some of the largest banks softened up their pre charge off settlement policies during the record setting default rate periods they had a few years back, but not all, and most are now back to settlement standards they had prior, or that they newly developed. See this post for how the largest banks rate at settling with you: https://consumerrecoverynetwork.com/review-top-7-credit-card-lenders-best-offering-debt-relief/
If you would like to post who each bank is, and a balance approximation for each, I can offer my feedback on potential settlement amounts that are the norm, and another estimate for when you are able to knock it out of the park with negotiations (it happens). Just post it over in the comments on that rating page linked above, not in this string.
Hello, I lived in a large apartment complex for several years in VA without a problem. I moved out last year, gave them my keys, forwarding address and phone number. I was told to expect my deposit return within4-6 weeks. About 5 months later I had not heard anything. I called and inquired and they stated they would have to get back to me as it was through an old managing company (i guess they switched management companies). I never heard back and gave it up for lost. I knew there was some damage to blinds from a friends dog, and figured they kept my deposit for it.
A year later, I have received a summons with a court date for a balance of over 1000 and about lawyers fees. I am completely stunned, I had no idea I owed anything! Money is not the issue and I am happy to pay in full right away if I legitimately owe something. I would like to see an itemized bill of where they got over 1000 in charges from to make sure its legitimate since i know a friend had some problems with charges when management switched. I really do not want to go through lawyers or courts, there is no need in my opinion. How do I respond to the summons? Should I contact the old property and try to get to the bottom of this? Will that help? Can they dismiss the summons? Thank you very much for any advise you can offer.
Also, there is nothing on my credit report about this. I have very good credit and would like to keep it that way, especially since i did not knowingly go delinquent on a payment, this would be my first. If i pay out of court will this affect my credit?
If you pay up, or get them to agree to accept less, and pay that all at once, they would drop the suit in return, preventing any risk that a judgment would be entered in the court, and later hurt your credit report.
You can file a basic denial of all charges and claims they make about you owing anything, and follow the court protocols for serving your answer on them. Collectors often become more reasonable about negotiating when they know they are dealing with someone willing to defend the suit.
I know you do not want much to do with the court process, and if you want to avoid that, work this out so that you pay and they drop the case. Get that in a written agreement from them. But if it were me, I would answer their complaint and keep my options open too.
Hi, Thanks for the quick response.
So if I respond as a denial of charges to the summons I can still work it out on the side with the original rental company and have them dismiss it before the court date? Can I contact the original company and work with them and not the lawyer? And if I just pay the debt (provided they send me the bill and its legitimate) Do I need to pay the lawyer fees or is that only if it goes to court?
Again thank you so much for your help.
I am skeptical about being able to work with the rental company any more. But you can try that route. Answering the complaint would buy you time, and put them on notice that you are not just going to roll over. When it comes to negotiating the pay off amount and getting this stopped, focus on the balance they are suing you for, and negotiate down from there.
If it were me, I would be polite but firm in the fact that you had no idea of the debt, left the place expecting your deposit back, and will have no trouble hiring a consumer law attorney with debt collection defense experience, but realize some form of negotiated payoff would cost about as much.
And you should talk this over with an experienced consumer law attorney. I can send you contact info for any I know about if you post the name of a larger city nearby.
Thank you. I am located near Richmond VA. That is what I am thinking, a lawyer will cost as much if not more than just paying. Worst case scenario I go to court and have to pay the debt and the lawyer fees, just doesn’t sound worth it. I feel a little paralyzed on where to turn, what to do. Who should I contact first if I wish to avoid the need for lawyers fees at this point?
I sent you an email with contact details to lawyers who practice this type of law consistently. Each of them likely offers a no cost initial consult, so getting some feedback that helps you formulate a plan is certainly priced right. Talk to them about what we have discussed in these comments, see what they say. Talk to them about help with filing an answer only, see if they will offer that type of limited help. They may even offer to make the call and settle the debt for a nominal fee that you do not mind paying.
Post any update with how you progress.
Hi,
My wages are being garnished for the amount of $5,727.84. The original debt came from a Discover Credit Card I had when I was in college and the judgement was for $2644.00. Interest doubled my amount owed! They are garnishing my wages at 25% which is too steep for me at the current entry level salary I have of $35k.
I live in Ohio and need advice on how to handle this? I have about $2500, which is almost all my money saved, to make a lump sum payment. How can I get them to agree now after they successfully got a wage garnishment against me? Do I have any options here? Is there anyway to lower the accumulated interes of $2729.58 or avoid paying it if I pay the principle amount in full?
I appreciate your adice.
Unfortunately, in a scenario where you will have to pay every bit of the inflated debt while that full garnishment is going through, there is little reason for the debt collection attorney working for Discover to negotiate. That does not mean it is impossible, I have been able to convey hardship scenarios and negotiate lower settlements with a lump sum payment when garnishments are in place. You can too. But be ready to offer a higher amount, or for them to refuse any offer.
Your odds at successfully negotiating the lower payoff increase when you request a hearing with the court to establish you are partially, or fully exempt from garnishment. Once they are notified you are contesting, and if your situation appears like one where you would qualify for exemption, they become more reasonable.
You can contact the court clerk about how to request the hearing.
I have a recent judgment in CA for old credit card debt for $5,000. I contacted credit agency who offered a one-time payment settlement of $4,000. I am going to call them and offer $3500 but tell them I will not pay (either amount) until they send me the offer and applicable details in writing. I have 2 questions.
1. should I accept an emailed letter, or fax? or, should I demand a U.S. mailing? (does it matter?)
2. they said to be prepared to give my bank account and routing numbers when I call them back. I am going to offer to mail a money order instead, to avoid providing them with my bank information. but, it might help them accept the $3500 if I agree to give the bank info right after receiving their updated offer letter. what is your advice about actually making the one-time payment? I keep reading to NOT provide a creditor with bank info. but, I am afraid they won’t accept my counter-offer if I delay the payment process. I would be willing to open an account in my name only, and only deposit the exact amount of settlement. what is the smartest thing to do here? this credit company is known for shady practices.
THANK YOU!
1. Generally an email that contains an attached letter, or the fax copy, is sufficient. What is the name of the collections firm, or collection company you are dealing with?
2. Mailing a payment in, and using a check, or bank check drawn from your bank account, is still fairly normal. If that is the only way to pay that you are comfortable with, I understand. I do first recommend exactly what you suggested doing, and cover using a specific account for settlement purposes in this report: https://consumerrecoverynetwork.com/paying-your-credit-card-debt-settlements/. But for one account, and a single payment, and depending on who it is you are dealing with, that may not be as advisable.
Many collectors and creditors have earned a bed reputation for collections issues at one time or another. But in today’s hyper aware collection regulations environment, and the CFPB’s very keen interest in the collection space, there is often less risk of any shady practice occurring, and if it were to, it is more likely to be from human error, and so simple and easy to fix.
THANK YOU.
it is midland. my only last concern is a way to sent payment same day without giving them
any of my account information. not sure which is smartest:
1. give newly created account & routing # (I actually don’t even want them to know where I bank)
2. do a same day wire transfer to them (not sure if my account #/info will show on their end)
3. tell them I will only send cashier’s check by registered mail, which could take 5 days (& might not help my hopes for a lower settlement)
I do not think mailing payment will hurt your settlement percentages with Midland. I also would identify them as one of the collection agencies where you would have little trouble fixing any mistakes if they are made regarding electronic payments.
Waiting to remit payment until after you get everything in writing provides the cover you need.
T H A N K Y O U!!!!!!!!!!!!
My wages are currently being garnished, I had a judgement for $7570, I have satisfied the writ/accept amount however interest accrual daily,I have already paid $9040. I have been paying for over 2 years now and they state I still owe $2000.
Is there any chance for me to negotiate debt settled? or is there nothing I can do?
It is not common to negotiate a settlement on a judgment that you are successfully being garnished for. They will question why they should take less now, when they get all of it with judgment interest by doing nothing different.
You may be able to request a hearing to show how the garnishment is creating a hardship, and if you qualify, get the amount reduced, or even learn you are exempt from garnishment.
Do you have a copy of the judgment? Can you see what interest the court set? What state are you in?
This is what I have
PRINCIPLE/DAMAGES: $5,288.90
PREJUGMENT INTEREST: $1,171.14
ATTORNEY FEES: $650.00
COSTS: $435.00
TOTAL: $7,545.04
The original judgment filing in the court record should show the interest rate the court is allowing. Most states cap judgment interest, but some allow for contract interest rates. Knowing what state you are in, and the rate the judge set post interest at, would help discover if there was an error made, and additional options to look at.
I’m in CA
California caps judgment interest at 10%. The balance remaining is feasible with some added administrative costs for the garnishment.
I was served papers for a lawsuit from an attorney over a medical bill from 2010. I live in Texas. The debt is for $2600. Is it too late to settle before going to court?! I did receive a bill about a year ago and contacted the collection firm but they couldn’t tell me who the debt was from. I also sent a dispute to the credit bureau a year ago. How can I negotiate a settlement without having to appear in court and hire an attorney?! And do I still have to respond to the court documents if I make an arrangement with them?!
How much money can you come up with to settle this Angela? Were there insurance payouts on any portion of the medical services/treatments that later led to this collection?
