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.
Need some personalized help?
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.
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?