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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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.
A friend works with defaulted student loans. He said that they are not permitted to garnish someone unless they have been employed for over 1 year, and figured it would be similar for other garnishments.
If I am garnished, will I get a letter warning me before the garnishment takes place?
Student loan collections operate a bit differently, and even then I think something was lost in translation.
You can get notice of a garnishment, and it is often going to come from your job. That notice will often provide you information about the steps you can take to contest the garnishment. And if you meet certain requirements, you can be determined partially,or even fully exempt from garnishment.
New York protects you from judgment creditors in the following way:
90% of your wages that you were paid in the last two months, or 30x minimum wage.
NY protects up to 4 thousand dollars value in a vehicle.
Between 75k and 150k of your home value is protected – The amount varies by which county in NY the home is in.
All major household items are protected from judgment creditors (stove, fridge, more).
New york has good state laws protecting money in your bank account. 240 times minimum wage in your account is protected with an additional 1k possible if homestead exemption is unused.
I have a credit card judgment against me that was just filed a few months ago. I have been unemployed until only a month ago.
Can they garnish my wages? Or don’t they have to wait a period (a year, I heard) before they can garnish me? I was unemployed for 8 months. My understanding was that I had to be employed for over 1 year in order for them to garnish me. I’m in NY.
I am not aware of any provision in New York that prevents judgment creditors from garnishing you for a year. Where did you hear that from?
Hello Michael,
My second wife of 11 years and I are attempting to refinance pour home. Currently, the title of the home is in her name only. I kept my name off because of a credit card judgment starting in 2006 from a credit card my ex wife and I jointly had in 2000.
Our loan officer has told me nothing can be done because of my judgment showed up on the title search he did. The judgment does not show up on my credit report anymore.
Anyway, we live in Missouri and the officer says we could try financing the home in my wife’s name only (again) but he also stated that the judgment lien will still be in effect on the title, even though it’s MY judgment and I will not be listed on the title. Is that correct?
Thank you for your response.
Bill – That type of scenario can and does play out often.
How much is the judgment and who is the plaintiff?
Hi Michael, I need some advice. I had a debt in 2007 that I wasn’t aware of, could have been a personal loan my ex took out but it’s all in my name. I’ve recently received a letter from the attorney KLW office about a judgment and that they are preparing to garnish my wages. They provided a Docket Number court filing number for Los Angeles County, I looked it up and saw that the judgment was originally filed in 2008. The status is now “Disposed by Judement,” what does that mean? I have never been properly served but does it really matter? Would it be better for me to just negotiate on a discount and make payments (I think it’s about $20K now, amount wasn’t listed)? The letter does say that I may qualify for a substantial discount off my balance, but I am wondering if it’s just a gimmick to get me to call cause they haven’t been able to find me in several years. This letter was sent to my PO Box, no bank accounts or phones under my name. Please let me know, I really appreciate your expert advice. Thank you.
With judgment debt, it is not all that common to negotiate a discounted pay off amount, and get that spread out with affordable monthly payments. Settling judgments for the best savings is best done with a lump sum payment.
How much money can you pull together over the course of the next month or two?
Never having been served can matter. But post what you can raise to settle first.
Thanks so much for your quick reply. I noticed that they have the wrong employer’s name for garnishing wages, I assume it’s only a matter of time before they will find the correct one. I’m getting an end of year bonus in Nov for about $5-8K which I can pay. How does not having been served matter?
Continue to save up, and add what you can to the money you have coming end of year. If you do settle, you may need to be prepared to pay half-ish.
Your not being served is a problem that should not be ignored. There is an attorney in your area I know who has had good success getting judgments vacated, when there are discrepancies with the process, and even when the judgments are more than a year old. You can likely have an initial consult at no cost, so the price to learn more about it (vacating basically means undoing what happened in court) is right. Let me know if you want his info.
Yes, please give me the information. I was reading through the court case summary and it looks like in 2008, they did sub-serve John Doe who was noted as co-resident. At that time I was separated from my ex but was not legally separated and was not living with him. I may have also been working out of state for a few months during that time too. Does serving my legally still married spouse at the time make it legal that they served me? I have never received nor my ex notify me of such letter.
How those circumstances will possibly play into any legal strategy to manage the situation can be discussed with the attorney I sent you info to contact.
Please post any updates with your progress.
Thank you so much for the information, I will give Adam a call. Will keep you posted as well.
Hi Michael,
I wanted to update you, I had a Motion to Vacate filed and the court date was last week but it was set up via phone and my lawyers did not come in. The judge denied my motion without prejudice. I don’t know what is next other than my lawyers telling me if they garnish my wages to let them know. I am also having a hard time getting a hold of my lawyers ever since, they charged me $1600 for this case and I feel like there is a lack of service they are providing me. I am wanting to appeal the denial but my lawyers are not wanting to return my calls nor have the answers to my questions, they keep telling me they need to talk to their boss and I get the boss on the phone and he would say he needs to talk to his partner cause his partner knows this case better; yet, nobody is calling me back unless I keep calling. I feel like they took my money and hoped that it was an easy case and then would not followup with their client. This is getting really frustrating.
