How to Settle Credit Card Debt with a Judgment
One of my credit cards I fell behind with sued me and has a judgment.
Can you settle credit card judgements like other debts
—Stressed
Short answer
Yes, a judgment can still be settled. Settlements can be negotiated at every stage of the collection cycle, but settling before a lawsuit is filed is easier and usually saves more.
Key points on this page
- Settlement is possible at any stage, including after a judgment has been entered.
- The largest savings usually come from settling with the original bank after a few missed payments.
- A judgment is enforced through bank levies, wage garnishment and liens on real property.
- Judgment balances keep growing at the interest rate set by the court, and most states allow a judgment to be renewed, often ten years plus another ten.
- Wage garnishment removes most of a creditor’s reason to negotiate, so act before it starts.
- If you cannot fund a settlement, bankruptcy can stop a levy, a garnishment or a lien.
The short answer to your question is – YES! CRN does assist in settling debts like credit cards where there was a lawsuit and then a judgment entered against you. Settlements can be negotiated at all stages of the collection cycle.
There are challenges to settling credit card debts that have reached the lawsuit and judgment stage. Before I address the challenges, I want to point out that the best time to settle credit card debts is before a lawsuit is filed, and even before the account is placed with a debt collection attorney.
Watch my brief video about some of the differences between settling credit card debts with your bank and debt collectors compared to negotiating with collection attorneys whether they have a judgment or not.
While this may not be instructive to your judgment debt, you may have additional credit card debts that have gone unpaid and I want you to be aware of the following:
- Settling a debt with your original creditor (the bank you had the credit card with) after having missed a few payments is not only possible, but in your best interest. In fact, reaching settlement early will often achieve the best savings result when negotiating is done correctly.
- You may end up with credit cards that are charged off and placed with outside collection companies. This is the next best (sometimes the best) opportunity to settle a credit card account you could no longer afford to keep payments current.
- If your overdue credit card account lands in a collection attorney’s office, you can still settle the debt before any court action is filed, or at a minimum, negotiate favorable payment terms.
There is a science to navigating the collection stages I briefly outlined above. Timing, balances, who your credit card debts are owed to, and your ability to come up with the money needed to settle the debts – all will affect the strategic design of which account to settle with first, second, third etc…. It is important to have a plan to follow if you want to systematically and successfully settle debts and save the most money in the process. CRN is excellent in assisting people in this regard.
If you want to learn about how to settle your debts no matter what stage of collection you are in, we have a ton of resource pages to help you. I recommend starting at the beginning of my debt settlement section.
If you are floating out there with several unpaid credit card accounts with no real financial resources to handle the situation, or a plan for doing so, you owe it to yourself to learn if you would be better off filing for chapter 7 or chapter 13 bankruptcy before a lawsuit is filed, or now that a judgment exists. You can consult with a bankruptcy attorney for free. I recommend talking with more than one.
Collecting on credit card judgments can be challenging too.
The primary ingredient found in any debt settlement recipe, whether there is a judgment or not is… money. If you have enough of this ingredient you need to be aware of a few things.
A judgment is just a piece of paper. It’s the court sponsored enforcement of that piece of paper that is the problem. You could end up with liens placed against your real property, your bank account levied and wages garnished directly from your employer. There are even instances where a sheriff can show up to take a look around at your “stuff” and inventory personal items that can be taken to satisfy a judgment (this happens, but relatively rarely).
Judgment debt, whether past due credit card bills, personal loans, medical bills and other debts, are easier to negotiate and settle while maximizing your percentage of savings results if:
- A bank account to levy cannot be found because one in your name does not exist, or does exist but is maintained with little money in it;
- If a W-2 wage source cannot be located to garnish and;
- Where there is no real property lien, or where the lien is filed, but has been in place for some time and remains unpaid.
The one thing you can control is whether you have a bank account with your name attached. If you do keep a bank account open, realize most bank levies are attempted at the beginning, middle and end of the month – when you are most likely to have deposited a pay check, or other money to cover bills.
If you have sources of funds electronically deposited, you may want to elect to have paper checks issued to you until the credit card judgment debt is resolved.
The lien on property will generally not involve forcing the sale of the property in order to satisfy the judgment. You should look to resolve the judgment prior to selling the home (negotiate a settlement before listing if possible), or refinancing (settling before a lender does a hard credit pull is often best).
Wage garnishment is a major concern. Once your wages are attached the creditor has little reason to work with you at resolving the debt for less because they will continue to get paid unless:
- You prove you meet garnishment exemptions in your state
- You leave that job
- You satisfy the judgment
Warning: Your credit card judgment debt grows from interest and can often be renewed!
Interest is accumulated at the rate set by the court, or the maximum allowed by law in your state for judgment debt. While you may be able to be creative in how you avoid paying the judgment you must realize that the balance of the judgment is likely increasing.
If you are struggling with overdue bills and other expenses and are unable to come up with a plan to get rid of the judgment or lawsuit through a negotiated settlement or payment terms you can afford, the fact that the debt is increasing should concern you. Stop and consider what your options to resolve the credit card judgment will look like next year. The year after that.
