Hired a debt settlement company and got sued – what now?
I received a summons for 2 of my Wells Fargo accounts. I started with a debt settlement company in February. I am told they are going to try to settle these accounts so we don't have to go to court. I have asked this debt settlement company if i should contact a lawyer and now they will not give me any advice only say to call back in 5 days and they will send me a packet in 10 days.
I was told I have to answer this summons/complaint but they don't have a form. I was told to contact county court and they don't have forms. I don't qualify for legal aid advice since both accounts are 12, 000.00. I do not know where to turn to since I do not have any money for a lawyer and I don't want my wages garnished. I believed this debt settlement company was a better choice than bankruptcy but I still couldn't afford it. I appreciate any response.
What do I do next?
—Michelle
Short answer
Being sued does not end your ability to settle. Filing an answer with general denials preserves your options and buys time, and a consultation with a debt collection defense attorney is generally free and leaves you far better prepared.
Key points on this page
- You still have options to settle after being sued, even where the original intention was to settle earlier
- Which direction you take depends on who owns the debt, who is suing, your cash flow, and how the accounts already in court are best handled
- Wells Fargo does sell debt to debt buyers, and those debt buyers do use the courts to collect
- Filing an answer with general denials at this point preserves your options and buys time to regroup and make informed decisions
- A consultation with an experienced debt collection defense attorney is generally free, and you will be far better prepared afterward
- Avoiding bankruptcy may still be possible, but it will not be as simple as hiring a settlement company and leaving it to them
I have some questions about the debt settlement company you hired and the timing of all that has transpired. You can answer those questions in the comment box below.
Debt Settlement Company Questions
My immediate answers are going to be more of a benefit to later readers of this page who may be considering hiring the typical debt negotiation firm, but will also help me offer you more foundational feedback about what you do next, and how to navigate the lawsuits with Wells Fargo.
- When you hired the settlement company, were you still current with your credit card payments?
- If you were not current, how many months late were you?
- Debt settlement companies generally have you deposit a set amount of money in escrow each month to save up and pay the deals they get. What amount have you been putting in escrow each month? What is the total amount you have in your account now?
- Do you have other debts than these 2 accounts you are being sued on? If so, who with and what are the balances?
- What were your settlements originally estimated to be by the debt settlement rep you spoke with?
- What amount of fees are you supposed to pay for the service? Are any of those fees already paid?
- What is the name of the debt settlement company you hired?
Answering the above questions will help me to give you much more than general feedback. I will also be able to make some comparisons of your remaining options to handle the situation, and the affordability of each path.
Debt Negotiations When You Have Been Sued
You do have options to manage your way through being sued for a debt. I know your intention was to settle earlier, but you still can after being sued. Which direction you go from here will be affected by who owns the debt, who is suing, your cash flow, and the best way to handle the accounts that are in the court.
Wells Fargo does sell debt to debt buyers. Those debt buyers do use the courts to collect. Each debt buyer will handle the deals they are willing to accept when settling accounts before and after suing. Are your Wells Fargo accounts sold? What is the name of the plaintiff on the lawsuit? What is the name of the attorney suing?
Filing an answer with general denials at this point will preserve your options and buy you some time to regroup and make some informed decisions. You mentioned you do not have money to hire an attorney. But you should at least consult with an experienced debt collection defense attorney. The consult is generally free, and you will be far better prepared to make some informed decisions afterward. You may still be able to avoid filing bankruptcy. But it is not going to be as simple as hiring a debt settlement company and leaving it to them at this point.
I can help you locate the type of attorney you will want to speak with in your area. Post the name of a larger city near you along with your answers to my questions. I will email contact information to you.
What you do next is going to be based on comparing your remaining options, the costs, your income, and personal financial goals right now and looking forward 2 years.
Post in the comments below and lets go from there. Anyone dealing with a similar situation is welcome to participate in the comments for feedback.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
I am a poor disabled person on SS and 67 yrs old. I had 2 years ago consolidated my credit card debt with united debt relief company. I now need to pull out. They want more money, but i can’t afford to pay them anymore. They want $660 more. Says for their payment. They said I could pull out anytime.. Can they do anything to me?
What is the name of the debt relief company?