Telephonic hearings are common.
Getting a 7 year old judgment vacated is not an easy case.
Appealing has its costs too. You would want to weigh that. When is the deadline to file your notice of appeal?
Thanks for replying Michael, the lawyers have not told me when the deadline is to file an appeal, if I do not file, what is the next step? Am I to wait for the other side to pursue judgement and wait for a court order to pay what I owe?
If you are not going to file an appeal, I would look at what you are going to need to settle the balance at a discount. If not settling, payment options can be established.
Those next steps are provided you are able and willing to resolve the debt. If you are not collectable (cannot lien, garnish, or levy a bank account), I would not jump through hoops to find a payment solution until you have legitimate concerns in that regard.
Thanks Michael for your knowledge.
Hello:)
My wife has a judgment on her in CA for $36k on 2008. It’s from a credit card debt from 2004(AT&T Universal MasterCard. She was never served and we only found out a couple of years ago because we tried to purchase a house. The original debt was $12k then awarded judgment was for $18k then a couple of years ago when found out about it it was up to $23k. We tried to negotiate a settlement at that time but they were basically just laughing at me. I even offered up to the original debt amount settle it but they didn’t care. We didn’t get approved for the house and gave up altogether. And just this past Monday the 8th, we received a letter from her payroll dept that her wages are being garnished 25 percent this Friday the 12th with the judgment now at the $36k.
My wife is a registered nurse and right now I’m a stay at home dad for the past 5 years. What else can we do about this? We are filing for an exemption tomorrow morning.
Any help would be much appreciated. Thank you!
Call the attorney in California (you are in CA right?), and talk to him about your situation. He has had some success in California with getting judgments set aside when there was sewer service and the like. Even when this happened more than a year ago. Post an update with any progress you make in that regard.
Get the hearing to contest the garnishment. With one income at the level I assume, and a family to feed, with a high cost of living in CA, I hope you find you are fully exempt.
Michael, thank you so much for the quick response. And yes we are in CA so I will definitely be calling Adam. Based on the info you shared I can already tell that he knows where to begin. I must have spoken to over a dozen consumer credit lawyers the past couple days and none of them seem to have a plan of attack. As far as the exemption, we should be done with filing it at court today.
Thanks once again! I will keep you posted on the outcome.
I had a call today saying i have to go to court next week for an unpaid credit card i found out which one it was and paid off. Those that mean i still have to go to court even if i paid it off.
Calls out of the blue telling you about a court date next week if you do not pay right now tend to be made by debt collection scams. What is the name of the collection outfit you paid? What was the debt for originally? Does the collector appear on your credit reports? Does the original creditor still appear on your credit?
Call your local court and ask if there was even a case filed against you in your name.
I would want to quickly try to figure out what happened here, and if need be, call your bank and stop, or reverse any charges, as may be possible for you to do.
An attorney is currently seeking my husband to serve him papers but 2 days ago my hubby received a notice from a debt collector saying they would settle for $564 out of $1881. If my hubby pays the settlement amount in full to the collector, can the lawyer still serve him papers and require even more money?
Also this debt is from before we were married. We have each have a separate bank account as well as a joint account at a different bank that has our savings (basically just $3,000 from income tax refund, most of which is mine.) Can they go after that money? Can I remove him from the account? ShouldI take that money out and put it into my separate account? How can i avoid losing that money?
Who is the debt collector attorney? Who is the collection agency that sent the settlement offer in the collection notice? Knowing the answer to those may alter my feedback about settling.
You can protect the money in the bank account by moving it to the account that only you are on. You do not have to worry about that unless there is a judgment, which you can likely avoid.
Everyone this man has contacted has asked what his name was or from where he was calling from and in regards to what and he wouldnt give ANY info. Just threatened that he would show up at the front door with papers that needed to be served. The weird thing is, he has called all of these people EXCEPT my husband. And we have no idea where he got the cell phone numbers and addresses from. Especially my mothers number and address since he never lived there. When we Googled the number he left, it came back with complaints that it may be a scam so my husband is reluctant to call the man back. Should we just wait for this dude to hunt him down and serve him papers?
The debt collection letter my husband received on Tuesday was from Northland Group, Inc. We googled that name and PO address and it came back on BBB’s site with an A+ rating. However, when he went to the website it listed to pay the settlement, it asked for a number on the letter and a password (his last 4 social), it error-ed out and said “Invalid Account”. So now he’s really confused and doesn’t know who to trust.
How do we find out who exactly owns the debt now so he can settle on an amount and pay it back? He knows he owes money. He made charges for a trip years ago while he had a good paying job, and shortly after that trip, he lost his job and was unemployed for a few years. He just recently got hired full-time and is trying to get himself back on his feet, moving out of grandma’s house, getting health insurance, and just recently paid off his car, and this debt was next on his list. He just doesnt know where to start.