Judgments do have a “best collected by” date, but can be renewed. Judgments have a shelf life with a time frame specific to your state. Most states allow for a judgment to be renewed prior to expiration. For many, this is a ten year time line and renewal allows for an additional 10 years. That’s a 20 year shelf life!
Identify all resources you can tap to fund a settlement offer or payment plan successfully. If you cannot reasonably come up with the money to settle the debt, or make payments after reaching agreeable terms, look to bankruptcy to stop a bank levy, wage garnishment or lien on property.
Those are the unfortunate realities.
I highly recommend anyone with a judgment, that needs to be resolved in order to buy or refinance your home, to watch this video interview I had with a former debt collector: https://youtube/QpdDks73QUw
It is always best to put a plan together to address delinquent debts before a judgment becomes the concern and you are forced into crisis mode. If you have other debts, you can still put a plan together that includes resolving the judgment too, but it is important to not waste any time in doing so.
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If you would like confidential help you can use any of the boxes below to connect with me. You can also post in the comments below for feedback. I answer those regularly.
Not sure where to start? Click on the big blue “Get Debt Help” button at the top of the page.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
I owe 10,181 on a credit card with Allegacy Federal Credit Union. As well as a line of credit with them for $2000. They are about to send my credit card account to a lawyer. They would like me to pay up and get current but that is a big chunk of money than I would have to borrow to do so and than I would have to pay that person back. There is no way to get current without getting further in debt, I owe out my whole monthly pay check to bills. I tried to settle with them to pay off a chunk if they would forgive the debt but they stated that they would not consider to do that unless there is a judgement against me. Should I wait till the case goes to the lawyer and settle with him or what?
Jessica – Credit Unions, especially smaller more local and regional ones, rarely offer great settlements. You are looking at 70 to 80% of the balance in some of these situations. And that they want in a lump sum, or only over a few payments.
You will likely have better (or any) opportunity to make arrangements with the collection attorney, or with the courts if need be.
Have you thought about chapter 7 bankruptcy in order to get a fresh start? Anything preventing you from going that route?
First of all I live in Michigan, and I recently received a letter from Stillman Law Firm saying they are trying to collect a debt for their client FIA Card Services. I have 30 days to respond or they assume the debt is valid, I had a card with BOA is this now FIA?, the amount is $3200 and my credit report says the account is closed. I know the debt is mine and I want to make it right, it started at $11000 and I was on a 5 yr. repayment plan when I lost my job for a couple months 2 yrs. ago and fell behind. I tried to settle with them then for a lump sum and they said they couldn’t because I was on the 5 yr. plan. I don’t want this to go to court, so should I contact BOA or call the attorneys office that sent me the letter. I don’t have enough for a lump sum settlement now but could knock it down in a 1 year payment plan with no interest, will they do that? Please help
james – FIA is BofA collections, but now they have contracted with an attorney debt collector, so you will likely have to negotiate the deal with the attorney.
It is possible to settle with payments of 12 months, but that is much more common with third party debt collectors and debt buyers. Are you trying to set something up where you pay the full balance back over 12 months, or get say, 50% discounted and pay the half you agree to over that time?
Michael- it would have to be a reduction at least 50%. what are my chances of that, or would I get a better deal on a lump sum settlement. what are my chances of being sued in your opinion? Any advice is greatly appreciated. Should I even try to contact BOA?
james – You can contact BofA, but they will send you to FIA or the Stillman collection agency for any discussions about the debt. Your chances of being sued or quite high at this point. I do not think you will be able to set up a payment plan for 12 months and get 50% off of the balance owed. I do think you have a good shot at settling in a lump sum for that amount, or even a touch lower. Lump sum settlement is better at this point, and before you get sued. Payment plans that last as long as you need them to are definitely an option when paying the full balance, and also when settling in certain situations (not this one in my experience).
If you want to get coached up on how to get your deal done, consider filling in the consult box in the right side bar and submit. I will get that over to a specialist you can talk to.
I’m going to try to start with BOA see where that gets me, I will post any interesting progress that I may make, or not make, with the hopes that it will help others in this situation. The reason I’m here is because they kept increasing my credit limit knowing that I was going to use it, meanwhile still only a minimum payment every month. The account started at $3000 and went to $15000, then I was late twice within 6 months and BAM they increased my interest to default rate and I simply couldn’t afford it. Then I was set up on the 5 yr. plan and paid the balance down to $3176 and that’s when my employment situation changed. While I am now working again with all my other expenses I do not have that kind of money saved up, but could come up with around $1200 now. I was considering talking to an attorney about going to court and defending this as a predatory lending practice what is your opinion on this.
Thanks
Called BOA and found out that the attorney that I received the letter from is no longer in the picture, they gave me the name of another attorney Hanna Associates that is who has the account now.
I have always found Hanna and Associates negotiations to be simple and to the point. Let me know how it goes.
james – I think the cost of the attorney to defend, using a predatory lending angle, would be a waste of your resources.