It’s almost a year now that I joined freedom settlement..they settled one of my credit cards and were working on settling with Bank of America..I received a notice from another consolidated attorney on top of the notice it said I was being sued..so I called freedom and they told me I would most probably be getting a summons soon..I’m completely freaked out and thought I was doing the right thing trying to pay everything off and now I’m worried that they will garnish my pay and I’m hardly making ends meet now..I’m not sure what to do and am wondering if I made a mistake going to freedom and if I’m just better off filing bankruptcy
Let’s talk about it.
Which account filed the law suit recently, and for how much?
What creditors do you still have left to settle and what are the balances on those?
What amount are you adding to your escrow account each month?
Hello . I was in here in hopes of useful information my husband and I could use the advice . We are going through the same and have no where to turn . We’d sincerely and greatly appreciate any help. Thanks in advance!!!
If you post the details of your situation I can often offer feedback that will help you navigate your debt collection situation.
I received a court summons regarding my Wells Fargo credit card. Before receiving the summons I enrolled in a debt repayment program and the first payment has gone through. The summons was sent through Zwicker and Associates out of Enfield, CT. The amount I owe is $11K.
I have no idea how to respond to this, this is completely new to me.
What steps do I take regarding this summons? Will they see that I am enrolled in a program to pay this debt off?
What is the debt settlement company you hired doing for you on this account?
When did you stop paying Wells Fargo?
If it were me I would want to defend the suit if I could not raise the money to settle now. That would buy me time.
Wells Fargo probably knows you are in a debt settlement program because the company you hired sent them a limited POA. That actually triggers aggressive collection actions in some situations. Being in the program will not stop collections from rolling forward.
Thank you for the response.
The company is Consumer’s Alliance. I fully intend on paying off the debt and take full responsibility. I guess I just am stuck on how to begin and how to respond to summons. Do I include the debt program I am enrolled in or will that make it worse? Is there any other specific information I should include in my response?
Also, I never received any phone calls from Wells Fargo but I knew I was in debt and was trying to get it paid down, which is why I went the route of the debt program. It wasn’t until after I was enrolled that I received the summons so now I feel completely stuck and terrified of doing something wrong or getting into more legal trouble.
Thank you again.
Talk to Consumer Alliance and find out what they offer to their customers that get sued. I would also talk to an experienced debt collection defense attorney in your state. I can email you a list if you like? What state are you in?
I am in CT, thank you.
Hello! I just got an offer from Debt relief company named ‘Macklock National Credit’ . It seems like they want me to pay them $720.00 monthly for credit monitorning , help repairing credit score, and dispute . I am not sure if this company is trustable and will help me to free my debt… At this point i have 11credit card and 1 personal loan. Total amount of debt is $33000.00. I am making every minimum payment but had 2,3times of late payment. My credit score is 495 .. Having hard time to make payment . Would you please adivse me if I should do settlement debt with this company named Macklock National credit? I could not find them in BBB… Please help me with this!
That is too much to pay for credit monitoring or repair, so the fee must be for disputing, which is typically not resolving debt. Can you describe what it is the company is offering to do when they dispute your debt?
I have a pending judgement that is going to court soon. Is there a way to settle with the company before it goes to court? My debt settlement company didn’t make much progress with them. Could I try to set up a payment plan or something to avoid garnishment or frozen account?
Who is the creditor that sued and what collection law firm are they using?
Yes, you can settle before a judgment is entered, and set up payments to avoid garnishment or bank account levy.
What other accounts are left to settle? Will you be able to stay on track with knocking any remaining accounts down?
I was working with Freedom Debt Relief on settling my debts. I was being sued by one of the creditors and FDR negotiated with the creditor on my behalf. When FDR called to discuss the settlement, they were very vague and told me that I had to quickly authorize the settlement. So I verbally authorized. When I actually read the paperwork, I realized that the only thing FDR did for me was work out a payment plan. The amount I owed wasn’t lower. It was actually higher. At this point, I realized that this was not suitable and declined the offer with a writen letter and felt that bankruptcy was the right choice for me. I never signed any of the documents, but they said I made a verbal agreement and now they will not return the $2800 that I paid into my settlement account. They said I verbally agreed to the
settlement and they are keeping the money for their work. Do I have a chance at getting my money back if I pursue this?
You may be able to escalate your concerns to management, or even outside of the company, in order to get a refund. I have always found Freedom Debt Relief to have reasonable management.
I enrolled in freedom debt relief last September, 2016. I have been late on all my credit cards since September when I enrolled in the program. I am $45000 in debt with credit cards and am
On 44 month program at $550 a month going into escrow. I found out that my discover was sent to an attorney but I have not received a summons. Do you think I should stay in this program or woul bankruptcy be a better option considering my situation?