I had a levy put against my checking account in CT. I have since made arrangement with the company and they accepted monthly payments to be made by me. I had another judgment on me but they never went into my account. I called them and also made monthly payment arrangements with them. Will they still try to take money out of my account even if they accepted my arrangements? I’m not going to keep money in the account as I asked my employer to stop direct deposit and give me a live check. Can a creditor put a levy or a judgment against a prepaid debit visa card? I may want to put my money on that when I have to pay bills.
You should be safe with the prepaid visa.
When you made the payment arrangements, did you get the details outlined in writing?
My default position on these things is to take every precaution available to you when all that you and they agreed to is not in a written agreement.
I recently received notification that I was being garnished through my new employer for a Capital One CC $1,100.00 the judgment was issued in 2012 my son signed and never told me so I missed my court date. The garnishment payout through my employer is a negative amount (state I live in, I make too little for them to take out and pay towards the garnishment) It’s a very part time job.
I plan on calling them to see if they will set up a payment plan with me directly do I get anything in writing ie; payment plan? Can’t
the company who place the garnishment cancel or retract it?
Thanks for any advice.
In order to get a debt collector to work with you on something this far advanced in the collection process, you may be better off showing the court you are fuly or partially exempt from garnishment first. The affordable payment plan you need would be more likely.
Did the garnishment notification you received have instructions with it for how to request a hearing to contest? If not, call the court clerk and ask for the steps you need to follow to set that hearing up.
Michael,
I have a quick question. I was recently sued by a collections attorney for an HSBC credit card. I knew I was being sued and before receiving my court papers I called the attorneys office and settled the debt, 2 days ago. I just met with the court server today to get my papers. The attorneys office said they would dismiss the case once the check clears. The court papers say I have 14 days to respond. Since I’ve already settled should I respond to the court or will it be taken care of by the attorneys office?
Thanks you.
Have the funds cleared your account? What is the name of the law firm suing, and who is the named plaintiff if not HSBC?
They have cleared as of this morning. The firm is Couch Conville and Blitt representing NCEP LLC.
They should follow through on their end then. Check the court record to be sure that they do. Post a follow up if they have not within a couple weeks.
Hello Michael, I’ve read almost every comment on this thread and pretty sure I already know the answer.
Original Creditor – Providian National Bank 2004/2005 (I think it was sold to Hobe Financial)
Judgment granted Oct 2008
Garnishment granted July 17, 2014
Law Firm in Atlanta, Ga. sent me a letter June 20, 2014 stating the I owed a debt to Hobe Financial in the amount of $15,353.35 and a bunch of law term language in the letter. Nothing about the judgment but I had 30 days to contact them. Garnishment was granted on July 17, 2014. They didn’t give me the full 30 days to respond. This past week I received notification from my employer that a wage garnishment would start on the next paycheck. The deduction has not started yet, as I get paid towards the end of the month. I’ve contacted the law firm today and left 2 messages seeing if they would accept a pay-off before the garnishment starts. This would put an extreme hardship on me if they are able to get the amount calculated each month. I was going to offer $10,000 what’s your opinion or am I pretty much stuck and probably have to file bankruptcy. I bought a house and new car 2 years ago.
Who is the law firm?
You may not be stuck with the full garnishment if you can show where that amount would create a hardship based on your income and expenses. If you do that, and get the garnishment reduced, they will be much more open to a settlement. If you are not able to show how the amount is too much for your family to handle, it is not likely they will be open to reducing the amount owed and settling.
Have you talked about your situation with an experienced bankruptcy attorney? Are you able to qualify for chapter 7 where this and other debts can be completely wiped out? What prevented you from filing before now, if anything?
It’s McCullough Payne & Haan, LLC in Atlanta, Ga. I offered them $8000 Friday and called me back today only willing to settle for $12.000. I qualify for Chapter 7 but would have to sell my stock.
How much is the stock valued at? That will calculate into your decision making.
What other unsecured debts (on time or in collections) are there?
Are you considering requesting a hearing to contest the garnishment amount, or are you fairly certain you would not qualify?
It’s valued at over $16,000. I don’t have any other debts except my car payment and mortgage and utilities and other normal lifestyle bills as a homeowner. I have not considered the garnishment amount, don’t know the steps to take. I’ve left them a message to call me back and was going to counter their offer and say $10,000. I was told by bankruptcy attorney I could convert my stock into my 401K but my company plan administrator said it doesn’t work that way and would have to sell the stock and then move to the 401k. Still being taxed with a 1099 next year for the capital gain/loss. If I do that then I would qualify for Chapter 7. Just so confused and undecided. I know my payroll dept has already processed the first installment on the garnishment to come out of my check next week but was told by the attorney I would get that back once we settle. They also offered me payment arrangements, however would mean that I would still be liable for the whole amount of over $15,000 and quite sure they would only accept a min of $500- $600 per month. So that really doesn’t help out a whole lot. Advise? Opinion?
If you think you have no shot at getting the garnishment reduced or eliminated based on your income and expenses, the counter offer would be something to pursue. Add up all of your bills, and I mean every way you spend money in a month. Subtract that from your income, what do you have left?
If you can get the court to protect you from all, or part of the garnishment, judgment creditors, and especially ones who are already showing they will negotiate a pay off with you, will often settle for a better savings to you. Talk to your courts clerk about how to get a hearing to contest the garnishment.