Hi Michael, I live in NJ and my wife and I stopped making payments on a capital one credit card in January last year. The account was sold to a collection agency in May, but we didn’t have any money to offer/respond to settlements. We received a letter in the mail from the court as well as from an attorney that are we are being sued for the full amount – $4800. I’m wondering if I still have any settlement negotiating power. I’m pretty sure there hasn’t been a ruling against us yet and we have some money that we could pay now because of a bonus. I’m wondering whether I should contact the law office holding the account and if so what would be an amount you think they might be agreeable to.
Jason – Your current situation with Capital One is covered on the site here: https://consumerrecoverynetwork.com/question/capital-one-lawsuit-negotiate-with-bank-or-contact-their-attorney-other-credit-card-debts-tracy/
Once you read through that page, and some of the informative comment exchange, post any remaining or new questions in the comments on that page and lets go from there.
He went through a consumer proposal and is making payments for the car loan which we gave back and the credit cards which were in his name. They could not add mine or do this because there was not enough money to add mine in. I cant do a consumer proposal or even declare bankruptsy because I have no income.
Did you get a chance to see the reply I sent about my husband. Just hung up from Capital One threatening legal action. Why do they say to call your mortgage company and let them know about this. I told her I wasent going to call them. There is no equity, but, back to my original question, Our mortgage is with First national which is uptodate. It is up for renewal this coming december. Should we be worried at that point? I am sure they will do a credit report. Payments are updodate on the mortgage
ssm – Do you live in the US, and if so, which state?
What happens if you have a judgement against you in ontario for unpaid credit cards. There is absolutely no money coming in for me. Our house is in both my husband and my name. He has gone to consumer proposal and has a repayment set up for his card and loan but they could not combine them because i have no income at all We have a mortgage coming up at the end of the year. My questions is, Will we have a problem renewing the mortgage with the same company. Is is an automatic renewal. Mortgage payments are fine no problem with payments
ssm – Is your husband working with a credit counseling organization in Ontario Canada?
My name is Cassandra, Im 25 years old, live in New Jersey, and am being sued from Capital One for $5,600.00 of credit card debt.I obtained the debt when I was married. I was a stay at home mother of two kids and my husband was the bread winner and paid my bills. We separated approximately 2 years ago and our divorce was finalized in February of last year. Since then, I was pursuing college again for auto mechanics using Financial Aid. I had just been approved, when I found out I was pregnant and couldnt attend the program. My son was born in November.
I was served papers from New Jersey Superior Court Special Civil Part on January 13th. I just picked up the answer packet today and am wondering after researching online- whether I should answer and how I should answer. Even more than that, Im wondering how do I resolve this debt when I have no money, no income, and only own a 2003 sebring that kbb states is worth $2,250. What is going to happen in court?
Cassandra – You should look to local low income legal aid resources, or perhaps a nearby law school program, in order to get some hands on help with answering the lawsuit.
Is this the only unpaid bill you have?
Michael,
Thanks for getting back to me. Yes, its the only outrageous one. The rest are under 500 dollars so I dont think they can do much.
Hello Michael,
I am a current student trying to finish school and settle old credit card debts. I currently have a Judgement on me that totals about $5300 includes all court fees and such. The original debt amount is about $2556 without the interest. The judgement was filed back in March of 2011 and at the time had an agreement with the attorney collecting the debt to pay $100 per month. I have been paying that and a little bit more when ever I could every month since 2011. Till this day the amounts paid for have totaled $3850. I no longer see the original collections amount on my credit report by the collections company like I did back in 2011 and all I see on my credit report as of today is the single public records of a Judgement amount for $2556. Is it normal to not see the original collections debt on your credit report in this situation? I am concerned at how it disappears without any notice from all three credit reporting companies.
Boon – It is normal for collection accounts to fall off of your credit reports. It mostly happens because of laws that limit how long negative personal financial info can stay on. Collection accounts for credit cards will typically stay on for 7 to 7.5 years from the date you last paid your creditor. The judgment is part of the public record and has its own shelf life for reporting (normally 7 years). It will age off your credit report with no notification too.
Hello Michael, I am in a bit of a bind I have been subpoenaed for deposition for getting in debt with a capital one credit card and am due in court or deposition office this Friday…This all started in 2009 I lost my fulltime job and fell behind in my payments. Over time they sold the debt to Rubin and Debski who in turn filed a motion for Judgement for me to appear in court.. I took some bad information off a family friend who said I would be better off not
showing up and hope it gets written off..I know how bad that sounds but I did just that and never showed up..nothing happened, the letters stopped coming etc..until 2 weeks ago when I was served ( or my wife was served on my behalf ) to appear for deposition…I’m from the UK originally and am unfamiliar with the practices over here…Just what can I expect in a deposition, Im worried they will garnish my wages or force me into a payment I cant possibly afford ( I apparently owe 2378.80 an increase of 1500 $ from where it started somehow ..im not sure quite how they came up with that figure)..I have never fully recovered financially since loosing my fulltime job and currently work part time,i rent an apartment which my landlord
is my boss I also don’t own any vehicles or expensive household items. Just how far can they push things with regards getting into my bank account or my wages..Also what are the consequences for not showing up for deposition with things of this nature, could I wind up in jail..Any light shed on the matter would be hugely appreciated…Thankyou Dennis
Dennis – First, it is always wise to speak with an attorney when you need legal advice of this nature. That said, there are instances where not showing for court for an asset discovery deposition like this can result in a bench warrant being issued. So show up at all court dates. It sounds to me, at least from what you shared, like you are fairly insulated from their forcing payment. You do not have “stuff” they can take, and may not make enough to be garnished, or can meet your states exemptions, so that leaves a bank levy. Just bank carefully until you resolve this judgment – it is not going away and will grow.