In am in NY.. In 2007 a judgement was served upon me from Unifund partners LLC. I was making monthly payments, however, due to inconsistant income, I defaulted on the payment agreement. I was in and out of jobs, in addition was on temp disability. I have now been at my job for about a year and my employer just received a wage garnishment letter from the Marshall. My friend has agreed to loan me about $1700 to see if they are willing to settle. If not I will have no other choice but to file bankruptcy. My life and finances are totally under water, them garnishing my paycheck will lead to me getting evicted by not being able to pay my rent as well as not being able to provide for my daughter. (I am currently going back and forth to court trying to avoid eviction),. Will me telling them I am considering bankruptcy consider settling for $1700 opposed to the $3800 that they are asking for?
BC – Unfortunately, in my experience, no. Unifund will be set on getting paid the full amount whenever the situation dictates they should. And the ability to garnish gives them a higher level of confidence that they will collect the full amount.
Debt buyers like Unifund (or at least the debt collection attorneys that work for them), hear from people that they will be forced to file bankruptcy frequently. The mention of bankruptcy will not generally mean you can settle for less.
What will help your negotiations is if you request a hearing in court about your qualifying for full or partial garnishment exemptions based on your current income and expenses. The garnishment notice you got from your employer will often come with notice that you can contest the garnishment, and how to request the hearing. If it does not, call the court and ask the clerk about how to do that.
If you are able to prevent the garnishment (even partially), Unifund may be more reasonable with the settlement amount they will accept.
Thank you for your reply Michael. I did go ahead and write them a letter (Unifund/Ericc Striech PC) asking if I can settle for $1800 opposed to the whole $3800, and also asked them if they accept my offer and I do pay the $1800 if they would terminate the income execution as well as issue me a Sat of judgement. This is the Letter they sent me in response to my request says:
“This shall serve to confirm that my client will accept in the sum of $1800 (in addition to all sums previously received and also to be received pursuant to the income execution), in full satisfaction of the judgement entered against you on October 3, 2006, provided payment is received on or before August 29, 2014.
Upon receipt and collection of your payment we will advise the City Marshal to terminate the income execution and issue you a full Sat of judgement.”
Does this mean once I send them the $1800 I am done with this? Or does this mean they will just except my $1800 offer however they will still garnish my wages for the remaining balance? I just want to make sure I am interpreting this letter correctly before I make a payment.
Thank you again for ay help…
It sounds like they are saying they will gladly accept your money, and will continue to seek garnishment too. Call them and ask them point blank. You may even want to record the call. You also may want to run the response by an experienced consumer law attorney, or low income legal aid office too.
It does sound like you are in a tight spot financially, so getting the courts protection from garnishment may not be a stretch.
Let me know what you do, and learn about the tricky verbiage. I may have some additional action steps to suggest.
I emailed them to clarify, and they responded with:
“$1,800 in addition to whatever sums are received pursuant to the income execution up until the time we receive payment of the $1,800 (and in addition to all amounts received to date).”
I am planning to send them the $1800 tomorrow, so I am assuming that they will accept that and other payments recieved (wagw garnishment) up intil they recieve the $1800. Correct?
I dont get paid for another two weeks… They would recieve my $1800 payment far before then… Thoughts?
What you shared adds more color to the concerns, but I would still recommend running this by an experienced debt defense/consumer law attorney near you. They will be familiar with state law and the things Unifund does consistently.
My professional experience, which is not insignificant, is to be cautious with all things Unifund.
Hello.. I just wanted to touch base with you and let you know how this turned out 🙂 they accepted my offer of $1800 and and I was issued a Sat of Judgement…. I was able to negotiate with them even though they had already had began the wage garnishment process. They took $1800 opposed to the $3800 they were asking for. I am finally dont with this nightmare. I wanted to thank you again for your help and advice 🙂 Best regards… BC
By the way: the judgement was filed from a collection attorney’s office. The garnishment starts in August but I may be taken off work due to my pregnancy. The part that I was being honest with them about was that I may NOT return to work. I just don’t know where to go from here.
Khany – What state are you in? How much did you offer as settlement?
I live in North Carolina and 2 days ago, I awoke to a knock on my door. It was a Sheriff’s Deputy with a summons from Discover Bank. They are suing me for a past unpaid credit card bill of $9,800. The attorney’s office it came from was Smith Debnam based out of Raleigh , NC. I don’t deny this debt, but I just don’t have a whole lot to pay them every month. I stopped paying Discover about a year ago. I’ve never been sued and I’m scared.
My question is: is it too late to try and ask if I can make payments without going to court? Who do I contact? Discover or Smith Debnam’s law offices? What would be reasonable to offer to pay every month?
Thank you in advance.
You would contact Smith Debnam at this point. It is pretty common to set up some form of monthly payment agreement at this late stage of collection. But be prepared for the collection attorney to only agree to that conditional upon your signing of on a consent or stipulation to judgment. This means you admit the debt, and if you do not make a timely payment they can skip all the court process and start extra ordinary collection efforts that come with a judgment (that is a very basic description). You basically give up your rights to defend.
A reasonable offer is subject to each individuals situation. What can you afford to pay each month without fail?
Thank you so much. I know that I’ll be able to comfortably pay $120/month without it preventing me from paying my other bills. Do you think that sounds reasonable and have you ever heard of this law office? Also, when I call, do I ask to speak to one of their attorneys? One more thing, should I try and make payment arrangements on the amount I owe? Or see if I can get it reduced and then ask for payments on that?
You will be hard pressed to get them to agree to 120 dollars a month. They will want more than that, but if that is all you can afford, they may have to learn that later (after they were to get a judgment and try to collect from you).
You will rarely be able to negotiate a reduction of the balance and get time to pay in the scenario you have with Discover suing. The reason you agree to a payment is to prevent their ability to collect by way of bank account levy, cars that are worth more than 3500.00, home equity more than 35,000.00, household stuff that can be protected up to 14k value – all of which are collection options available after a judgment is entered in the court. With the agreement, and as long as you keep up your end, you do not have to look over your shoulder.
You do have the option of negotiating a settlement. Discover tends to like lump sum payments on those. Do you have any creative ideas for how you could pull together a lump sum to offer?
Hello,
I just received paperwork from HR that wage garnishment will be effective 8/1. Years ago my mother was battling with cancer and I had to stop working. I owed less than $2k with capital one and now I am being served a judgement through a collection agency with a balance a little over $6k. According to the paperwork, judegement was entered since 2010 but I moved from the property so I guess I never saw it coming. Anyway, I called to settle the account with them and they won’t settle. I was being honest with them and informed them that I may not be working a couple of months and that if they settle they may get more than the 2 months wage garnishment. They wouldn’t budge and state that my account will not allow any settling. So, where do I go from here? I just want to settle less than full and get this over with since I am expecting my child soon! Please help.
Sorry totally forgot about what the page is about. Seeing you responding all those questions made me asked one too even though it is a different subject. I settled a few other CCs with around 20% settlement, had no issues with them. I am not paying any other creditor, just did a few settlement. My credit is still very bad. I thought I should fight the interest before start negotiating since they doubled the amount with the interest. No court yet…
No worries, just wanted to be sure.
Arguing the interest rate is just not productive settlement dialogue. If it were me, I would say something along the lines of “I will fight you all the way on the legitimacy of this inflated balance, even if I have to hire an attorney. At the end of the day, I only have xxxx amount to offer, it is acceptable or it isn’t.”
Unless I had some credit or finance goals looming, and this collection on my credit was holding me back, I would stick to my guns on the offer, and reassert it every so often. If I had a finance goal on the horizon, I would try to come up with more money for a settlement.
I stop paying my credit card 5 years ago when I owed them about $13k. First collection agency added interest on top of this with the rate of 29.99 and now it is $23k total. Now the debt is own by another collection agency. I am trying to settle it down without the interest but they say there is nothing they can do. I want to know what I can do to reduce this interest rate. Who should I talk to ? Also what should be the interest rate on this? I am in Georgia and credit card was belong to Citi Bank
Thanks
What amount are you prepared to offer to settle the account? Who is the debt collector you are dealing with? Knowing the answer to those two questions could help me better target my feedback.
I want to settle for 25% of original amount without interest since it has been 5 years. 1st collector Asset acceptance, now Midland Funding owns it.
Are you paying other creditors on time (mortgage, car loan, credit cards)? If so,you appear more collectable, and they would likely hold out for more. If your credit reports still look like a grenade blew up on them for these past 5 years, you may be able to hold out for a better than average settlement, but the 25% of some previous balance may be a bit of a stretch.
If it were me, I would be negotiating from a round dollar amount I can put together on short notice, and not muddying the water with any dialogue about interest accumulation.
Just to be sure, since this page is about judgment debt… but, this account of yours never went to court for collection?
Due to a sudden and disabling illness I was no longer able to work and was unable to pay off 2 credit cards. As a result, two judgements were issued 7 years ago. They have a 10 year statute in my state with one renewal allowed for an additional 10 years, so I will have to deal with these for at least 3 more years. My only income is from disability and both it and my home are not allowed to be used to settle the judgement, so in effect there is nothing for these companies to gain from the judgments. I will not be able to return to the work force but I do need to do repairs on my home., but any loans I would take could be subject to a garnishment., as would be any interest in a car that exceeds a very low minimum. I have recently been able to get credit and my credit score is in the 670 range.
Would it be advisable to contact the 2 companies and ask them to settle the judgments for a small fee that I can afford. Will they realize that they have no hope of collecting and take something rather than getting nothing? Will this letter reopen the debt and put it back on my report?
Thanks in advance for any help you can offer.
Your letter would not reopen the debt and allow it to be placed back on your credit report.