I have 2 judgments issued in Colorado by collection agencies that buy debt. This debt has most likely been sold multiple times for pennies on a dollar. I now live in Texas which is a commonwealth state, so they could pursue my wifes property and bank accounts.
My question is, Will the judgment from Colorado be legal here in Texas or will they have to file for a new judgment?
They can file as a foreign judgment creditor in Texas without suing you again. Once they do, the judgment is valid for 10 years, and can be renewed for another 10 years.
Who is the debt buyer? What are the balances (round to the nearest)? You can settle judgment debts for less than what is owed.
Capital Alliance Financial f0r $ 7,400, Atlantic Credit & Finance Inc, $ 14,400. the latter took 1,400 from my bank account. Yes I know I can settle for less, but when they see my zip code they will go after my wife, to make things more complicated, my father in law has insisted that he will hire a lawyer to deal with this, but so for 2 have turned him down
What is it your father in law intends to do? Is he looking to have an attorney negotiate lower pay offs, try to get the judgments set aside or vacated, other?
Post the name of a nearby city in Texas. I will email you contact information to both Texas and Colorado attorneys that you or your father in law can consult with. These would be experienced collection defense attorneys who can help with all of the above.
Yes we are trying to hire a lawyer to negotiate lower terms, I’m not sure they had the legal docs to sue me but since I did not answer the papers filed they won the judgment. Interesting note, my pay check was just garnished in Texas this week, that should not happen, but I think I know why, I work for a large Corp. and my address had not been changed in my transfer from CO to TX! we found a local lawyer that has that seems to have the right background, I did find 4 lawyers in the Houston area from you web site, but he does not want to go to Houston, we will ho this turns out.
You can generally work with an attorney without the need to travel to their offices. Though I relate to wanting to look a person in the eye when hiring them.
I sent you an email with contact details to some experienced consumer law attorneys in both Houston, and in Colorado. All likely offer a no cost initial consult.
Please do post an update with how you progress.
Hi Michael,
I had an American Express card go delinquent in 02/2005. Went into collection in 10/2006. The original credit limit was 2k. When it went to collections with over the limit fees and late charges the balance was $2,901.00. The collection agency Asset Acceptance won a default judgement against me in 4/08/2010 for $4,852.51. I want to resolve but for way less. No adverse action has ever been taken against me. I would like to settle for 2k or less. What do you think?
Rob – How collectable do you look on paper? Are you paying other bills on time that show on your credit reports (credit cards, auto loan, home)? Are there other collection accounts showing still?
What you can settle for is often impacted by whether what you are offering is within the parameter of what the debt collector regularly accepts given what they score you at for being collectable. Judgement debts are more nuanced.
Is the 2k all you have, or can access? While it is possible to negotiate a settlement that low, because it is a judgment, if you are not able to lock in the deal, I get concerned about waking them up to a sleepy account that someone cares about (you), and whether they can collect now through bank levy or garnishment. Can you get your hands on some additional money if necessary? What state are you in?
Michael,
I acquired the debt while living in Las Vegas. The Judgement took place while I lived in Chicago. I now live in Iowa. I do have about 3-4 accounts in bad standing on my report. Everything else is okay and current. I currently don’t own a home but rent. I wanted to make an offer of 25% and would go as high as 45%. From various things I have read this seems to be a fair range. If necessary I could get some more cash but it would take more time.
I would go for it then. 25% is more consistent of a starting place for debt negotiations when there is no judgment or court action. And with other bills showing as current on your credit reports, it is even less likely you would settle on an amount that low. Why not just start that low and go up in increments? Too many offer and counter offer moves in negotiations can be counterproductive in situations where they have “or else” options. But on the other hand, they would need to probably need to go through extra expense and time of getting a foreign judgment recognized in Iowa before they could roll with any of their “or else” options like wage garnishment, bank levy, etc.
Thank you.
Hello,
Looking for some sort of advice. I am currently being sued by a debt collector here in GA for $1360. This is an old card from at least 4 years ago, and they are just now coming after me…I have been served obviously, and they have asked for the case to be transferred into the court in my county, instead of the original. I sent a response to the law office, requesting debt validation that has so far gone unresponded.
I plan on going to court, Pro Se. I am just so nervous that they are going to win #1, and garnish my wages. My husband and I share a bank acct currently, but it is under his name primary, and my MARRIED name secondary. The lawyers are suing under my maiden name. Before they get a judgement, should I take my name off the acct and switch from direct deposit to paper checks again? Just in case?
Any tips to win in court? Will they garnish if I settle with them??
Requesting debt validation if you have already been sued does not serve the same purpose as it would if you had not been sued. You can still get all of that information from a debt collector that you would want out of you validation request, and in fact, you can get much more information from the collectors. But you have to do that through the formal discovery process with the court.
I recommend you contact an attorney in Georgia who regularly defends against debt collectors. Most of this attorney type will offer a no cost initial consult. If you post the name of a nearby city, I will email you contact info I have for any in the area.
If you settle the debt, there would be no reason to garnish.