I have 11 credit cards
If you can do chapter 7 bankruptcy than it is something to consult with an attorney about. If you can only do a chapter 13, it is often better to try settling first.
How much is the Discover card balance? Who are your other debts with and what are the balances?
I am kind of in the same boat as the one who asked a question.
After 3 years of paying a debt solutions company, I am being sued by Bank of America. They told me to stop paying and wait for the credit to go to a third party.
Then I am being sued now. What can i do?
Also, I have not received the summons but I received letters from lawyers that a case was filed. The debt solutions company I had been paying said that they will refund what I had paid for the Bank of America account once the summons is served. It is stressing me out as I am pregnant and about to give birth. Please help.
Also, do you think I should call the lawyer filing the case and try to settle with them instead? I have no idea how to do it though. This is my first time to ever have a case filed against me and it is terryfying. And stressful as I am about to pop and give birth.
I can coach you up to do that, or get you to an experienced collection defense attorney to buy you time (as in many months).
You can fill out the talk to Michael form in the right column Aggie. I will see that and email you in order to set up a time to talk on the phone and go over your situation and best options.
You will get through this.
How much are you being sued for? How much do you have saved up to pay a settlement as of right now? Which debt relief company did you hire?
I haven’t made a payment since about may 2013 discover card is suing me for 14500 it has been in court for 18 months or a little longer the company I hired to take care of my debt was a scam but they did retain a lawyer in my state to take care of the law suit but im afraid I might get a judgment against me for the full amount in the end most of the debt on the card is from fraudulent and or scam businesses charges that I disputed with them and late fees and interest
thank you for your time
vincent
Is your attorney taking up that angle on the fraud charges? Did you file a police report or identity theft affidavit when you learned of the unauthorized charges? Is your attorney preparing for trial? Is there a trial date set?
What state are you in?
I have not heard from the attorney she is not very good and getting back with me haven’t talked to her sine may of last year when I gave her the information I have called her several times and have not heard back from her so im not sure if she is using that angle or not no police report or affidavit was filled these were authorized charges but the businesses was scams and I didn’t get the services and products that I was promised and paid for as far as I know there is no trial date at least I haven’t been notified of one
im in the state of Indiana
thank you
Because you were connected with the attorney through a scam, it might be a good idea to get a second opinion on your situation from another attorney. I can email you a list of attorneys in Indiana with debt collection defense experience if you like?
yes that would be great what advice would you have about trying to do a settlement 0n my own with discover card or their attorney that they have hired to sue me
I sent you an email with a list of collection defense attorneys in Indiana.
If you work toward settling this on your own, you would want to be ready to pay 50% or more of the amount you are being sued for, and should be reading through this page about settling when sued.
I just signed up for Freedom Debt Relief. I have about $30K in debt with 5 creditors. 2 are with Wells Fargo. They offer legal representation with National Litigation Law Group for $12 a month. However, if anything goes to court, you are responsible for all court costs. I have been current with my payments but possibly looking forward to retirement some time in the future or not wanting to have to work until I am 80. I work in the legal field so all of this is concerning to me so before I get behind as I have only missed one payment on one Wells Fargo account. I do not know if I should just withdraw and keep on making payments on my own. It seems like many people are sued by by companies that buy the debt. I just want to get out of debt and not incur late fees and legal actions and costs for that.
List the accounts and balances in a reply, along with how much you are putting in escrow each month. I can respond with what your situation looks like to me, and how I would approach the settlements in order to reduce or eliminate the likelihood of being sued.
How is FDR working for you? I enrolled in September and have not had any settlements. Wondering if I should just file bankruptcy
Michael,
Thank you so much for talking with me the other day. I was being sued for a Summary Judgement on my American Express account and the settlement company I had hired to work for me was not getting the job done. They seemed to have dropped the ball. Your advice was that I should try calling them myself even though it was only two days before the court date. I called the attorney/collection firm and within 2 hours we had come to a settlement agreement that both my wife and I could live with. I withdrew that account from the settlement company, negotiated the terms of a settlement myself (which ended up saving me about $1500 over what the company was trying to settle for.). We got the whole deal done the same day and the court case was dropped. It was much easier than I thought.. Thank you so much for such great advice.