Judgment creditors are indeed often willing to settle, and the rate of savings, in my experience, is better the longer the judgments have sat unpaid, and when you do not appear highly collectable, and your only source of income being disability makes you look less so.
What are the balances on the judgment?
Who were the plaintiffs?
The original judgments were for $3,000 to FIA Card Services and $11,000 to LVNV. I hear from them via mailed letters about once every 4 or 5 months with offers to settle for the original amount of judgement. Thanks for you help with this.
If you really hammer the long term disability and fixed income scenario, you may be able to get a better settlement out of LVNV, and less likely with FIA, but not impossible.
Realistic settlement targets are 50% here. Moon shot savings would be around the 20% range.
Thanks Michael. I will let you know what develops.
My wife recently received a wage garnishment for a judgement that was entered in NY 11 years ago. She lives in California and apparently the law firm was able to to acquire a sister judgment to collect. She was never contacted or served in regards to this law firm acquiring this debt and enforcing the judgement aas it was over 10 years ago. The law firm says the represent the property management company who originally sought judgement(This property management company no longer exists and has not for 5 yrs). She tried to contact this property mangement company 4rs ago and found out they no longer exist and when she asked of the debt owed which was based on a rental agreement in. She was told that the new property management company knows nothing of this debt or judgment..I beleive the law firm is a purchaser of junk debt and purchased this debt becasue they saw that there was a judgment. When we tried to negotiate a settlement with the firm they keep saying they have to see if their client would accept the offer and has not returned the phone call. This debt is not on her credit as it fell off years ago.. She initially paid on the debt but became unemployed and could not pay.Her contact with the company 4yrs ago when she became employed was an effort to settle the debt.She is now 7 months pregnant and has filed exemption from the debt as her expenses are in excess of her income. Our bank accts are totally seperate..Do you believe she has a godd case for exemption as when she goes on maternity leave she will receive no pay and the 25% garnishment has left her with the inablity to pay rent. I am a contractor and my income is very sporadic as I work when the work is available.
I cannot say whether she will qualify for full or partial garnishment exemption. From the details you provided, it sounds like it.
I just received a letter in the mail with a notice of a levy on my bank account. They say I now owe just over $6,00o. (Old credit card I owed but lost my job and couldn’t afford making payments.) I am making minimum wage and own an old truck that I need to get to work. I’ve offered to make payments in the past but they were not willing to negotiate much. I don’t want them to garnish my wages. Is there a minimum amount that I can earn before they are not allowed to garnish my wages?
Sandy – Post the state you live in and your question about collection risks in the comments over here: https://consumerrecoverynetwork.com/question/social-security-pension-state-exemption-debt-collector-garnishment/
If I have not covered your state in the comments already, I will post a through outline in reply to your comment over on the other page.
Hello. I received papers from court (it says summons) Saturday June 21, 2014. And now have 28 days to respond… The lawsuit is for $2,667.00 for a credit card debt from Capital One. I live in Ohio. I work part-time only for $500 a month before tax being a stay-at-home mom. My husband is self-employed. We don’t have any property, renting an apartment. We have 2 cars financed, one is on my husband’s name and second one is on my and his (we had to get second car because my husband got into accident and car was a complete loss). We have a couple of joint bank accounts. Isn’t it late to take my name off those accounts? I have one bank account which is on my name. Do you think it’s possible to settle with the Cap One representative and what % it’d be? I admit I owe the money, but at this moment I really don’t have an opportunity to pay it off. I will try to borrow some money if it’s possible to stop the case at this point and settle. Thanks!
It is possible to settle with Capital One right now. Once sued, it is more realistic to expect closer to 70 percent (give or take 10%), if any reduction at all. Can you pull together that much?
No, you can still take your name off of joint bank accounts. Your risk of bank levy is only real when a judgment is entered, so no need for that if you are successful with negotiating a settlement.
Thank you so much for your reply! Unfortunately, I won’t be able to get that much… I’m hoping for $1,500 maximum. Do you think it’ll be possible to make payment arrangements if they don’t agree to my proposal amount? Or is it better to wait till the judgement is entered?
And I’m really confused as of what my next step is… Do I call Cap One attorney and negotiate and then send a written answer to the court? Or if we come to agreement Cap One will close the case and I won’t have to send an answer to the court?
Thank you!
1500 is possible if you have hardships. Your collectability score sounds like it would be low, and you will have to negotiate well. Just be ready to hear no, or a counteroffer that puts a deal out of reach.
You can indeed set up payment arrangements that are affordable, but often only because you concede to the judgment, which can also ding your credit further. Having a deal you agree to, that you know you can afford monthly, will usually mean no balance reduction, but prevents lien, levy, and garnishment in many instances.
If you want to negotiate now and see if you can avoid court, call the attorney. That could result in what you want – the matter being closed. You also have the option of answering with affirmative defenses that would prevent default and summary judgment, which can buy you time to come up with more money to settle too.
I do recommend working with an experienced debt collection defense attorney.
Thank you so much for the information!
Do you possibly know how much the amount I owe now will increase after the judgement is entered in case I proceed with the court? I believe it’s going to result in judgement anyway since I owe the money?
And could you recommend an attorney in Cleeland, OH?
Thank you!
The amount you owe can increase as a result of legal collection costs, and judgment interest that will be set by the court. I do not know your courts, so it is hard to offer an estimate of how much.
I sent you an email with contact info to 3 attorneys in Cleveland with collection defense experience.
Thank you! I appreciate your help!
Hello Michael. Have to ask to your advice again… I’m not really in the situation when I can get an attorney, so I have to handle this on my own. I called the debt collector and they are willing to set payment arrangements with $100 a month (did not really negotiate that amount, started with $50 and they wanted $140. Do you think it’s possible to get it lowered? The lump sum they want is $2,500 smth but I’m sure I’d get it lower if I had money to settle which I don’t). I have not agreed to anything. They said my balance is now $2,787 (which includes court fee for filing or smth). And they also said there would be 3% interest on the balance. My question is if there’s any sense in making arrangements with debt collector if they are going to get a judgement anyways and there’s same 3% interest on the balance? Is it better to go to court and then negotiate with the court?
Oh and one more thing. They asked which bank I use. Is it bad that I told them my bank name, would they have access to bank information? I’m worried because we still have joint account with my husband. Thank you!
Telling them your bank name means they do not have to take the additional step of trying to locate it themselves. But they would have done that, so no, you do not do any harm. And you can take your name off of that joint account with your husband.
Can you get lower monthly payments if you participated in the court process? Yes. Will you though? I cannot say. Each state has exemptions from judgment creditors. Ohio protects 75% of your wages; about 3500 value of your car; 125k equity in your home; about 11.5k of value in your household stuff; and about 400 dollars in your bank account is protected from judgment creditors in Ohio.
You can get additional protections from the court based on income and expenses, but that usually is something that comes into play after a judgment is entered. By showing up for court, and participating in the process, you could get a more affordable monthly payment out of the attorney for Capital One in person and in front of the court. But just know that their main goal is to secure an enforceable judgment.
Payments can be set up now, at court, and after judgment. The benefit of reaching an agreement and sticking to it, at least at this stage of collection, is that you do not have to look over your shoulder. That said, do not agree to something you cannot afford, or are 100% confident you can pay each month.
Thank you so much for your answer!
One more thing I’d like to ask… I think I’ll go with payment arrangements. As I understand I’ll have to sign agreement that in case of default on monthly payments judgement will be entered automatically. Is there a possibility to negotiate the judgement then or there will be no opportunity to do that and my wages will be garnished and whatever comes with the judgement. Thank you again!
In my experience, you can negotiate collection accounts at all stages, and even when you fall of a payment plan. But that is mostly from a lump sum payment negotiation, so when you are coming up with an amount they will accept as payment in full (even though you are paying less).
Once your wages are garnished it is difficult to get any reduction of balance negotiated, or lower payments. They have all the leverage and will get paid as long as you are at the job, unless you successfully contest the amount you are being garnished through the court.
my husband received a summons to appear in court for a cc debt in the amount for roughly $1250 (Amer Airlines CC). we didn’t have the money beforehand to make any sort of deal or payment plan with the attorney trying to collect the debt. the court date is tomorrow and luckily we have come into some extra cash (around $800). what is typically bare bones minimum % some of these attorney will agree to as far as a lump sum payment goes? also, what do we need to bring with us to prepare for something like this, should we have a certified check in hand and say “here’s what we can pay you, right here right now”. if we offer to settle for lesser, will they still try to get info into seeing our joint checking account? I am a nervous wreck and we have no clue what to expect. Thanks in advance for your help!
What is the court date tomorrow about? Have you answered the complaint and filed with the court?
The minimum you can settle debt for is a moving target. There are too many things to consider as to why someone would be able to settle for less than another with relatively similar looking scenarios on the surface. But the low settlements are often unrealistic if you are paying other debts on time (except for a car and home some times), and that fact shows on your credit reports.
If you are financial hardship is persistent, and you articulate that well, you could settle for the money you have available. Show up ready to disagree with anything the collector says, but be ready for an opportunity to discuss settling. If you do not get an agreement to settle tomorrow, there may be other opportunities, and for roughly the same amount (unless you look highly collectable).