There is no need to remove your name from bank accounts unless they get the judgment. If this does become a judgment, I would not have my name on any bank accounts.
Thanks for your reply. I am located in west GA, near Dallas/ acworth. I appreciate you help… Would a request for production filed with the court asking for all the information on the acct ( basically trying to show that I don’t owe THEM, just citibank) make any difference? Also I have been informed that since they mistakenly filed the suit in Cobb and had to have it transferred out to Polk where I live that they’ve already violated some portion of the FDCPRA, since the burden is on the law firm to file in the correct place, and I may be able to have the case dismissed with prejudice?
I sent an email with contact details to a couple of attorneys in the area with the experience you need. Both will likely offer a no cost initial consult.
Hi Michael,
Last week I was summoned with an Arbitration Notice to Appear in court for a judgement to be filed against me for a back bill; I’m being sued by Portfolio Recovery. I’ve already consulted a lawyer, but still waiting for answers and advice; I feel like I need to tackle this issue now opposed to waiting until the last minute. I’m in a situation to make payment arrangements; and in the past I’ve cleaned my report myself with debt validations, and delete to pay letters. Right now, I just need a little guidance.
First, I know I need to respond with an “Answer”, but how do I go about doing this? I have to do it within the 20 days, leaving me only about 13 days. Should I submit a debt validation letter to Portfolio Recovery, and would this be considered as my answer; or should I be dealing directly with the law firm who originated the summons? I feel like I can fight this, not sure how to go about doing it, but the being “served”, along with a bunch of letters I’ve been receiving in the mail from lawyers announcing that I’m being sued has me feeling ugh.
Theresa
I would encourage you to work with an experienced debt collection defense attorney. I am not sure if the attorney you spoke to has that as part of there regular practice, but very few do. What is the name of a nearby larger city?
You can set up payment arrangements to be sure, but PRA will likely want you to consent or stipulate to a judgment in accepting long term payment arrangements (try to avoid this if you can, but not always avoidable). You can settle for a lesser amount paid in a single lump sum. How much is the suit for? How much can you raise to settle?
Hi Michael,
I’m near the Philadelphia, PA area. The amount is only for $960. The attorney’s officed called me back today, and yes he’s a debt collection defense attorney. I’m still feeling very ugh about this. I felt comfortable talking to the attorney, however, I felt my questions still were not answered. I feel I should just call PR, and pay it off. But my main concern is will they still be allowed to file a judgement against me. I was hoping a pay for delete would settle this and it would end. But I’m beginning to feel like this is going to be a never ending issue, don’t know why, but I’m not getting good vibes with this. I guess not a simple as I thought it would be.
Theresa
I am not sure what expectations you had with a pay for delete, or where you got the idea about it, but that is just not likely with this type of scenario. Maybe if you defended and won, or had cross claims….
You can pay and get this dropped though. Do you have the money you need to do that in one single amount? If not, can you raise that? How long would it take?
I just received a letter from Midland Credit Management, Inc. saying that they have made several attempts to contact me regarding the account. And that they are considering forwarding this account to an attorney in my state for possible litigation. I have from now until Aug 17, 2014 to pay them $500 and call to set up my remaining payments, or call to see how to qualify for discounts and affordable payment plans.
The amount I owe now is $3,379. Original creditor is Chase Bank USA, N.A. I don’t even remember owing them money. I know that my father used to use my name to open up credit cards accounts in the past and use them, but he has passed away last year.
I also have other debts and loans that I haven’t been able to pay off. So am I at risk for being sued here? What should I do?
Midland does sue for collection frequently, so yes, you have a higher risk of being sued for this account.
You need to get to the bottom of whether you ever had this account, or your deceased father opened it and used it. You could file a police report for identity theft if you never opened this account.
Post an update with what you learn and lets go from there.
Hello Michael,
Thank you for responding. I’m not sure how to go about and find out if it was my father who opened the account or not. The original date was all the way back in 2006 when it was first opened with Chase Bank.
I just called Midland and told them the story, and they asked me if I want to do a dispute. I’m not exactly sure where this would lead me, but I told him no and that I’ll call them back later. The lowest pay in full he offered was about $2700. And if I were to do a monthly payment, it would be $101.
Should I just go with the monthly payment or should I consolidate all my debts and go from there? If I were to go to the police and report identity theft, how can I prove that it wasn’t me who didn’t open the account? Thanks.
It’s probably not a good idea, I just decided to settle the debt with 1 payment of $2203. They give me til the end of the month to do so. I’m just going to try and borrow friends’ money or something. Thanks!
In the same way it would be difficult for you to prove this was ID theft, the burden will be for them to prove that it was not. But that would likely come to a head if you were sued for the debt.
I would target settlement with them at roughly 50%. But before you go there, what other debts do you have? List the balances owed, when last paid, and who is collecting on them now. I can offer some perspective.
I also have other debts:
1. $1713, from Midland Funding LLC again, originally from HSBC bank, last paid in Oct 2013.
2. $552, from Portfolio Recovery, originally from Chase Bank, last paid in Oct 2012.