Hello Michael: My mom is 84 and in a nursing home (stroke). She has a small rental income $800 and Soc Sec. The rental income will end this year due to reverse mortgage rules and her not living there the bank will foreclose. The house is for sale 8 mos., the agent thinks he may have to get the bank to take less than owed to market it. So no $$ there to get. We hope to have her on Medicaid soon which will take the $800 she gets anyway and her Soc Sec. She has a card with Capital One – many years with GM first. Owes nearly $20K on it. I have been helping to pay it but cannot any longer. I would be able & willing to continue to pay if they would go to 0%. What are my chances of getting this in your opinion and where do I start or how do I go about it? I believe she would be judgement proof now.
Thanks for any suggestions or help.
Joe – It does sound like your mom is judgment proof at this point. If payments were not being made there would not be much they could do to collect, as social security cannot be garnished.
You could probably get a monthly payment at close to zero percent for the life of the balance through a credit counseling agency. Call the number for a credit counselor in the floating box to the right of any page on this site and talk to them about what that payment might be. The payment may get as low as something like 340.00.
Dave- Just was served today from American Express for $4800.00, the debt is over 1 year old. What are my chances with settling with the local attorney that will represent them? What should I expect and what have you seen with American Express settlements lately? I have over 90k in credit card debt and am working dilegently to get everything settled in the coming year or so. I have no judgements yet as I am trying to settle them before they even have a chance to do that. Should I wait till everything is settled to start trying to rebuild my credit or is there something I can be doing now to start the process and get it going. What are the best ways to rebuild my credit, what do you recommend. My parents might be willing to cosign on a car loan or piggyback on one of their cards to help me out. Thank you for your time.
Michael,
I have received in the mail, a “Notice Of Court Proceeding To Collect Debt” for an Aspen Card which is in the amount of $1,845.77. I live in the state of Ohio and it was dated 1/7/2014. I assume it is the last step before garnishing my wages, which are small, and eventually commission only. Thus, I assume I have 2 days to contact firm or is it 15 business days? I have a little cash saved, but clearly nowhere near the amount listed. I remember never having a credit limit greater than at most $800.00 with them, so why the amount and I thought is was unsecured?
Undoubtedly, I should have done something sooner and I am gravely concerned I have no time to prevent this. Do I have any options at this point? Contact law firm tomorrow etc.
Any feedback would be greatly appreciated. Thank you.
Pete – I apologize for the late response. I was called out of town last week unexpectedly. Did you find an answer to your solution? If you still want feedback please post a comment update with all that has happened with the collection account (if anything).
It is not uncommon for collection balances to balloon from late fees and default interest rates. Smaller balances can quickly double. Add court costs and attorney fees to that and smaller balance collections when sued can get way out of hand.
Michael,
No apologies needed. Thank you for the response. Sadly, I allowed this to go beyond the 15 days as shown on Notice Of Court Proceeding To Collect Debt. I am to assume they can now directly garnish my wages or do they have to file a formal law suit in Ohio? I never really made much, do not have much i.e. older car, no property and such. Financial duress can render one helpless, depressed and feeling worthless. I will have to deal with this, as it seems the law firm representing the two parties, Jefferson Capital and Aspen Card will continue to seek the bloated amount. Honestly, I was even paranoid they comb these websites for information.
Once again I appreciate the response. Upon my return, I assume I better step to the plate and take action with my financial train wreck of a life.
Thank you greatly.
Pete
Pete – Do not allow any of this stuff to get you down. You can bounce back from it when finances are better; use chapter 7 bankruptcy to discharge all of these debts; or navigate the collection process without assets, meeting garnishment exemptions etc.
I would encourage you to speak with a nearby consumer attorney about your options. Most offer no cost initial consults. I can help you located one if you like?
Pete – It is not paranoia if you know they are watching….
I have a medical debts that was passed to a collection agency. I do not have a judgement yet, and I’ve been making payments every month. The original debt was $1,200, but now the balance is $400. Today I called them to pay off the debt. I asked for an agreement letter saying they will change the collection status to “Paid in full” in my credit report. They said they can’t do that, but they will for sure to change the status when it’s paid off. They suggested to pay my debt over their web site using my credit card. Is this safe?
Dave – Who is the collection agency? Have you verified they are legitimately collecting for the service provider? If you are confident about who you have been paying already, paying on line is not likely going to be an issue. How have you been paying them up to now?
As far as negatives on your credit report go, it is rare to get a collector to agree to remove a negative they are reporting. Some of the instances I have seen this happen (admittedly fewer and fewer), are with medical debts. They not only should change they status to paid and show a zero balance owed after you have paid, but they are required as a furnisher to provide only accurate, current, and complete information. They are not doing you any favors with the reporting, they are doing what they are supposed to.