Who is the bank/debt collector listed as plaintiff?
so apparently I got the situation wrong. love how i’m just finding out about this.
my husband missed the first hearing. Since he missed the first hearing, the judgement was cast. he hasn’t filed anything and if i was more aware of all of this from the jump, we wouldn’t be in this situation. I would like to also mention we are in MA, from my understanding they can enforce the law more? because we were notified that since he missed that hearing, he now has a warrant out for his arrest due to this small debt of $1200!! craziness!!
so now the court date is set for tomorrow. the plaintiff is US airways cc – which I believe is Barclay bank? will they require us to pay it in full now?
That’s a problem. Just be sure to show. You can still settle, and perhaps for the amount you have available, but the same thing applies – how collectable you look to them.
hello, does it matter who the court papers were given to and where or not I was even living in the state at the time?
I am not sure how much it would matter if we are talking about the situation you posted about last week. You have already been garnished on the judgment. What were the dates of the garnishments?
10 years ago I made the mistake of co-signing for an ex’s student loan. Now she lives out of state and I’ve responded to a summance to court. I have avoided dealing with this until now because of a divorce agreement holding her responsible, but now it looks like I will have to pay. The loan has changed from debt collector to debt collector over the years, is it better to see if they have proof and standing to collect the loan in hopes that the paperwork has been lost? Or should I try to settle as soon as possible?
I would encourage you to talk with an experienced collection defense lawyer in your state. There may be some options to pursue in defense of the lawsuit. Post the name of a nearby larger city and I will email you contact info I find.
How much is the suit for? How much of that can you come up with in order to settle (if you determine that is the direction you want to take)? You do not have much of a shot settling government loans. Who was the loan through? What is the name of the plaintiff suing you?
We have had collections go to court & did not respond (I know not good!) We didn’t have the money..I have been out of state lots to take care of my ill mom & husband was on short term disability. Then lost his job for disability reasons & now trying for long term. With help we are hireing a consultant to negotiate with these lawyers to pay off (lesser amount) our court judgments. Is this possible to do (being involved with courts this long..year or so?) Would we need a lawyer? They want $2500 upfront for cost (also have other debts out of court for medical & credit cards) & then 18% for them of any savings we get from negotiating interest etc. I guess if we save on interest owed or any principal it will be worth it but what if they can’t negotiate or its less than 18%. Understanding we will get $2500 back if goes well..but if it doesn’t we could owe more? Is this a fair deal? My sister in law passed away last October then my brother in May (both too young) so my mind is not in right place so desperately need some advice before moving on with this. I live in AZ. Your blog is so helpful to many..would so appreciate your time & thoughts. Thank you
Ked – You can work with professionals to get yourself sorted out with all of this. First, who is it you were sued by (name of plaintiff), and who is it you are hiring as the consultant?
I am a short sale facilitator currently working with sellers in Maryland. They are no longer married and one of them has 5 judgments against the property. one of which is for state income tax which we will try to settle. It appears that 3 of the judgments were credit card debt turned over to companies that buy the debt. These also appear to be more than 3 years old. There is a 4th that is Discover and also appears that it may be over 3 years old. It is my understanding that in Maryland, the statute of limitations begins when you miss your first payment and continue not paying at that point. Is this correct? And if so, how do we remove them from the title to go to closing?
Thank you,
Carol
Maryland has a 3 year SOL to legitimately sue in court to collect. That date starts ticking when you missed the first payment. But are we talking about accounts that had payments cease, and the initial court action was filed within that time allowed? Or are you asking about judgments that were entered in court more than 3 years ago?
Debt collectors have filed collection suits outside the statute limits, no doubt about it. Not sure if that is the case here, but going back and undoing those judgments is laborious, and not a slam dunk the older they are. It is best for most people to work with an experienced consumer law attorney, and one with debt defense as part of their practice, if looking to set aside or vacate a judgment.
If these judgements are more then 3 years old, but legitimate, that does not matter. Once a judgment is in place, it remains collectable, and for 12 years in Maryland (could not find where judgments are renewable in Maryland – but many states have a provision to renew a judgment for a fresh set of years). They will have to be resolved in order to pass title.
Thanks for the information. Unfortunately, we were just made aware of this issue because the sellers didn’t want to pay for a title search. I was hoping you could come with something I had missed, but I don’t see anyway that we can get this one to closing.
This is a great site you have, glad I found. Thanks again.
HI Michael,
I have just received a writ of execution from a collection attorney representing Capital One. They Sued me in 2010. The original debt was for $250, yet I had fallen on bad times and had let all credit payments lapse. At the time of the Judgement they wanted $1650 for court costs etc. I started making payments and I thought I had completed them but I did not, apparently, I still owed $200 of that and so now they are asking for $975. The Levy has not yet been placed in my account although I was served on May 22, 2014. I talked with the Attornys office about payment plans etc. but am unsure if I should start paying them until this levy hits my account. Also, not sure about how to proceed with making deposits, paying bills etc. I don’t want to bounce check, have car isnurance lapse and all of that. Any advice would be greatly appreciated.
Thank you,
Crystal
Crystal – Would you mind posting about your garnishment and bank levy concerns over on this page?
I want the focus of that page to address your main concerns. Please include the name of your state in comment you leave on the other page.
Hi Michael, the way that you help people is amazing, and I stumbled upon this site by chance, thank God and thank you! I live in PA and was served a complaint. It is from an attorney for Discover, because I haven’t made a payment on my account since December. The complaint says the total is for $6,700. I have been receiving calls from their office (Weltman, Weinberg, & Reis)
and I spoke to an attorney who said the total is $6,900 some now. I assume that is for the court filing. He was very cold and I barely asked him any questions. I understand that is what they are in business to do, so I just simply asked him if I could negotiate with them, so that it wouldn’t have to go to court. He told me that I could negotiate it now. I asked if I could possibly make payments, and he said that is only possible if I get a judgment against me. I am so confused right now. I don’t know why I thought they would let me make payments. I am trying to avoid a judgment, because I am deathly afraid of what will happen. The account is only in my name, not my husband’s, and I have no income. Nothing is solely in my name, but these things are…….a 2001 car, a vacant home that we used to live in, and an old pop-up camper. The home we live in now is just in my husband’s name. We share a joint checking account, with no direct deposits. Can they take money out of it? The most that is ever in it is about $800, and there is only $20 in it right now. What is the worst that can happen?? I do not qualify to get help from Legal Aid, because my husband makes $17 an hour, and they go by household income. I did call them and they told me that there could be a sheriff’s sale on the belongings in our home. Can that really happen, or would they just put a lien on our other home that we don’t live in? I feel like I’m having a nervous breakdown, so any help you can give me is appreciated. Thank you so much.
one more thing I forgot……..I don’t know what to do……do I “answer” the complaint with the court right away? How do I answer it?? thanks again.
Rosa – Before I respond more fully to your questions and concerns, I have a couple questions that, once answered, will help me with the rest of my feedback.
What other debts do you and your husband have than the Discover Card that Weltman Weinberg is suing for (whether currently paying or late with)?
Is there a mortgage on the vacant home, or is it owned outright?
Are you in western or eastern PA?
If you were to settle this debt for less, what is the lump sum amount you could pull together on short notice (sell a bike, or other personal item, personal loan from family member or friend)?
Thanks for responding so quickly! We do not have any other debts that they are suing for. There is no mortgage on our other home, it is owned outright. We are in southwestern PA. I am still trying to see what amount I can pull together…..what % would you recommend to offer them? Should I be worried that they could come into my home and sell our property, and can they take money out of our joint checking??
I just realized that I answered one of your questions incorrectly…….we do have other debts…….our permanent home and a vehicle are in my husband’s name only, and there is other credit card debt that is only in my name, which is approximately $23,000. Some of my cards are current and some are a little behind, but I have been working out hardship programs with the creditors. We do not qualify for free representation through Legal Aid, and we can’t afford an attorney.
I am going to email you an attorney to talk with about your options. He works with people to defend debt collection lawsuits all across western PA.
I know you are not at a place where you can afford legal help, but there are instances where you cannot afford not to have one. I am not saying yours is one, but you will be able to get a better handle on this by consulting with an attorney who defends collection lawsuits regularly.
My experience settling debts with Discover at this later stage of collection is that 50% is a hard barrier to break. When it is possible, it is due to documented hardships. You are not really in one with a second home.
Assuming you could settle this for about 60% of the balance you are being sued for, how long will it take to come up with the money (sell old pop up camper etc.)
Thanks for giving me the name of an attorney to call, I really appreciate it. Hopefully the initial consultation will be free. I don’t have much time left, because I got served on June 2. It says I have 20 days to respond, but the secretary said I actually have until July 1, so does that give me a total of 30 days? I wouldn’t be able to come up with 60% for a couple months or so on my own, so I’m sure the creditor’s attorney won’t work with me on that. I really wish they would agree to a payment arrangement without getting a judgment. If they would agree to that, they could get me to sign something that says if I don’t make the payments, then I would receive a judgment. Should I try to talk to them again?? If not, I am going to have to try to see if some family members can loan me some money, but I don’t think I could come up with enough. I am seriously stressed out, and this is wreaking havoc on my health, but I need to fix it because it is my fault that this happened. Thank you for your tremendous help.
My boss ran up credit card debt in 2011 on my Chase and AmEx personal cards, and then used my personal info to open 3 business cards without my knowing that he made me the primary on the accounts. By the time I realized, he had already run up large balances. I needed the job and couldn’t afford to pay off the cards, and he agreed to make payments until the balances were paid off in full. He signed a promissory note and has paid off 2 of the fraudulently opened business accounts. The remaining balance on the last 3 cards is around $29,000. I paid last month’s minimum balances myself, and now he is refusing to reimburse me and to continue making the payments. I filed a police report today and am pursuing criminal charges, but I can’t afford to make the upcoming payments and don’t feel I should have to since none of the charges are mine and were made fraudulently. I would appreciate any advice you could give me as to my options and what type of attorney I need to contact. I am in the Tampa Bay Area.
