Is chapter 13 overkill?

I am being sued by a collection attorney office. The amount of debt is for $20,000. I am the only one on the account, but my wife and I's disposable income is now (Bad luck at beginning of year) about $1500/month. Now, will it actually be better for me to take a wage garnishment over a 13? Her credit is great, and she brings the most in. 25% of my net is about $350-400/mo. Also, when a wage garnishment is granted, (state of Alabama), does it only deduct for three years, or does it do it for longer? Like, can they only deduct for three years, then have to resubmit, or is it being deducted until balance is paid? I have a appt. setup with an attorney next Friday, but just wanted to help/guidance. I have called the C/A quite a bit, but the person "handling" my case is never available.

Why don't you work out a settlement, either that or set up a payment plan. It costs them money to sue and they usually prefer not to but for that amount of bebt they almost always will take legal action if you don't try to work something out.

I replied this morning, but it didn't take, I guess.. Thanks for the reply. I spoke with the lady today, and she has a payment plan for me, but the one thing that stood out, was that she said that there would be a consent judgment tied into this. What am I looking at with this? I have not read any good things on here about those, but is that because those are bad experiences, or because it's not bad, just people don't wanna talk about them? Thanks in advance!

Well, keep in mind that with a 13 you will have to pay nearly 100% of your disposable income into the plan. The plan is not designed to leave you with "extra spending money" every month, and as others will attest, it leaves you with very little to live on. Depending on your income and other factors, you might end up repaying 100% anyway.

Regarding the Consent to Judgment -- I use these all the time. The benefit to the creditor is that if you default on the payments, they can go right in and enter a judgment -- ie they don't have to waste time serving you summons, arguing at trial, etc.

How does that benefit you? Well, there's usually a monetary benefit to you. First, if they have to spend time serving you and litigating at trial, those legal expenses and court costs get tacked onto your balance. Plus if they have to go to trial, they'll seek the full balance.

I usually offer my customers a settlement as enticement for them to sign a consent. For example, they might owe me $2500. My conversation would go something like this: "If you agree to the judgment and payment order, we'll draw it up for $2000..... If you don't want to sign the consent, then we continue our lawsuit, in which case we seek $2500, plus court costs of about $334.54, plus attorney fees of at least $350. So if we have to go that route, we will get a judgment for roughly $3200. And so it saves you about $1200 to sign the consent form."

So like I said, there's usually a monetary incentive for you to sign it. I have lots of customers sign them, and as long as they pay as agreed there's never been a problem. Keep in mind, though, that if you don't pay as agreed, then they can automatically enter that judgment without going to trial.

I gotcha... Thanks for the detailed explanation. They also made us a 50% settlement offer, and we are having to see if we can met that, so all of this will be done... Any advice on what to look for in the letters? Like if we do go with the payment plan, verify that there will be a amount of payment, and duration, etc, etc,...? Thanks again!