Hi Michael,
It’s definitely not a refile. This is the same original case as filed in 2014 according to the court website. Here’s the time line as I read it:
2/18/2014 Case filed
02/18/2014 Trial Date 4/15/2014
02/18/2014 Notice Sent – we don’t move around a lot, but we never received any notice at all in the mail. Also, by the time a process server would have come around, we were indeed gone, HOWEVER, even with the moves, I filed a change of address with the post office, so any notices sent to us would have been forwarded and not only that, address correction sent to the court.
The dateline continues all the way through until we were finally served. Now, this guy is an attorney, but I believe he is a collections attorney. I remember reading on here somewhere that these guys would often try to pursue a case even if outside the statute of limitations, counting on the fact that in most cases they could get a default judgement.
Anyway, I’m going to try this without an attorney because as of today, I still haven’t heard anything from legal aid, but if they insist on pursuing, I am going to simply have to put the old debt on hold that I am paying back, and use the money for now to get a lawyer. In that case, I will have to get a continuance so that I have time to put the money together.
Thank you for your time. If you can think of anything else, please do post it here. This info might be beneficial to someone else in a similar situation.
Hi again Michael, My question about this was the last one you answered on this page (John D. July 2016.) I have another question for you. I KNOW you are not and attorney, so I’m not actually asking for advice (disclaimer on behalf of you, lol)
I am going to give you some key dates and I would like to know what you think, if I may perhaps be heading int he right direction. I would get an attorney, but frankly, I’m well on my way to taking care of my old debt (except this one), and I don’t have the spare cash to do it. I’m trying legal aid, but no response from them as yet.
Now, in the State of Maryland, I read somewhere like on FindLaw.com I believe, that the statute of limitations for a landlord to sue a tenant is three years. I believe this to be 100% correct.
That said, the “start” time for the debt would be the day I vacated the premises which in this case would be March 31, 2011, If I understand correctly, this is the date on which the court considers the debt to be incurred.
The landlord did not finally turn it over to an attorney until February 2014 and the attorney filed the suit on February 18, 2014. According to the Maryland Judiciary case website, they attempted to serve me the court documents on March 20, 2014. The court website says that the process server reported me as “moved”. We did in fact move from an apartment, to a house right across the street from the apartment.
The next attempt to serve us the papers was March 7, 2015. By then, we had moved one more time, as the landlord we were renting from allowed the house to go into foreclosure and we were forced out. However, we didn’t even actually move until May of 2015 – I guess it just happened that we were not home when service was attempted. My wife was probably at the doctor or something, and I know for a fact that I was working that day – I checked my old schedule.
Now, the lawyer still hadn’t found us by then. It was I that contacted him, because like I said in my previous communication with you, I am working hard to try and clear all of my old debts.
Finally, papers were served on us on July 26, 2016. Even though we were finally served on July 26, 2016, and despite the fact that the case was initially filed on February 18, 2014, doesn’t this fall well outside the statute of limitations? What I mean, is that even though they filed the original care in February 2014, isn’t that STILL outside the statute?
What I want to do, is to file a motion for dismissal of the case based on Maryland Statute Md. Code Ann. Cts. & Jud. Proc. § 5-101; but if I am not correct, I don’t want to look silly, or should I go ahead and file it anyway, “just in case” the judge would accept it regardless.
The time you tick off the clock would typically be based on when they filed the action with the court, and not when they serve you. Based on your dates they got to this a month before the 3 year statute you looked up.
My problem is the same case being active in the courts docket for 2 and a half years. That is unusual. Most courts will dismiss actions in a much shorter window of time if you cannot be served, or there is lack of progress. That is the angle I would look at. Did you verify that they did not just refile it more recently (placing it well outside the 3 years)?
Quick question for you Michael –
I live in Baltimore Maryland. I am being sued by an attorney named Blitz in Baltimore county who is representing the plaintiff, Riverview Townhomes. We left the lease about 6 months early. There were issues with dangerous neighbors, and the office refused to handle the situation. (The guy in question eventually went to prison because he killed someone in the house across from us, but it was AFTER we moved) Anyway, they are suing for the remainder of the lease, plus, they said that we caused $2,000.00 in water damage to the house. What actually happened there, was the next door neighbor moved out, and a pipe broke or something, and the water seeped through the walls and into our kitchen. Anyway, the total of the lawsuit is around 4800.00 total. I have no way of proving we did not cause the water damage, so just to try to stop the lawsuit, I mailed the attorney a letter and offered to make monthly payments to get rid of the debt. I’m not in a position that I have any money to negotiate a lump sum, but monthly payments of $200.00, maybe even $300.00 are do-able (I told the lawyer ($200). I’ll pay the debt, but my biggest fear is that they will simply garnish my wages and get me all screwed up. It may have been taken care of much sooner, but I was one of those that was long-term unemployed and it was several years before I was even able to get a job that was full-time and above the barely livable wage. I haven’t actually been served, or received the court papers yet, so when I answer, what should I say? Can I stop any garnishment from happening and making things worse? I’ll pay the bill, but if they garnish, it will really screw things up, that I have spent the last couple of years trying to repair.