The collection agency that I’m dealing with is “Berks Credit and Collections Inc” (berks credit dot com). Yes, I verified that the debts came from my doctor’s office. They put 20% fee or interest, but they said it was applied by the doctor’s office, not by them. I must have signed the agreement with them for this fee. So far, they’ve been taking agreed monthly payment from my checking account.
When I complained about them not giving me the agreement about changing the status on my credit report, they suggested to call credit bureau after 3 business days I submit the payment and have them to change the status. At that time, the credit bureau will see that the balance with this collection agency is zero, so they will be able to change the status to “Paid in full”. I’m not sure if this true.
Dave – You can dispute any information on your credit report, but only sorta like they said. Online disputes, and sending in written disputes, are more the norm, not calling. If Berks Credit is doing the credit reporting you can wait a few weeks and you will likely see them updating the credit reports. Is it someone else showing up on the credit report?
Hi Michael,
I have multiple judgements against me and have been on a monthly payments. My family is willing to help me and let me borrow some money to resolve all my debt, so I called the collection law firms and tried to make a settlement. Most of them are saying they can do 10-20% discount, but I still cannot afford it. I heard that one of the debt settlement strategy is telling them about my hardship. I do have a job and make decent money, but my expenses are very high since I have many family to support. I was not sure how convincing this was. The question to you is if I exaggerate or lie about my hardship to settle with less money, can they find it out? Is this a good strategy?
I actually tried this with one collection firm. I said I’m currently in between jobs and am in a different financial situation. Then, I tried to settle 40% discount. The agent said he will turn in hardship to his manager. I was afraid of they will try to check my job situation or bank account and find out I lied, so I stopped him saying I will try to see if I can get some more money and hang up.
Your advise will be very helpful. Thank you in advance.
Andy – I do not like it when there is a need to fabricate anything in order to negotiate an affordable settlement. Does it work? Yes, and it is difficult for them to verify certain things you could say. They have real time access to your creditor reports, the ability to skip trace public records, information you may have provided creditors or collectors along the way etc. You can often accomplish the same things without stretching your condition by just being more vague and artful at the same time.
What complicates things here, or at least the savings you can realize from settling, is that some or all of these are judgments. Are any not court judgments?
Debt negotiation is not for everyone, so perhaps working with a professional would be better, but that has a cost too.
If you add up all of the debts you want to settle, what is that amount?
What amount of money are you able to pool together from family in order to settle with?
Michael,Im a 75 year old retiree living on ssi in Calif.,I was served a judgment from discover card for $6450,the original balance was $4400,I haven’t responded to anything yet,I just received a settlement offer from the LAw Office of Krista L White & Associates,P.S.,Can they levy my SSI,should I try to settle with the Attorneys,really confused and scared,thank you Sal
Sal – You refer to being served a judgment, but I want to be certain about that. Were you sued for collection by the Krista White collection law firm some time back, with the result being the recent judgment you have been notified of? Were you just recently sued, but the case is still ongoing, and there is a settlement offer on the table?
If you were sued some time back did you ever participate in the court process?
You can typically settle debts at any stage of collection, so while your answers to my above questions will affect my feedback a bit, not by much. Your SSI is protected from garnishment. But if your SSI is mingled with certain other types of deposits in your bank account, you could be at risk of a bank account levy if there is already a judgment entered in the court.
Should you settle? That’s up to you. But the first question in this regard I have is – Can you settle? Can you pool together the cash to negotiate a deal and pay it in a single payment?
I am in the process of refinacing my home. During the processing the lender discovered I have a lien judgement against my home from Citibank from 2005 for the amount of $15,000+ with an interest rate of 6%. I would like to get this judgement resolved and would like to try to negotiate the amount can this be possible? I think that I received the summons in the mail but missed the court date and they won the judgement.
John – It is indeed possible to settle something like this. It is best if there has not been a demand request or other type of heads up sent to the judgment creditor. Do you know if the loan officer/broker sent any type of payoff requests? If not, be sure that they do not. Post what you know and lets go from there.
What amount of money can you pool together quickly in order to settle the judgment?
No they did not send a payoff request he had sent me a copy to verify that this was indeed my judgement. I informed him that it was. I told him that a couple of years ago it dropped off my credit report and I just assumed it was gone after the 7 years it was there not know it was attached to my home. As far as a settlement amount of course I want to pay the lowest amount that they will accept but I really need to get this off my home because I plan on putting it on the market this year. With you knowledge what would you think the dollar amount would be accepted (40%-50%?)and should I use and attorney to broker the settlement
John – I would recommend settling before you list, refinance, etc. The longer a judgment has not been paid, the more likely you can negotiate a decent settlement. 40 to 50 percent is doable, but with a lien already on the property, you may have to be ready to offer a little more to get this done.
You really do not need anyone to do this for you. But I understand the desire to work with someone who does this everyday. I would encourage you to call in and talk to one of the specialists at 800-939-8357 about getting some help.