That is just terrible. I am sending you an email with contact details for a few consumer rights attorneys. Contact one, or all, and find out what their experiences are with creditors and identity theft.
Banks like Chase and American Express have fraud loss criteria that your situation will probably meet.
Thank you so much for that. I am at a loss of even knowing where to start, so any help is greatly appreciated. I am mostly concerned about the time lapse between the initial occurrence, and my not reporting it immediately because he was making the payments. Hopefully, a lawyer will be able to help me. Thanks again.
I had a default judgement awarded against me for a credit card back in 2007. Recently I was contacted by someone claiming to be from a law office representing the judgement creditor. I responded to them within 30 days, requesting among other things the contact information for the creditor. No such information was provided to me in their follow up response. In this day and age of fraud and theft of all sorts I want to be certain that any money paid is paid to the correct organization.
I have money available now to make a settlement offer. Is it possible that I can get the contact information from the court that awarded the judgement in the first place? Is it best to negotiate with the judgement creditor rather than this law office? Do I still have the legal right to negotiate with the judgement creditor if they have in fact hired this law office?
When making a settlement offer, is it best to start with a low figure and let them make a counter offer? My idea is for my starting offer to be the amount of the original judgement plus the legal and court costs as a lump sum, but minus the interest charges. My thinking is that if that amount isn’t sufficient to them then they’ll suggest a higher amount that includes either all or part of the interest and I can negotiate to a mid point dollar figure from there. I don’t want to end up paying a collection agency (the judgement creditor in this case) one dollar more than I have to.
Who is the judgment in favor of (name of plaintiff)?
Who was the attorney for Plaintiff?
Who is the attorney trying to collect on the judgment now?
You can call the judgment creditor in an effort to negotiate a settlement you can afford. They may tell you to contact the attorney to get that done. At least you verified you are dealing with the correct people in the process.
I can better help you target a settlement amount if I knew the players involved; and if your credit report is in good shape currently; and whether your reports show you are paying other debts timely?
My fiance just got served with a summons from a collection attorney. It states that he has 20 days to respond. He stopped payment on his HSBC credit card 2 years ago because he missed a payment, late charges, etc. and it snowballed out of control. Is there a chance that he could settle for the original amount? They are requesting interest and court costs, etc. Should he call the collection attorney and try to negotiate? What are his chances that he could settle this for less? or should he just hire an attorney?
I have always had great success settling for 80% of the amount in the lawsuit, when I have a customer that needs/wants a no muss no fuss rapid solution. Are you in a position to pay that much in a single lump sum?
I have come into hard times due to unemployment and have not been able to pay my Discover card. They are trying to sue me. I am in NY, and the attorneys are Forster and Garbus.
I do not want to file bankruptcy if I can avoid it, but they don’t seem to want to work with me.
I have a couple questions.
My house is assessed at about $86k, and I owe $60k on it. Can they force the sale of the house with a lien?
The second question, I am listed on the bank account an authorized user at a local charity. I am able to write checks (needs to be countersigned), deposit and withdraw money. (The other members are aware of my financial situation, and money is only withdrawn via checks). If Discover was successful in getting a judgment, can they take money from the charity’s bank account, since I’m listed as an authorized user? There is enough in there to cover the full amount of the judgment.
I think you are okay with the equity in your home and judgment enforcement in New York. But to be certain, run this concern by an experienced consumer law attorney.
I think there is no chance for your being an officer, and authorized signor for a local charity, to result in any risk to those funds. Here again, check with the attorney you should speak with.
How much is Discover Card suing you for? What amount are you hoping to get them to work with you on (monthly payment/settlement)?
Thank you for your reply.
They are suing me for $9k, plus I assume lawyers fees, which weren’t listed in the papers I was served.
A relative has offered to give me $1000 for a settlement, which I know is very low and I doubt they would take it, but it would be $1000 more then they’d get if I filed bankruptcy. If I filed bankruptcy I have no assets that would not be covered, NY has a $75k exemption for the house, and the car is only worth a little over $1000.
I have considered writing them a letter explaining them that I am on the brink of filing bankruptcy and explaining to them that If I do, there are no assets for them to take.
At this time. I am not able to make any monthly payments. My unemployment has run out, and I will be starting a part time job in the next week or so that will barely pay enough for the mortgage. The part time job is $200/wk, which I understand is below the minimum to garnish (correct me if I’m wrong on that).
All total, I owe nearly $40k in unsecured debt. I have not been able to make the payments on the majority of it since I lost my job. I contacted most of the creditors when I lost my job, but none were willing to do anything.
I also have another question about a lien on your bank account. Is there a certain amount you must have in there for them to be able to seize? Or even if you had $28.14 in there, would they take that?
1k is too low of an offer to settle with Discover, and that would have been the case even if you were not being sued. I know you and I would make sense of getting 1k, as opposed to nothing, if we knew someone was going to file bankruptcy. But that just does not work for these guys. Their policies and procedures have to scale, and from what I see, they would prefer to get 30% or more from less people, than accept 15% or less from more. In other words, the hardship letter you are considering sending to Discover, where you share what makes it so hard to be you financially right now, is not likely to lead anywhere productive.
The 40k you have in unsecured debts is insurmountable at this point. You can probably qualify for low income legal aid assistance to file the chapter 7 and be in and out for less than the 1k loan from family. And that course would probably benefit you credit wise (access to financing) sooner than if you just wing it from one debt emergency to the next. See this post for more: https://consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/
New York wage exemption from judgment garnishment is 90% of wages in the last couple months, and 30 times state/federal minimum wage, so you are good there.
You know your home is protected.
Your family bank account is protected from levy for $1740 in New York, which is third best among states. So no, they could not take the last bit of money you have for bills and groceries.
Hi Micheal.. I got sue by target credit card that I own $11,000.00. I was unable to paid due to lost of my job my only income .. At the time I lost my job I call to notify them of my unemployment.. I have use all my saving to pay them.. The last payment I have made was $40.00. Which was the very last penny I had.. I live with my boyfriend with our 2 kids at the I got sue.. We have recently got married.. He had open a join acc with just 2,100.00 due to just show proof we r married but this is not my money.. I have no saving other than that he open.. No cell phone, no job no means of in come excepted for his job.. Which he is just meeting end met. He have mortgage , car, school and me to take care of..
Pl I need ur advice my court date is on the 06/17/14.. Thank u very much
I sorry I forgot to mention I live in Long Island NY
Reshna – When did you last pay the target account?
In 2012
I would consult with an experienced debt collection defense attorney before taking any next steps. I can email you contact info to a few in the area if you like? Most attorneys will offer a no cost initial consult on this type of thing.
Do you have other collection accounts than this one? If so, with who, and what is the total estimate of those balances?
Yes.. With chase and citi bank all together $3,000.. Can u tell me pl what most likely happen when I go to court.. I did when to c one attorney and he said to that I have notting for them to take and I will have to wait…
The court process when dealing with unpaid credit card debt is about as stressful as contesting a traffic ticket. The cases can move that quickly too, due to how many people do not bother to show, or contest, who end up with default judgments.
If you want to defend against the collection suit, you have a long road ahead studying civil and local court rules, while familiarizing yourself with your defenses. If you are thinking of showing just to let the court know your unable to pay, you will wind up with a judgment, and maybe an affordable payment plan.
What is your goal for this, and the other two collection accounts?
You should look to connect with an attorney again, now that you have been sued, and are married.
I am in the process of getting my home refinanced. I have a judgment fom unifund on the title of my home deed. The realtor stated they may do a partial release so that I continue with my refinancing of my home . I live in Texas. They have the judgment up to 70 thousand dollars. This is for a 13 or more old credit card. Can they really get that much money? The credit card was around 10 grand that was sold over and over and they picked it up. I do not want to agree to anything tied up with that much money. This did go through the court years ago I was so stressed with debt and no job I did not go to court. This monster keeps rasing its ugly head. It seems it is never going away….
Deborah – I am not sure about the partial release. It sounds unlikely based on my experiences with Unifund. Are you taking any cash out with the refinance? What amount of equity do you have? Did the loan officer or broker already send Unifund Partners a demand request letter? Are you able to pull together cash resources in order to negotiate an affordable settlement with Unifund?
Judgments are renewable in Texas after 10 years. How much was the judgment for when it first was entered in the court?
Help! I hired a company to represent me when I owed on my credit card. I paid the company to represent me. They were in negotiations with the company for some time. There was a judgement against me for a lot more than what I owed. They continued to charge me the interest and then legal fees. My negotiator said we could still work with the company. I didn’t hear back from my representative for a long time. I tried reaching out to them and every email, fax and phone number came up as unknown. Come to find out, they were being sued for fraud. So this whole time I didn’t have anyone negotiating on my end, which I thought they were, and now I am getting my wages garnished. Is there anyway out of this?? If I knew they weren’t defending me, I would have reached out to the company’s attorney’s to figure something out before they started garnishing. So lost….have no clue what to do! Heard the company representing me is now claiming bankruptcy.
Who was the company you hired to negotiate a settlement on your judgment?
Have you looked into your garnishment exemption qualifications in your state?