Oh yeah – forgot to add that the attorney has not answered me back, and I sent the letter like three weeks ago, maybe four.
Start saving up what you will send them if the agree to that deal. Save even more if possible.
If it were me, once served the lawsuit, I would file an answer denying their claims, and buy as much time as I can tying this up in court. If I have 2k saved up after 5 months (or around about), I would see about negotiating the suit for a lump sum pay off and get it dropped.
You do have a good shot at them agreeing to the payments of that amount in order to avoid wage garnishment. Just be sure it is something that is agreed to in writing, or in court.
Thanks! Appreciate your time immensely!
Hi Michael, I’ve read through all the comments and I have learned quite a bit from your responses, but I still have questions for my own personal situation.
Over the last 6 years I accumulated a lot of debt, as my boyfriend has been having a hard time finding decent work here in NY (he moved here from CA 6 years ago). A few year ago, I made two debt consolidation loans through 2 of my local banks here in NY, which I still pay on, but struggle to.
In 2014 we were still really struggling and I took on a full time job making $500/week . I was at this job about 8 months, until I was robbed at knife point at my job. I left my job 2 weeks later out fear for my life – and the police & detectives telling me what danger I was in (the store I was working in, was located in a very bad drug/crime area). We would find used needles on the shelves – it was that bad.
We were getting shut off notices from our gas & electric company (NYSEG) and the moment came where I literally did not have funds to pay bills any more. I did lots of research and did not want to file Bankruptcy. I found National Debt Relief and in February of 2014, I started working with them, and they have been great in helping me reduce my debt.
Unfortunately, some of my creditors refuse to work with them, and I have received several summons. National Debt Relief (NDR) has been writing up Pro Se answers and I’ve been filing them at the court. So far I have not had to physically go to court, because they have settled every time. But this past weekend, I received a Judgement Summary from Solomon & Solomon in Albany, NY. ( I live in Upstate NY, near Rochester). I have forwarded it to NDR but I’m still waiting for their response in what I should do. I originally had an arbitration scheduled for August 9th but this judgment is dated for July 21st.
By the way – I did not put my consolidation loans in the account with NDR, I have been current on them for the most part.
I have a mortgage on my home – I paid $55K for it and still owe around $43K, I’ve been in this home for 12 years. I have a 2007 Santa Fe with 54K miles which is paid off. I have no other assets – no jewelry, stocks, savings, and about $12 in my checking account. I’m hurting badly.
I’m self-employed, and my income varies daily. Some days I’ll make $0, some days $100, some days $200 (although lately it’s been less than $100/day). I sell on various online venues – my own website, Etsy, Amazon, etc. I make all the products I sell myself.
I pay NDR 2 payments per month – $610 total between the 2 monthly payments. Pretty much all my money goes to make those payments (as I must make them because the payments I make are for creditors they (me) agreed to pay.).
My question is – when I go to court for the Judgment Summary hearing this July 21st, can they garnish my wages, take my car, take my house? I have very little and I struggle for every penny I have and I am terrified.
I was under the impression that if I answer all court paperwork and attend all court dates, they cannot do this. But I understand that is not the case from reading all the comments below.
Thank you for any help you can offer me.
Oh and I also just received notice from the IRS that I owe $2100+ from estimated taxes from last year (2015) because I simply did not have the money to pay towards it. So I have to set up payments with them as well. I also have not paid anything towards my 2016 estimated taxes because I have no money. My boyfriend got a decent job in February and his company was just seized by the state this past week because the owner owed so much in back taxes, so now he’s out of a job too. So frustrated, I don’t know how this could get any worse. Hoping for a ray of light at the end of this tunnel.
National Debt Relief does not help with tax debts to my knowledge. But you do not need anyone’s help necessarily. You can propose a repayment plan that should not exceed your confidence to pay it each month. And you may want to hold off contacting the IRS until you have the Synchrony accounts figured out.