Hello,
I have read numerous comments and not quite found one to be similar to mine. I’m married, live in Indiana, and have a Capitol One credit card in my name only, and was my debt before we got married, which fell delinquent for somewhere around $8,000. They ended up getting a default judgement because I didn’t respond. It’s been about two years and I recently received a wage garnishment summons to appear in court. My question is can they garnish me if I am an independent contractor and only make about an average of $350 per week before paying estimated taxes? I also have payment arrangements already made with the IRS and State which leaves me with very little to survive on before this garnishment. Since it’s my debt and my credit card, will they take my wife’s income into consideration, or just my income? Do you think the judge may refuse to garnish since I don’t make much and need to pay the IRS and State of Indiana?
Chris – There is a really good chance the court would prevent the garnishment. But they are not going to know about all of the stuff in your comment (and your other bills), to measure how you stack up against set limits to garnishment in Indiana unless you get a hearing to contest the garnishment. You are entitled to contest this. Have you requested a hearing, or otherwise followed local court rules in order to get in front of the judge?
Hi Michael,
I’m in an unique situation and need your advice.
For one collection company called “PEROUTKA & PEROUTKA”, I have three active cases/accounts that I have judgements against me.
1. $1000 – CapitalOne : Lien Judgement
2. $2000 – CapitalOne : Lien Judgement
3. $16,000 – USBank : Consent Judgement.
I do not have money to settle with full amounts, but hoping to settle all three cases with $10,000. That’s all the money I can afford by borrowing from family. Can you please advise on negotiating settlements for multiple accounts at once?
Thank you!
For a side note, I thought about bankrupcy too, but I have some properties that I cannot lose, so Chapter 7 is not an option for me. For Chapter 13, I’m afraid of that my employer finds about my bankruptcy. I cannot take that chance with this employer.
Peter – What are the payments you agreed to in the USbank consent to judgment? For how long have you been making them? How long have the Capital One judgments been in place?
Are there other unpaid bills out there, and if so, what are the balances, who is collecting on them now?
For USBank account, I’ve been making $50 for almost one year now. I remember at the court, we came up with this amount because I was jobless at that time. Then, we agreed to pay $50 per month for 6 month and re-discuss about the new payment plan after that, but I never got a call from them.
The CapitalOne judgements have been in place for almost 1.5 years. Since then, I’ve been paying them $10 for the first case and $20 for the second case.
I have more credit card debts that I’ve been making monthly payments to collection company called “SCHLEE & STILLMAN, LLC”. I do not have judgement on these debts due to the payment agreement.
1. $9,000 – FIA Card Services – $50 per month for one year
2. $5,0000 – Citi Bank – $20 per month for one year
Thank you, Michael!
Peter – I have some tips and feedback to offer. I am going to base them off of some additional questions I can ask you on the phone. If you are up to it, give me a call at the number in the signature line of my email I sent with the attorney info.If you get voice mail leave a message with your number and I will call back. Let me know how late I can call – I am on pacific time in Idaho.
Hi Michael,
Thank you very much for your time over the phone. I’m doing what you suggested and will post the result here.
As I went over my documents, I realized something new for those two accounts with the collection law firm called Schlee.
1.
– $8,000 (This is the balance after paying $50 per month for one year. Never missed a payment)
– FIA Card Services
– Before the court date, I made a settlement with them for $50 per month. The case was dismissed after one year. No judgement.
2.
– $4,200
– Midland Funding LLC as successor in interest to CitiBank
– I met their attorney at the court and turned in a stipluation with agreeing $20 per month because of hardship (no job). Since then, I never made a payment and never heard back from them. Now it’s been almost one year. I know the court will send a letter them to dismiss the case because it’s been one year. Then, they will probably find out about no payment. Then, I think they will enter judgement against me due to the stipultion agreement.
I don’t have much money to settle these cases. I will have to see if I can borrow some money from friends and family. Maybe I can borrow $4,000. Is $4,000 reasonable settlment amount for both cases? Do you think I should try to settle two cases at the same time or second case only since it’s in a danger of judgement. Any suggestion will be great.
Thank you!
Peter – I am glad I was able to talk with you about some of the variables involved with you reaching your goals.
Couple things:
The stipulation you signed off on with Midland Funding LLC would normally have been filed with the court after this long without payment. You can call Midland Funding and negotiate a settlement on this, and be clear when asking about what will be done with the prior stip since it sounds like it was never filed with the court.
I do not think 4k is enough to settle both. Given the info I have on those 2 accounts, and what I know about your situation, I would target settling with Midland at around 2k, give or take a couple hundred.
FIA settlement targets vary. If there is no judgment, consent, or stipulation (which is a bit odd), I would still be targeting 40% as a best case scenario. I have seen lower settlements, but they are very situational. It can also matter who FIA has the account out with for collections. Also, negotiating a debt when you are making payments already is often going to complicate things. You may not have to contend with that given that your monthly payments of 50 dollars are so low, compared to the total balance.
Because of the history on both the FIA and Midland Funding accounts, I would suggest paying the settlement amounts you negotiate in a single lump sum payment.
Thanks again for your quick response.
One more questions for you. Would it be better if I talk to creditor like Midland Funding LLC or FIA Card services directly? or with their collection law firm, Schlee?
Peter – If it were me, I would first communicate with FIA and Midland Funding, and try to negotiate the debt directly. They may refer you to the attorney, or another designee for collection, but you are prepared for that.