Hi Michael,
I owe $4800 to Honda Finance. Last payment was August 2013, and the property was repo’d December 2013. There is a collection attorney firm handling the case. So far I’ve received about 4 form letters and a handful of phone calls since February 2014. I’ve not answered any of the calls though.
I was curious what risk I have of being sued on this. Also, I would be willing to settle for the right arrangement, but I really don’t want to negotiate over the phone. I just don’t feel strong about my ability to do that. Is it possible to do that in writing? I understand I would want the agreed upon terms in writing anyway.
Thanks much for your help.
The risk of being sued is real. Do you have other bills showing on your credit reports that are being kept current? Do you have more than one collection account showing?
Settling the deficiency balance will not be overly complicated. Who is the last debt collection agency you heard from (if any yet)? It may be easier to negotiate the deal with the debt collector that gets the account from Honda Finance.
Can you pull together about half of the balance owed?
Thanks for your response.
Yes, my other bills are current and there are no other collection accounts. The firm handling the collection is Ross Gelfand LLC. My impression is that Honda still owns the debt, but has that firm representing them. I could probably manage half of the balance. Is there a form letter that can be used to make that offer to them?
Thanks again, Michael.
You can use a letter to make the offer, but phone calls are more affective for getting a deal done, then you get everything documented that you agreed to before paying.
Use some of the tips outlined here: https://consumerrecoverynetwork.com/question/settling-charged-off-credit-card-debts-with-collection-company/
Thank you for your help, I appreciate it.
Thanks for your reply. Yes, I am. Any other suggestions. What can they use as my income if I can’t come up with a lump sum right away. I just want to know if they try to threaten me. I only have my disability, alimony, and child support. And do I hold out for something in writing to have the judgement removed and removed from my credit report.
If you reach an agreement to settle the judgment, it is common for the American Express attorney to file a notice of satisfaction with the court. A local data miner will scoop the court records and send that to the credit reporting agencies. That is one way the credit report will get updated. You can expedite that if you were trying to get a home loan or something by using a conforming copy of the court record and sending that to the agencies as part of a dispute.
Use the tips contained on this page to prepare yourself to negotiate the debt. There is not much more they can threaten you with. In most states your home is at risk from a lien; your wages can be garnished in all but a handful of states; and your bank account can be levied.
Michael,
I joined a debt relief program in July 2012 after a lengthy, costly divorce. I had two accounts Cap. One and Amer. Exp. with a settlement obtained in Capital One. The Amer. Exp acct was turned over to an attorney’s office who is a debt collector. The firm has filed a Judgement against me in the amt. of $16k.
My only source of income is disability, alimony, and child support. I did receive our martial home in the divorce without a mortgage where my three children and I continue to live. The firm won’t discuss anything with the debt relief program and I currently have close to $8000.00 in my account with them. What is your advice? Of course, my credit rating has gone down to 652.
Becky – Some creditors do not work with debt relief companies. AMEX is a usual suspect in this regard. Depending on the circumstances, you would be able to settle the judgment with the attorney for AMEX yourself. I would target 50% on the low side, but be prepared to pay 60, or even 80%.
Are you open to the idea of settling this on your own?
Hi,
I am in OR now, but have a default judgment in CA. I not longer live in that state. The Judgment is from AMX and is approx. 5yrs old. I have heard nothing from them and no bank/wage garnishment. I need to settle so I can buy a house. How do I do this with the least cost. I also have several foreclosures from the same time period, two of which are foreclosed and still show active on my credit. I might need an attorney to clear it up. Should I hire on from CA or will OR suffice? All this damage was done in CA.
Jim – Is money showing as still due and owing on the foreclosures that show on your credit reports? How much is the American Express judgment? How far away from Portland are you?
Shawnda – It sounds like you may qualify for partial or full garnishment exemption. Call the court clerk, or stop in the court and see the clerk, about how to schedule a hearing to contest the garnishment as causing you and your family a hardship.
I was sued and ignored the documents sent to me. (Young, dumb, and scared).
Principal: 6,722.63 Adjustments: 6,358.09, Payments: 1,811.35 Current Due: 11,269.37
Interest: 14,783.21 Payments: 10,032.02 Current Due: 4,751.19
The total interest added to my account is $14,781.21. Balance due is $16,091.56
The interest is growing at 25%.
My credit is good, I have little debt, etc. But this nightmare that I avoided for the last 10 years is haunting me and I need to fix it.
Is there anything I can do to lower the interest or to fight of some of the interest that has already been charged. It grows so fast, I can’t keep up.
Any advice would be appreciated.
Susie – Are you making payments monthly? How are those payments occurring? Who is the plaintiff, and who are your payments going to?
I have a Judgement from Weltman Weinberg & Reis its about 7 years old. The orignal debt was 2k and the judgement a ballooned from 4k to 12k. They’ve never been able to get any money from me, I have no property. I qualify for chapter 7 and I’m getting ready to file, I don’t really want to file. If I call them and let them know that I’m gong to file chapter 7 and offer them 2-4k to settle, do you think they will take it?
Richard – It is worth a shot. Who is the judgment creditor (plaintiff in the suit)?
The Plaintiff was Capital One, the debt was a credit card.
Thanks. My experiences suggest your settlement target is too low given the situation and it being a Capital One judgment.
So its been about a year since I posted this question and finally got enough money for a lump sum, I have around 10000 to settle a 12500 judgement. Capital on and their lawyers have never been about to get a dime over these 8 years and the judgment is about to fall of my credit report this november. They have been relentless in trying to garnish bank accounts, subpoenaing loan application to try to find my employment.
So this is the update, I called them they ask me a few questions, they ask why should they settle I told them that I am ready to file chapter 7. I told them I would have to borrow the money from a relative in order to pay the judgement. I offered 8000 and she ask a supervisor and accepted, she said she would send a letter to my email advising of the settlement. So they settled for about 65%.
Thanks for updating the comment thread Richard.
I am sure it feels good to put this behind you.
Odd thing happened today, I received a check from capital one stating refund for account.. I settled months ago with their lawyers for $8000, the original judgement was 4200 with interest was 12500. They sent me a check for 3800 back as a refund, have you ever heard something like this?
Yes, I have seen refunds for settled debts show up out of the blue. It is often the result of some regulatory settlement, a recently decided court case that impacts prior deals, or some file audit caught an irregularity.
Who was the law firm handling the collection action in court, and who was it that you negotiated the judgment settlement with (if different)?
It was Weltman Weinberg & Reis in Ohio and I just called them up and made them an offer and they accepted.
You could call the Weltman Weinberg law firm and see if you can get any additional information. I would contact Capital One too. Let me know what they tell you.
How is Capital One reporting this on your credit?
Hello,
About 3 years ago i was sued in court by Discover Card. We settled on $25 a month which was being payed through a debt settlement company on my behalf. After about 6 months the $25 payments were coming back. Without my knowledge the Attorney sold my debt to another attorney who will not negotiate with me. How can a debt that is settled in court be sold to another attorney? Is this legal?
LORI – I cannot tell you categorically what happened in your situation was legal, but what you describe is common. Debts are sold regularly, even judgment debt.
Are you unable to set up the payments again? What did your debt settlement company have to say?
My daughter, “L”, has a $2300 judgement against her for: $1600 original credit card debt, $333 interest, and $375 court costs. She makes less than minimum wage, much less than the amount for garnishment under federal law, has no car, or other real property to take. I am thinking of offering to settle the debt & interest for 30 cents on the dollar for the loan & interest, plus costs in full – total $1000. Is this a good strategy, bearing in mind there is no way the collection agency can recoup any money for the foreseeable future? (This was originally HSBC credit card debt, then assigned to LVNV holdings).
Sorry Michael, I forgot to mention she has no bank account and is paid in cash, as I said it’s about $80 per bi-weekly pay period less than the federal minimum for garnishing. She is a high school dropout & has little to no prospect of earning anything other than minimum wage for the near to mid-term. Reading earlier posts, maybe I should settle for $1,300 or so (60% of total)?
If you are prepared with the money if the negotiations stall out at a larger amount than you originally posted, you will have this knocked down quickly.
Dave – You do have a good strategy. You may even be able to get LVNV to accept 30% on the judgment if it is really old (a few years), and due to the lack of income. It is more common to settle at a bit of a higher percentage than that on judgement debt though.
Michael, thanks for the quick response! Yes, the debt is 6 years old. I will follow through with your advice and start low, and see where we go from there. As I said, I can go up to 60% if necessary. I assume a phone call to Machol & Johannes, the attorney acting for LVNV is the way to go? Thanks again.
Machol and Johannes are who to contact.You can call LVNV first if you like, but can expect them to direct you to Machol.
Michael;
An update – whilst I was saving up the money to settle, Machol & J went ahead & sued & got a garnishment against L’s wages. As she makes the bare minimum, however, the garnishment was waived based on Federal/Colorado state guidelines for how much can be garnished ($0 in her case). Am I still in a position to negotiate? I would assume so, as she is (and probably will remain) “garnish-proof”. Should this make any difference to what I offer initially? (It was going to be 30%). Thanks!
Dave
It would not change my strategy if I were you. If you are adding costs, like had been mentioned in prior comments, you really come in higher than 30% of the total. And I would be working from a total, not segregating the debt by balance, interest and fees, court costs.
If I have a judgement against me for unpaid credit card debt in NC can they attach it to property in another state?
Samantha – Talk with an attorney that specializes in asset protection or debt collection (from the consumer side – not the creditor) about this. What you are concerned about is generally possible, but can require getting the judgment in North Carolina recognized by the courts in the state where the property is located.