Believe it or not, the IRS is far more flexible than many of our nations credit card lenders.
I should also add the amount I am being sued for, for this particular case was for Synchrony Bank and I owe $3400. The other accounts I am being sued for are also from Synchrony Bank in the amounts of $10K, $7K, and $4K., but I have not received any court dates on those since filing with the county.
Being sued on all those Synchrony accounts is not normal. One way I see that happening is if a debt buyer picked them all up. Synchrony has been selling a lot to Portfolio Recovery Associates of late.
Who is the named plaintiff on the $3400 lawsuit? Can you look up the other cases on line that you have not been served for yet and tell me who the named plaintiff is on those as well?
What is the name of the collection law firm handling your case? Is it the same on all Synchrony debts?
Is National Debt Relief aware of all of the lawsuits?
Did I understand you correctly when you said the monthly amount of money you send to National Debt Relief is already committed to funding settlements that were made on other accounts? I want to know what you have to work with that is building up in your settlement account, or if there is simply nothing left over.
Synchrony Bank is listed as the plaintiff in all of them. The lawyers for all are Solomon & Solomon, and this one for $3400 is through one attorney at Solomon & Solomon, and the other 3 are through another attorney at Solomon & Solomon, all in Albany NY.
The one for the $3400 case filed through a local (small) city court and that one is the one I have the judgment hearing on. The other ones were filed through the County Courts and I understand they take longer to hear back on court dates, etc. Although this is all brand new to me.
These were all credit card accounts I had through another bank – GE Capital, I believe, (for Walmart, Amazon, Old Navy, Paypal) and then they were bought out by Synchrony Bank I believe last year.
I’ve received separate summons for each one. I have only heard back from the one filed through a local small city – I originally had an arbitration date set for August 9th, but now I have a Judgment hearing set for July 21st. The others filed through the county I have not heard back from yet.
National Debt Relief is aware of all lawsuits, and they assure me they are aggressively pursuing a settlement. However, all of my money I give them each month is going towards a National Bank of Omaha settlement that will not be paid off until mid-2017. I received a settlement offer for the suit I have the July 21st Judgment hearing for – they offered a settlement of $2700 but they needed large lump sums and I didn’t have it. I literally have nothing. I believe National Debt Relief loaned me a little extra to be able to settle with National Bank of Omaha as it is.
I’m so terrified they will take my only vehicle (which is paid for), my home, bank accounts, etc.
I called National Debt Relief today and they advised me to get a lawyer, which did not make me feel at ease. I’m paying them, they are writing up all my Pro Se answers, and I have to send them all legal documents I receive, yet they can’t help me with this. I have $0 to get a lawyer with.
Thank you so much for taking the time to answer my questions, it is greatly appreciated.
I’m also wondering if I would be better off to file bankruptcy. I really didn’t want to go that route, but if they put a levy on my bank accounts, I will lose everything. I’m barely getting by with the little money I do have in there. I just don’t want to lose my home and my only vehicle.
What is the total amount of debt you still owe as of right now? Include the First National balance that National Relief is still sending payments to.
It’s around $31,500 for all credit cards, and that also includes 2 consolidation loans I took out a few years ago.
$31,500 is just all credit card debt. I also owe around $43K for my home, and $2100 to the IRS from last year’s taxes I didn’t pay enough into (because I didn’t have the funds). I need to keep my home so not sure if I’ll be able to do that if I file bankruptcy.
I haven’t received a response from you. 🙁 But I ended up going to a bankruptcy lawyer and I will be filing chapter 7.
My apologies Dina, I missed the additional info you posted. You would be far better off financially if you can do a chapter 7. That will run you less than 2k, while the settlements and NDR fees will likely reach half or more of the balances owed.
I do like chapter 7 in your situation.
You would be at risk of wage garnishment if you earned them in the traditional sense. You work for yourself so that is not likely. Your bank account is at risk from a bank levy, and you need that account to do your business.
Watch this video on my YouTube channel I put up last week about avoiding garnishment and bank levy: https://www.youtube.com/watch?v=B4qsAdlpVSM
I have more feedback about managing the situation, but have questions too. I am going to post those in reply to one of the other comments.
I received a summons for my Wells Fargo account. I started with freedom settlement in november. I called them and advise me to email the paperworks and call the legal department.