Michael,
I first called Midland Funding LLC. They said I had to talk to the collection law firm regarding my account, so I called there. I was able to settle at $2,000. Thank you very much.
Now they wanted me to fax them my letter with “Written authorization to remove cease and desist” for my account. I’m not quite sure what this is about, but they said they need it so that they can email me the settlement agreement form. Tomorrow I will get a casher’s check or money order and send it to them after I get the agreement.
A question for you is that what should I do before I send the check to them. I know I need to get the settlement agreement, but how do I get their signature on the form, and etc.
Thanks!
Peter – Follow with the fax to them. Your file is flagged a certain way and following through on that request they made is just something Midland and other collection companies do in order to open up clear communications.
You do not generally need a signed settlement agreement in these scenarios. A copy of the agreement to settle on their letter head, and proof that the payment was made pursuant to the agreement, is generally all that you need to protect your interests later on if you need to. If you do run into a stitch on any of that later on, post an update here and I can help you if need be.
Hi Michael,
After settling the Midland debt with $2,000, I called another collection law firm that has my other three accounts:
1. $1000 – CapitalOne : Lien Judgement
2. $2000 – CapitalOne : Lien Judgement
3. $16,000 – USBank : Consent Judgement
As you suggested over the phone, after explaining my situation, I offer them $8,000 to settle all three accounts. Then, they came back with $11,000, which is not bad. However, now all the money I have is $8,000. I told them all I have is $8,000 and can’t afford $11,000. They suggested to put $8,000 and pay monthly payment for the remaining. Of course, I do not like this option because it will not remove all of my judgements right away. Today I will try to see if I can borrow $1,000 more from family. When I call them back tomorrow, what should tell them? Today I really felt that they would not go below than $11,000. It’s possible that they will be stubborn and keep telling me to go with the monthly payment plan. Please advise!
Thank you,
Peter
Peter – You may hit a place where negotiations stall. Sometimes that is because you have unrealistic expectations for what the other side will accept; sometimes the other side is not reasonable given the facts and situation; and sometimes time is your friend.
While you risk them fully skip tracing and profiling a better collectible number to your files, you could call back if the family loan is a success and up your offer, while indicating in the most sincere manner that you have exhausted all resources. If the offer is turned down, revisit this with them in the last week of the month and offer the same amount.
No matter what happens, in the end analysis, the monthly payments for the difference still allows you to accomplish your goals. I prefer lump sum, and so do you, but middle ground is not a bad place to be, especially with judgment debts.
Hi Michael,
As you suggested, I tried to settle all three accounts (total $19,000) with explaining my job situation and this only opportunity with my family loan, and we ended up settling it at $10,000. It took two calls. Considering I had judgments, liens, and bank levies on all accounts, this was an amazing deal.
For $4,200 Midland debt, I settled it at $2,000. For the $8,000 FIA card debt, I decided it not to touch it since the monthly payment is small.
This wasn’t possible without your help. Thank you very very much, Michael!
Congrats working through all of that Peter!
Michael,
Could you please send me some contacts for experienced debt defense attorneys in Maryland?
Thank you!
Peter – What area of Maryland?
I’m in College Park, Maryland. We are in Prince George’s county.
Thank you, Michael.
Peter – I sent an email with contact details to several attorneys. The last 2 are licensed in DC and Maryland so may actually be closest to you. But I would not get hung up too much on distance, as it is often not much of a factor. If it is, the attorney would likely mention that, and if they do, ask for a referral to someone they know nearer you. This type of consumer lawyer is a relatively close knit bunch.
Hi Michael,
I’m live in Ohio. I am being sued for 1,519.88. It’s a credit card debt that I owe and was sold to Cavalry. On Dec. 15, 2013 I received a letter in the mail from the County Municipal Court stating that a complaint has been filed against me with the court on behalf of the following named Plaintiff: Cavalry SPV I LLC, ℅ Levy & Associates LLC and a copy of the complaint attached. I was given 28 days to respond in writing to the attorney for the Plaintiff, who is Yale R. Levy or a Default Judgement would be rendered. Within 3 days of my response to the Plaintiffs attorney, I am required to file a copy of my answer, containing a Certification by me of the date and how I served my answer to the Plaintiff, or his attorney, with the Clerk of Courts. The letter is stamped with the following: If you have a defense to the complaint, you must file your answer by Jan. 8, 2014. As of today I have not responded, mostly out of fear of speaking to the Plaintiffs attorney and it being used against me, but also because I don’t fully understand how to legally proceed. I can pay the debt in full right now, but would that stop any further action. I can’t afford an attorney, but I don’t qualify for legal aid. Any advice would be appreciated. Thank you.
Jacqueline – If you recognize the debt as your own, and are in a position to pay the amount you are being sued for right now, your calling to offer full payment will not result in much being used against you. It should result in you resolving this out of court and avoiding the judgment. You do want something documented from them that they are dismissing the case if you pay.
If you make the call to resolve this, post a follow up comment and update with what took place and lets go from there.