3. $3,690.61, from Resurgent Capital Services, don’t know where it’s originally from, last paid I think in April, 2011.
To be honest, I don’t remember buying anything that led me to so much debts at all. I did have a Chase account back in the day, but never bought anything that lead me to so much debt. I’m an Asian, and in our culture we tend to live together as a family, so I live with my parents, sister and brother still.
I believe my deceased father used everyone names in the family to open up bank accounts back then (he might have had us sign them back then without us reading what we signed because we trust him, but I seriously don’t remember).
The only debt I know I have that belong to me is federal student loans.
If I were to file identity theft to the police… I’m not sure how it will help me. If they were to look at the transactions, they would probably have our same address because I live with my family. And as for the signature, I’m not even sure or remember if I did sign them contracts or not.
For the debt that I mentioned in the original post, I was able to haggle them down to only $2203. They wouldn’t go any lower. Any tips on how to get them to lower to %50 like you mentioned?
Thanks,
Peter Pham
Negotiating settlements does not have to start and end in one phone call. I would have tried to wear them down over the period of several weeks (unless negotiating something time sensitive like when a lawsuit has already gotten under way. You also should focus on hardships. Try never to sound or say something optimistic about your income, or ability to get money. Everything should sound like an extra 100 dollars might as well be a thousand.
I asked about the other debts in the event what you shared made chapter 7 bankruptcy appear to be a better option for a fresh start, wiping out all of the debts. If you are working, and believe your job and income to be secure, you are more likely to be able to navigate all of the collections,rather than file chapter 7 over a relatively small amount. People regularly settle with all of those debt collectors for 50% or less.
Hello Michael,
I haven’t been able to respond because I was trying to call MCM to get a lower settlement. Unfortunately, the person who handles my account hasn’t been in work or something, they keep saying he’ll work tomorrow and to call back.
I tried to ask someone other than that person to lower the settlement, but they said that’s the best deal I will get and that I’m not even suppose to get that low of a deal. I have no idea how to get it to 50% or even lower.
I thought about filing for bankruptcy like you said, but a few friends of mine recommended me to not to as it will jeopardize me in career wise (I do not mind the 10 years negative remark on my credit report). Friends said employers might refuse to hire me because of bad credit (it shows I cannot handle my life).
Hello again,
So I was able to reach the person who is handling my case today. I explained to him my situation that I’m still in school, no stable job (I’m on call and barely get called in for work), living at home with parent, on medicare and food stamp, has gastritis/ulcer due to stress (gone to endoscopy a few weeks back). He was able to lower the payment to $2000 by the end of this month.
I found that the stuff that he was telling me weren’t true or accurate. For example, when he gave me the deal of $2203 deal he told my to wait so he can ask his manager. However, today he told me that if his manager finds out he gave me that previous deal, he would be in trouble. And how he would be more in trouble because he had lower it down to $2000. So as you can see his statements aren’t the same.
Try not to get hung up on a debt collectors verbal representations. You want a deal you can afford, and you want it documented and reviewed for accuracy before paying anything on the deal.
As for employment and a bankruptcy in the public records, what industry do you work in, and what role do you fulfill in that space?
I graduated with an associates degree in nursing and just got my registered nursing license in April 2014. I’ve been applying all over california for new graduates position, but haven’t had any luck. The problem with nursing is that they are transitioning to hiring only bachelor nurses. They’re no longer interested in associates (I got this confirmed from friends who know managers in the field).
I even apply to out of the state and still no luck. The only place who hired me was a skilled nursing facility, but they hired me as an on call nurse. They barely call me in; like 2 times a month. So right now I’m trying to go back to school (online program) to get a bachelor. The cost is expensive, so i have to borrow a friend for money (it’s about $350 a unit). I would have to take at least 6 units every 7 weeks in order to finish it by next June 2015 (it’s kind of accelerated). It’s a bit complicated with nursing compare to other fields… My status as a new grad will expire within 18 months starting from the day I got the license. If I go over the 18 months without working, I’ll never be able to get a registered nursing job. And as for the non new grad positions, you would need 1 or more year of experience in order to apply.
It was manageable until I found out about all the debts that I owe and the pre-legal letter from mcm.
Michael,
I live in New Jersey and back in 2007 I ran in to some financial troubles, I lost my job and left my daughters father. I had 3 credit cards that ended up going unpaid because I had no funds and he refused to help even though it was mainly his debt. These 3 credit card debts ended up becoming judgments against me. (I was young and had a new born baby, moved and didn’t know what to do at the time) Now, many years later, I have been working on repairing my credit and hope to buy a house for myself and my daughter.
My credit score is better but I have these 3 judgments and they total between $10,000-$11,000. Is it possible to make settlement agreements when a debt is already a judgment? I have some savings (not enough to pay these all off in full) but was hoping I might be able to make settlements and have these judgments removed from my credit reports. Also, I have my credit report that lists the 3 different “plantiffs” but how would I know if I talk to them of if they have an attorney that they used that I would have to speak with?
Thank you in advance. I truly appreciate any help/advice you can provide.