Hello Mr. Bovee,
I live in California. September of 2013 I received a letter from Kenosian & Miele, LLP, the attorney’s office for a collection agency, I believe, named BH Financial Services, LLC for a debt from original creditor, CitiBank. The letter stated that if I don’t contact them, I will get sued. I didn’t remember owing CitiBank but I got scared and didn’t know any better, called them and arranged a payment plan and signed a Promissory Note with BH Financial Services, LLC as they required that I do so. I made 4 payments total for Sep. 2013 through Dec. 2013 through my bank account.
The thing is, the debt stated in their notice is under a name similar to my old name. But my old first name is a hyphenated name (as shown on my previous social security card), and the name on the notice is just written together. My name changed when I became a citizen in 2007. I had a couple credit cards with CitiBank years ago but I don’t remember owing them anything. I haven’t had a credit card probably since 2008. So I decided to check my credit report and this debt wasn’t even on there (I also found a few other accounts and another name linked to my credit report that is also similar but has a middle initial and an address that I never lived at. I am disputing the aforementioned with the credit bureaus. I think I might be a victim of identity theft). I talked to a debt relief/credit repair place in town and was advised that I should not have called or signed anything with the collector (but I did 🙁 _ so they said not to make anymore payments so I stopped making payments since my last payment in Dec.2013.
A few days ago, a copy of the Summons was placed in front of my doorstep, I was not home so I wasn’t personally served. I am being sued by these people and I don’t know what to do. I don’t even know if this debt is really mine. If it is not my debt, by signing the Promissory Note, does this mean I am liable for the debt regardless?
Assuming it is a debt of mine that I had forgotten about, having signed the Promissory Note, would this have revived the statute of limitation? What should I do at this point? I can’t afford the filing fee for the Answer to the Complaint nor do I have the funds to negotiate a settlement. Please help!
Ellie – You did make some missteps, and if the debt is not yours (which is what you need to get to the bottom of), it will be simpler to handle. You need to be talking with an attorney with debt collection defense experience. It sounds like you may qualify for low income legal aid if you cannot afford filing fees, so check into that first. There are law clinics run at some universities (professor and students work together with qualifying participants), so check to see if nearby university law programs have anything like that going.
I can refer you to an experienced consumer law attorney for help defending against the suit, but that will require you to hire/retain them.
Thank you so much for your time!
I can only afford 30% to 50%, anything more and I may go into default.
I just do not see much of a shot at negotiating a settlement for under 50% based on current trends with your situation. 50% is something of a long shot, if I am being frank.
If you cannot get this wrapped up, you can save up money to make up the difference and settle the Capital One account post judgment.
I received a court summons in January of this year, unsure of what to expect. I did not research how to proceed. I appeared for the summons and thought that if I could explain to the mediator my situation, surely I could have the debt forgiven. Unaware that I would only have three options for Capital One, all with the end result of some type of payment plan. I decided to go with the option to have a trial. The attorney for Capital One presented me with a statement of my last balance. And they have a recording of me agreeing to terms I don’t remember. The attorney is going to submit the recording at the trial. I owe including court fees, $1900 as of today. I now regret my decision and would like to know if its to late to settle the payment before trial and for a reduced amount? I’m a mother of twins and unemployed, not to mention very concerned and afraid….please help me!
Michelle – You can negotiate a settlement with Capital One (through the attorney they have suing you) now, or even after a judgment were entered in the court. The savings is not going to be great. Can you come up with 60 to 80% of the 1900.00?
I was paying before my credit card bill almost one year and I lost my job and after 4month i. had serjery and right now I m in disability and I miss my payment ,right now my acount is frozen my safety box freez to and I have court date what should I do please help
Aralia – The debt collector is acting on a court judgment. You will want to let the court know that the only money in the account were from disability etc. You need to get your concerns in front of the court. Look for a low income legal aid office near you and see if you qualify for assistance. You can call the court clerk and find out what steps you can take to contest the bank levy. I am not sure about the risks to the contents of your safety deposit box, but you can learn more about that when talking to an experienced debt defense attorney in your state.
Michael,
You are a great person! Thank you so much for your help!!
Matt
Judgement is in my name and the business is a general partnership but the banker told me the other day I never switched bank accounts to partnership, they (business checking and savings accounts) are still listed as sole proprietor . I need to be able to deposit the checks that come in, do their 24hr hold thing then pay all electronic bills and then pull the remainder out away. But I’m worried they might “capture” one of the checks within the 24hr wait period. Hence new bank account outside of the county. All of this is until they receive there 9.2k then I’m hoping they will accept a couple more thousand and call it a done deal.
Matt – Given that info I would personally be looking to open another account. Not close down the current one, just buffer its use until settling off the remainder of the judgment balance. I would target about 3k to settle the rest of it.
Michael,
Would you happen to know the likelihood of them throwing another levy on my accounts again to get the remaining 7.2k , or do they wait until they receive the money they all ready levied (up to 2-3 onth wait for money from sheriff) as this is a business account and I need to use the account (deposit check and withdraw asap) frequently. Thank You Very Much!!
Matt
I do not know their cycle. But I would not put any money in there for more than a day until this is worked out.
Was the judgment in your name or the business name. Do you run a DBA? How are you structured?
One more question, Does it make sense to open another account somewhere and do business out of that new account? Thanks for all your help!!
Matt – Opening up other accounts can make sense to some, but what limited information I have about your situation, it would make more sense to negotiate a lower payoff for the remainder of the judgment after the 9200 bank levy is applied.
First off thanks for the list of attorneys in my Texas area. One attorney is familar with Unifund partners LLC and wants to reach out for a settlement. One attorney says I need to file an exempt property code stating my home is my only homstead and get a release to contine getting my refinance. To make matters worse my morgagate people reached out and the lawyer that has my judgment wants 69 thousand dollars. I am not sure why they reached out and found the attorney. I was told they did not have but limited information and they placed my account on hold. I am upset because I feel they put me in a bad situation and that Unifund will want more money because I am trying to refinance my home. I was not wanting them to be aware of this. I am know more consused than ever. What a nightmare that seems to never end!!!!
The mortgage company did you no favors. If your goal was to settle, you are now going to be at a severe disadvantage. What is the name of the mortgage company, and the loan officer?
I would encourage you to work with the attorney suggesting the homestead route. And I would NOT use the mortgage company that just cut your negotiation angle off at the knees. Perhaps that attorney could recommend one to you.
Thank you for the help.. I’m not going to file bankruptcy. I thought if I told them that it might be my only way out of this, I thought they would make some kind of deal right away! Is this feasible ? In other words they don’t seem to want to negotiate until they receive that 9,200. I’m worried they might slap another blind levy in the near future, and that is what I’m trying to avoid!
Thanks again!
Matt
Thanks again!
Matt – Bankruptcy is a real option for many folks that every flavor of debt collector will be in contact with. Turning down a consumers low ball offer and getting notice from the bankruptcy trustee a couple months later is just standard. It is built and factored in to the sophisticated debt collectors business model. And the threat of bankruptcy will not get a nod from credit card issuers. So… no, not feasible. Some other compelling reason to settle, like fixed income, medical concerns, or other types of sincere hardship, can result in better than average settlements being negotiated.
That levy is in motion through the legal system. It is not getting backed out. You can negotiate a settlement, and for a fair savings, but they have the leverage right now. Keep accounts with a bare minimum in them until you resolve the judgment.
Hi, I had a discover card that I stopped paying on (due to hardships) I believe the last payment I made was in the late 90’s. Last week a law office put a(blind) levy on my bank accounts. I had no Idea about this, They told me the last payment I made was in 2004 and a judgement was refilied in 2006. They say I owe them 16k and they captured 9.2k out of my accounts. They said I can pay $350 a month on the entire amount owed to stop interest. Then in a couple months when they receive the 9.2 from sheriff can try to negotiate. I asked them to lift the levy and I would pay them 12k, they said no, they can only set-up a payment plan until they receive the 9.2. Is this all legal since may last payment to that card was over ten years ago (California). Also, I read some where that I can request the original document with discover card with my signature on it, if they can’t show me that the whole thing get’s thrown out. Is that true?
The bank told me the money goes to the sheriff on April 4th. Would it make sense to call the attorney/debt collector back (the moore law group) and tell them if they can’t negotiate I’m going to have to do bankruptcy? Thanks Very Much !!
Matt – You can call the Moore law group and talk about your options to settle this as an alternative to filing bankruptcy, but that is not likely going to result in the 9200 being released. But the chapter 7 bankruptcy trustee could claw that back sometime after you file.
I am not sure where you are reading, but the time to request anything from Discover was years back, and before a judgment was issued. There really is not much to bring up to the court to get this bell unrung, at least, not this far down the line.
I have a judgement on my credit from a couple years ago. The debt is about $7700. The credit card was only in my name. I have been summoned to an asset hearing in couple days. I’m wondering if they will make me pay the full balance or if they will settle for less. I also want to know if at this point it is legal for me to take my name off of my joint checking account with my husband. I do not work as I just had a baby in Dec. I haven’t worked since last May when I taught school. We cannot afford another monthly payment. We are trying to get a loan but won’t know about that until tomorrow. We wont receive the $ for a month if we are able to get it bc its a home equity loan. I have been asked to bring my last 3 months of bank statements and checkstubs from employment and proof of my home. Do I have to bring my husbands info since I don’t work? He isn’t on the account I’m being summoned for. I am on the home loan. Please help. Any advice appreciated. I am very nervous as I have never done anything like this. We settled with our other debts several years ago. This one refused to accept a cashiers check and only wanted acces to my bank account which I refused so I let it go. I know that was not the right thing to do to just ignore it, but that’s what I did.