I’m not so sure how it works are they going to help me or do i have to get a lawyer. I’m really lost right now. Please help!
That is a pretty quick turn around from starting with Freedom Debt Relief to being sued. When did you last pay Wells Fargo? Was the account less than 2 years old? Were there large transactions, cash advances, or balance transfers in the 12 months leading up to payments stopping? What is the balance owed?
What I would encourage you do from here will depend on the answers to those questions. Post your replies and I can help from there.
Hello – I hired Elite Financial Services to consolidate my credit cards and negotiate a settlement they said would be 50% of what I owed. I was not behind on any of the payments, but I did not want to pay for the next 30 years so I signed up with them. Now I’ve been served becasue BOA wants the $17,000.00 I owe them and since I don’t have it, there will be a judgment against me. I am HORRIFIED. I don’t know what to do and neither the debt consolidation company or the debt collector are offering me anything that is helpful.
How long ago was it that you stopped paying BofA and started saving up each month in the account Elite Financial Services suggested you set up? How much money is in that escrow account now?
When were you served?
Who is the collection law firm handling the lawsuit?
What state are you in?
Were there any other accounts in your debt settlement program with Elite Financial? If so, how many are settled, and how many are left to settle?
Dear Michael,
This is an early stage problem, but hoping for some insight:
My good friend has about $40K in debt plus $35+K in student loans coming due (they are hoping to get a deferral or forbearance for those). With their income and expenses, they are in the hole monthly by a few hundred dollars but they have very bad credit for any additional loans. It’s my impression that with careful planning or additional income they could skirt on by, especially if they are able to obtain the forbearance or deferral on their student loan.
They have yet to miss any payments but have applied to NDR (National Debt Relief) to lower about half of their debt (i.e. they are applying for aid with half of their debt). NDR estimates this $20K can be reduced by half and would charge a 25% fee. In other words they would save approximately $5000, or approximately $300/month in payments..
The creditors are two major credit cards at $2k and $6K and a Loan Servicer at $13K..
Personally, I feel the risk of lawsuits, legal fees, a damaged credit record and an unsuccessful result from NDR does not justify this measure, considering the $4000-$5000 in savings they may achieve. I figure asking you at this early stage is much better than seeing how things may turn out. Also the fact that they have have not yet to miss any payments makes me question this strategy.
My impression is that NDR’s strategy involves their clients missed payments causing the Creditors to negotiate. In this case I believe NDR asks my friend to stop paying until the negotiation is completed (which would very likely damage their already poor credit). Instead my friend contributes the payments to a separate account. NDR’s final solution has my friend paying by monthly payments to payoff the negotiated amount and fee for approximately 3 years.
Any insight on this strategy or possible alternatives would be very much appreciated!
.ps. My friend is currently in the stage where they can exit the contract with little to no loss to NDR.
National Debt Relief and companies like them (including half the stuff I talk about) are generally right for someone when they cannot continue to make the minimums, and do not want to file chapter 7 bankruptcy, or want to avoid chapter 13.
I am not sure your friend is to that point yet. If the student loans were to be in deferment or forbearance, and that allows room in the monthly budget for debt roll-up, that is where I would start.
Those student loans may qualify for an IBR plan too.
You may want to have your friend call in and consult with a nonprofit counselor about consolidating those bills into one lower monthly payment. I am not talking about a loan, but consolidating through a credit counseling agency. Call 800-939-8357, then press 1 when you hear my voice. That will put you in touch with a counselor for a free consult, the goal of which is to get an exact to the penny quote of what her payments would be reduced to. Then you mull that over and compare it to how settlement would look.
I have a similar problem. I enrolled in a debt consolidation program last year. Yesterday got a summons from Target, one of the credit card i owe. Called the office handling my debt consolidation and they said they will send me a “pro se” and I should give it to the court. My question is, so I could still be sued even if I’m in a debt consolidation program? What is the best way to deal with this? I am stressed because i still have 3-4 accounts not settled yet. I don’t want to get summoned again. Thanks.
Is your debt consolidation plan one where you are saving up each month to settle, or where they try to dispute your debts to eliminate them? What is the name of the company you signed up with?
It is common to be sued while you are saving up to settle, or using questionable dispute programs. You next step to deal with this, and the remaining debts, can depend on your finances and your goals.
How much are you being sued for?
How much is owed on the other accounts, and who are those with?
What are you able to save each month?
Can you raise money quickly if you needed to put out a fire (settle a lawsuit)?