Sarah
You can settle debts that are now judgments. It is realistic to be prepared to pay half of the balance owed as of today. You can sometimes negotiate a better deal, and there are times where 80% might be as good as it gets.
How long ago were the judgments entered in the court?
Assume you could settle for half, how long would it take to pull together the money to pay them?
The judgments were entered in 2008 & 2009. I have about $5,000 saved up so I’m going to use that to try to make settlements on these. Obviously I would like to settle for the least amount possible…. What do you think are good starting points?
These are my judgments:
$3,976 LVNV Funding LLC Entered 5/09
$3,485 Atlantic Credit and Fi Entered 3/08
$3,150 Asset Acceptance Entered 6/09
Thank you!
Michael,
The judgments were entered in 2008 & 2009. I have about $5,000 saved up so I’m going to use that to try to make settlements on these. Obviously I would like to settle for the least amount possible…. What do you think are good starting points? What is the best way to approach these?
These are my judgments:
$3,976 LVNV Funding LLC Entered 5/09
$3,485 Atlantic Credit and Fi Entered 3/08
$3,150 Asset Acceptance Entered 6/09
Thank you!
I would aim at settling for about half. You can start a little lower, but be prepared to end up higher on some or all.
Just know that part of approving settlements there is often going to be a collectability algorithm run on you. How collectable you look could be the shape your credit reports are in (paying other debts on time), all the way to the average income in your zip code. The more collectable you look, the more you will want to emphasize what has made it, and continues to make it, hard to be you financially.
I would not reference that you are disciplined enough to save up 5k. I would instead say something like “It is all I can do to pull together this amount of money as a single mother”. We are still talking about the same amount of money, but we changed the perspective of the person on the other side, and are giving them a reason to settle for better savings.
The real risk is that you show willingness to pay when you start the negotiations, and they start looking for what they can levy from a bank account, or garnish from a pay check. New Jersey is not a consumer friendly place for debt collections.
Michael,
I appreciate the feedback.
So by trying to possibly make settlement agreements with these 3 judgments I could be opening up another can of worms with wage garnishments and back levies? Would working with a lawyer or specialist help me in any way?
I am disappointed but not surprise that you mention the negative about New Jersey….living here seems to make everything more difficult.
Also…Do I try to contact the companies that are listed on the judgments to find out if I negotiate with them or if there are lawyers involved? I wasn’t sure of the best first step.
Thank you again,
Sarah
I do not mean to scare you off of tackling the debts, but it is always best to go at something like this fully informed and prepared.
Even if one of the judgment creditors went at a garnishment, you can only be garnished for one debt at a time, and maybe not fully (as you may meet full or partial exemptions). You use that to negotiate with the other two.
But the main thing I see people lose focus of with your type of situation is that this all needs to get done quickly. That could mean taking a 60 or 70 percent deal on one, getting a lower deal on another, and finishing off the third. It may also mean you only have enough money to settle two, and have to circle back to the third, or other varied outcomes.
You can do all of this, or you can work with a pro. It would be better to talk about all of this with an experienced consumer law attorney. Post the name of a nearby larger city and I will email you contact details to any attorneys in the area I know work with collections. Be upfront about your budget and goals when you talk with them. Hit on the concerns I have touched on here, and any others you think of.
If you do this DIY, talk with the judgment creditors first and see if you can work direct with them bypassing any attorney. It is possible to do after this long. If they have a contract with a collection attorney they will tell you who to contact to get this negotiated.
Michael,
Thank you for this information and I do appreciate you being up front about the situations that are possible.
I live in New Jersey and the cities close by would be Cherry Hill, Moorestown, Marlton. The biggest city close by is Philadelphia but I prefer something in state if you know of any.
Again, thank you so much!
Sarah
I found one in Marlton NJ and sent you that via email. Post an update with how you progress.
Hi I just got sued by midland funding for $3,421. I was working so agreed to pay them $35 a week shortly after I lost my job and was unable to make any payments they went in my bank account and garnished $356 from checking I want to fix my credit and just recently started working it is an old debt originally from 2007 from Bank of America but got sold in 2012 will the statue of limitations start again, by the way I’m in Connecticut.
If Midland Funding has a judgment, the SOL to sue you is not important, but the SOL to collect on the judgment, with all of the extra ordinary ways they can do that, like garnishing/levying your bank account, does apply. And in some states that can be as many as 20 years or more.
The SOL for this debt to appear on your credit report is a two part answer. The date BofA considers you to have missed your first payment, or to be 30 days late, means you can count forward 7.5 years for the BofA and Midland Funding collections reporting to drop from your credit. But any judgment in the court record gets a new set of 7 years to report starting from the date the judgment was entered in the court.
When did you first miss a payment to BofA?
What is the date the judgment went into the court record?
Hi,
Thank you for your response. First missed payment was on Aug 2008 for BOA and the judgement with midland funding was in Feb 2014 they garnished funds from my checking in July 2014.
Am I able to talk to them and maybe settle for half the money or is it too late.
It is not too late to settle with Midland Funding. With a judgment, they are more likely to hold out for a higher amount. But 50% is doable. How long will it take you to pull that amount together?