Michael,
I have called the attorney’s office that is suing and spoke to a women who stated she was not an attorney, but that she was able to speak to me regarding my case. I offered $1000.00 today if they would accept that as payment in full and drop the suit. She stated she was only able to authorize a $1300.00 settlement, but she would speak to her manager and have her manager get back with me today. If we do come to an agreement, I will ask for them to send me a letter/email stating that the account is paid in full and they will drop the case. Will that protect me from them trying to obtain any more money from me. Also, I don’t want to give them my bank information, so am I correct in thinking that I need to wire the money to them? Jacqueline
That’s great Jacqueline. Be ready for some form of counter offer, or for them to stick to the 1300.00.
If you get the deal outlined in a written agreement prior to remitting payment, there really is not too much to be concerned with about them trying to get more from you, or using that account to pull more moneys later on. That type of thing was more of a concern years back, but not so much these days when dealing with a legitimate debt collector or collection law firm/attorney office. I do recommend you set up a different account to pay your settlements from in this report. If you have more than this account with Cavalry SPV to contend with, I would encourage you to use a set aside account.
I have a judgement, Capital One credit card, from back in 2007, they attempted to collect in 2009 (Sheriff at the door) and we really had nothing they could take… so they didn’t. Last we’ve heard.
Now I’m at a point with a few extra dollars saved up that I’d like to get that cleared off and no longer have that black mark on the credit report. I have that and a lot of medical bills here or there from the past years… can’t do them all, and we actually rebuilt enough credit to get out of a land contract and refinance, but the lender wants to see this cleared up.
Is there a good strategy for contacting the law firm? I’m wondering if they will be interested in settling this for something less – oddly the original shows at 1600 and that’s what comes up on the credit report and some of the other court documents and paperwork from the judgement/collections show 1800 or 2000.. so they tacked fees on as it progressed.
Thoughts on what I should do? Mention the 1600 and say I’ve got a little extra and was hoping to settle? Go in strong and ask to settle for 800? I don’t want to put them off but I don’t want to destroy what little I’ve accumulated either!!
Bill – In many judgment scenarios you are going to be looking at an inflated balance beyond what might show on the credit report, or prior court filings, due to judgment interest being applied. What judgment interest is referenced in the court record (if any)?
Until you know the balance you are negotiating from, it will be difficult to nail down a realistic target. In most judgement files I have worked on 50% of current balance is an optimistic settlement target to negotiate to, while 80% is not an uncommon worst case depending on the situation.
Calling and making a realistic offer right out of the gate is often the best approach. You can start lower, but realize the more you up your offer by starting too low, and grudgingly going up on your offer several times, can give the other side pause.
If you want some helpful tips and guidance while you are going through the process of doing this on your own, consult with one of the CRN specialists at 800-939-8357.
Well, the judgement cost was 1665.31 … then with interest and other things they’ve managed to tack it up to 2073.47. About 146.59 in interest, but have tucked in “costs” and “Feels’ on the original judgement as well as notice/demand for payment from 09. Since this was 4-5 years ago and they tried a collection at that time and there was nothing to collect and we’ve heard nothing since then do you feel they’ll be more interested in settling? I have a feeling it was written off in their minds.
What I’m wondering now is should I contact Capital One , do they have any relationship to the debt/settlement and would I have better luck with them or should I go directly for the attorney listed on the documents?
My end goal would be to get it to show up as satisfied on the credit report. I’m sure my best course of action is to get whoever I deal with to give me something in writing (i.e. pay X$ and we will consider this satisfied), right?
By the way.. I really think what you are doing here is quite helpful. Very cool to see that you are actively assisting people. May not seem like much to you, but this kind of stuff can feel overwhelming at times.
On a complete side note to make this a longer and more rambling message. I can’t fathom how I even got a credit card at the time they said I did.. I just didn’t apply for them and did not have good credit. I have no # and nothing to reference. Makes me wonder if I was an identity theft victim or my wife somehow did this behind my back… or it was something left over from even longer ago, it just seems odd as I’ve never had one if their cards in my wallet, but our finances were in such shambles at the time it seemed plausible we had something out there. Can the CC companies provide you documentation about what you had charged on an old card like that?
Bill – In general, yes, the longer a judgment goes without any type of collection or payment, the more likely you are to settle favorably. Unfortunately that just is not always the case with Capital One.
You can call Capital One if you like, but unless there is something odd about your account, like the attorney they used to sue you is no longer part of their network and they have not assigned it anywhere, you should expect them to refer you to an attorney in order to settle.
Getting the judgment to show satisfied is going to require the court record being updated. You should place that responsibility on them to update the courts record that the judgment has been resolved and satisfied. The data farmers that scan the court records and send the info to the credit reporting agencies will then pick that up and the CRA’s will get updated. You can also get the record updated with your own motion, and your credit reports updated through your own efforts after that, if you are in a pinch for time to close on a home or something like that.
Thanks much for appreciating the site and the efforts we put in to it in your comment. That feedback means folks are finding all of this useful, which is why we do it.
As far as how to go back and recreate this account, its history and use, this long after a judgment entry, start with any older copies of your credit reports, cross reference information contained in the original lawsuit in the court record. I do think it is possible that the credit card company would have the account information, but in this scenario I cannot see a reason they would have for digging it up unless forced to in litigation or in response to a regulators request.