Brandy – Anything like this that involves the court should be run by an experienced debt collection defense/consumer law attorney. I know money is tight, and an attorney of the sort you need to consult with may charge a little for the consultation time on something like this, but it is nearly always worth getting expert advice on how to progress with your hearing, and ultimately your goals.
You can settle with the judgment creditor now, or after the hearing. My experience would suggest you would have a better settlement savings outcome after the asset hearing, and once they have a good view of your lack of income.
You should be able to take yourself off of any bank account you choose to, at anytime.
These days, paying a settlement you negotiate via phone authorization (so long as you have everything documented before hand), is normal and even advisable over using a cashier check.
Unifund partners LLC put a judgment lien on my house. I just found this out while trying to refinance my home. It is for $18 thousand dollars. Do I need to try and reach out to them or get a real estate attorney? I do not want to open a pandora box of them calling and threatening me or for me to make it worse by reaching out. I heard once you call them the cylce starts over. I need knowledge how to handle this sticky situation. This credit card was over 10 years ago when I had loss my job. Bank one credit card sold my account. I do live in Texas. The 7 years have passed it has fell off my credit. I understand I made a bad descion and am unclear how to fix this. however I know they bought my account for pennies on a dollar and want to make a profit on my hardship and stupidity.
Do you know any good real estate attornoys in the Garland TX area? That is if I need one of them?
Help in Texas
Do you have any ability to pool together a realistic settlement amount? What if you could pay off the judgment for, say, 10k? How long would it take you to raise the cash?
When you think of an attorney to help you with this type of thing, you really need to work with one that has debt collection defense experience, and not many do. There are several in Texas you can consult with, but frankly, you may be past that point with a judgment this old.
What do you suggest that I just live with it?
You never gave me any attorney’s names to consult with? I do have equity in my home?
The loan processor said it will never go away. She said I was going to have to deal with it. But you said it is to late. To late for what? To late to contact unifund partners LLC or too late to contact an attorney? Are there stature limits in Texas? I am not following what you are saying?
Deborah – I am not sure what you mean by live with it. What is your goal with the account? Are you looking for some way to get the judgment set aside? If so, that is going to be a stretch with a judgment this old. You are going to have to consult with an experience consumer law attorney, and if you take that path, will need to factor in what it will cost for the attorney to take a swing at this.
If not trying to get the judgment set aside or vacated, you are looking at needing to settle this to clear title. It is not too late to contact an attorney to help you, but it is more realistic to work with one to settle this for as much savings as possible.
The SOL to renew a judgment in Texas is 10 years. And the renewal process is very simple, so this issue is likely not going anywhere, and the judgment is likely growing with interest.
I sent you an email a moment ago with contact details to a half dozen attorneys somewhat near you. Run your scenario by one or more and see what type of feedback you get.
I am trying to decide what to do because I have no plans on selling my house at this time. I do not like the fact that is attached to my house. I received a letter from Dynamic Recovery Solutions saying they are trying to recover debt from bank one Texas current owner International Collection Services. This is the same credit card different amounts of money $810.78 versus $18 thousand as Unifund partners only less money. I am not sure if it has been sold partial. I called the lady is researching it. She stated she just got it in the office about 1 month ago. This is around the time it dropped off my credit. I am not sure what to make of it. They have the last 4 digits of my ssn#…
I do not want to open the door with Unifund to start them back to calling me again…
more drama in Texas
I am from Minnesota. I had a Citi credit card (Home Depot ) I believe North Dakota citi.
Minnesota debt Collector had called us . We owed 14k and settled at 8k. We paid 7k immediately and made payments on the remaining 1k. Our agreement was they would take an auto pay from my checking account of $50 a month for 4 months then a final balloon of $800 to be paid, which we thought they would also deduct from our checking account, but apparently we were supposed to mail the $800. Because we were confused on that, they call it default and are now wanting 9k. I am at a loss of what to do. We did not sign anything on our agreement. We were dumb and naïve. Never thought this would happen. That 7k we paid was all of our savings and with 3 kiddos , was tough to make. We are now just heart broken and lost. They send us letters all the time. Judgments etc. Any input would be appreciated. I have other debt I am trying to manage as well. This one I just don’t feel its fair I should have to pay 9k again. In my mind I had this debt down to $800. I get the fees because of our miscommunication, but $7200 🙁 Help please
Courtney – Who is the debt collection attorney in Minnesota you are dealing with?
The law firm is Rausch, Sturm, Israel, Emerson & Hornik LLC
Washington state – Long before we were married my husband had a judgement filed a lien against our home from an upaid credit card balance with Discover for roughly 8-10K. It has been some 8 years ago or so. It has been passed to a new attorney recently. We don’t have joint bank accounts because of this and he has had fairly steady employment, but I think they just gave up looking.
We are able to borrow some money from someone to pay on it now. The balance is over 18K at this point. They newest attorney told my husband they would settle for 6K and have sent us a settlement letter for the 6K. Is this kosher & will it take care of the lien on our home? Do they legally have to release the lien and file paperwork to indicate satisfaction of the judgement upon payment of what is on this letter? How can I be sure they will file the paperwork with the County. We tried to get home equity loan a few years ago & it was on the title report so we were denied the loan. I’m concerned if we ever sell we may be in for a surprise. I don’t want the 6K to be a “down payment”, if you will, and then still be stuck in the same boat we are in now or start getting garnished or worse my bank account levied.
HF – Cross reference everything I highlight in this report, with the settlement letter the attorney sent on the judgment. Post any questions you have after that in the comments of that page and lets go from there.
Yes, they should update the court that the judgment has been satisfied. But if they do not, you can use a proper settlement agreement and proof of payment to get that done too. I would want the judgment creditor to be the one doing that if it were me though.
Back in August 2011, Citibank brought a suit against me for a card that I did not pay for 6 mos. To my knowledge, it was not sold to a “debt collector”, only the Attorney. I did not respond quickly enough to the lawsuit and it was added to my credit report at a judgment. Since it entered judgment status, I made payment arrangement with the attorney representing Citibank. Unfortunately, I was not aware of how the interest was accrued over a long period of time. Long story short, I’ve been pay $90 a month on a $2700 judgment (which was the balance owed on the credit card account) and $520 in court/attorney fees. From my calculations, I thought my last payment was to be next month (April 2014). When I called to verify this, I was surprised with the news of owing $975.36 because of the interest.
I do not want to continue to pay the interest, especially when I’ve paid the debt. How should I proceed? Do I ask to settle the account now? Is that even a possibility? NC has a limit of 8% (I believe) and their Judgment Payoff calculator is a POS. Literally. A POS. I don’t understand it and I’m irritated that it’s been accruing this interest for so long and now I owe $1,000 more than what I originally owed, EVEN WITH COSTS ADDED.
Any advice is appreciated.
Thanks!
Unfortunately, judgment interest is what it is. You can often settle the remaining balance is a lump sum, but be prepared for 50% being a good deal, and perhaps not even on the table.
Who is the collection attorney? Did you have a written agreement that outlined your payment arrangement?
Bernhardt & Strawser, P.A in Charlotte, NC.
I do not recall receiving an agreement, only verbally over the phone.
Would it be beneficial to send a letter stating the amount to settle the debt for? Especially since the entire debt (without interest) is just about paid?
I nearly always suggest working out the details of the settlement verbally over the phone, making sure that anything agreed to is in a written agreement before remitting payment.
Hi Michael,
I just want to get some more advice regarding this situation I asked you about a few months ago.
I have not made any payments to this law office since my balance that was “charged off” and the amount entered into the judgment was paid. Since my “regular” payments have not been received since March, my credit report has been updated. Citibank shows as “paid, closed” and of course the judgment hasn’t changed. I’ve received one letter from them, which was Friday. They said they’ve not received payment and that I have ten days to bring my account current. I’ve not responded to them, because I do not know how or if I should or how it will effect me if I don’t.
I know the judgment stays for 7 years, but do you think that if I pay them, they’ll be able to remove it? Should I pay them? I’m only paying the law office at this point…..please help. I just don’t know what to do.
You are likely going to have to come up with some form of an agreement about the remaining amount. How much can you come up with to settle the remaining fees?
You are not going to be able to pay any amount and have that result in anything being removed from your credit report. This will have to age off. And that is okay, your credit can still heal, and more so when the judgment is shown as paid and satisfied on your credit reports (while maintaining all other elements of a healthy credit score).
Have you connected with a consumer law attorney for an opinion?
Thank you for your response. I have not contacted an attorney. I do not know who to contact. Would you recommend I send a letter to the suing attorney asking for my balance, along with original paperwork? I don’t want to ignore this, obviously. I just wonder what the suing attorney can do at this point. Would you be able to help draft a letter to the suing attorney?
If you are in North Carolina, call and talk about your options with the attorney I emailed you contact details for. I would ask for an accounting of all payments and how applied. But talk to Chris about that too.
i have a judgement of $2418 in 12/4/08 its in my credit report.. but i have the conversation recorded that i made a settlement offer too the credit card company.. and i paid for it..what can i do now..should i call the judgement people?
james – Did you settle with the creditor after the judgment was already entered in the court? If so, does the judgment show as satisfied on your credit reports?