I can save it before the end of this year I just don’t wanna call them now because im afraid they are gonna start bothering me all over again. Also I looked at my credit report in equifax and it states this account will be closed on Nov 2014 is this accurate, and in credit karma it shows last acct report by midland is July 2014 that’s when they when in the acct but did not subtracted what was taken from my checking.
Just know that the sooner you act, the sooner you will remove any risk that they will levy your bank account again, or garnish your paycheck.
I am not sure what you are referring to on your credit reports about subtracting money they already took, but any judgment showing on your credit report is the result of the public records in the court. Payments are not updated to the court record. Typically the court record will be updated when the judgment is satisfied (which includes negotiating a lower pay off settlement), and not before. The paid judgement will always be part of the public record, but is limited to staying on your credit report for 7 years from the entry of judgment.
See this post for more on judgments on credit reports: https://consumerrecoverynetwork.com/question/judgment-collection-removed-from-credit-report-public-record/
Any other collections from Midland Funding showing on your credit report should age off at the same time the BofA entry does. See this report for collections falling off credit reports: https://consumerrecoverynetwork.com/question/collection-accounts-age-off-credit-reports/
The judgement is not showing in my credit report all it says is acc was last updated in July 2014 I want to buy a house within the next two years will this affect my chances my credit score is 620 right now and I’m planning on getting a secured credit card to higher my credit score
Thank you so much for your help….
Anna
If your collections are paid (even a judgment if that shows up later); you have a debt to income ratio that meets the new ability to repay rules; any required down payment; and a 620 credit score or higher; you have a good shot at qualifying for FHA loan underwriting.
2 years is a very realistic goal.
The reason I asked about my ex husband is because it stated in the original papers I was served that if they found out his name that they would add him to the lawsuit.
We live in Chandler, AZ. The reason this is causing a problem is because I’m a stay at home mom with 3 kids, my only income is child support which they can’t go after as far as I know because it’s supposed to be for the children. My husband now only makes enough money for us to pay our rent/bills/gas/food etc. I am already putting my debt onto my husband because I have two private student loans that I can not defer or forebear any longer and we are making payments on those which are big payments.
We don’t have the money to pay a lawyer a ton just to get advice or to do anything for us. Or to make huge payments or have my husbands wages garnished, I have absolutely nothing in my name…no bank accounts, cars, houses, credit cards…nothing. I don’t think my husband should be on this lawsuit, as I stated the law they quoted to me doesn’t make sense to me at all. Is there a way you can reword it to me in lamens terms? Any references to lawyers who would be willing to do a free consultation would be great as well. Thank you.
I sent you an email with contact details to two debt defense attorneys. Most of this attorney type will offer a no cost initial consult, and this is someone who can provide you reliable feedback about your question, which is what you need.
Post an update with how you progress.
I am currently receiving information stating that GurstelChargo is coming after me for a debt incurred in 2007-9 something of that nature by Sears Gold Mastercard credit card. I was served papers a few weeks ago stating that they were coming after me for an amount that is in excess of 2k.
It states in the court papers that they did not know if I was married, and if I was that they are applying marital community to the debt, even if we were divorced. I was married at the time but not to the same person I am married now.
BUT it also states that if I wasn’t married or divorced and re-married that my current husband is also liable for the debt according to ARS 25-215(B).
I have always been told that if you incur a debt before marriage that the debt will not become the responsibility of your spouse. This card was cancelled in 2009-2010. I was married in 2012, and didn’t even know my husband when the debt occurred or the card was cancelled. I looked up the numbered law and didn’t understand the wording.
I received 3 letters in the mail today, addressed to me alone, my husband, and then to me and my husband together. All of them stating that they have found out the name of my current husband and that he is being applied to the debt, as well as a bunch of information stating that they found I was not currently in the Armed Forces, but that they do not have enough information to find out if my husband is, which he isn’t but I don’t understand how that matters anyhow.
Can you please give me any information as to what I can do when I call these people to fight them from applying my current husband? I’d be glad to tell them the name of the person I was married to when the debt was incurred because in truth the card was in my name but it was actually my husband at the time that used it, maxed it out, and then didn’t allow me access to funds to make payments on it. Once we divorced, to avoid a major custody battle and have him drag our divorce out horrendously I didn’t include any debts in our divorce. But if these people want to start bugging him about it, he can deal with them. With your knowledge, firstly do you think I could just call these people and tell them my previous husbands name and then they will leave my current husband alone? Do you understand the law that they quoted? How can they go after my current husband for something like this? I’m sorry this is so long, but I am trying to be as thorough as I can. Thank you for your time.
The collector is being careful not to run afoul of the service members relief act. That is the likeliest reason for the military references.
No, I so not think you can give them your prior husbands name, and they will focus on him instead. They have your full attention, and that is what they care about.
I would encourage you to talk over your options with an experienced deb defense attorney in Arizona. They will be most familiar with how to respond to Gurstel Chargo’s community property collection efforts. Post a reply with the name of a close by larger city, and I will email contact info to any experienced attorney I find nearest you.