Got served/ answering/ and now curious....

I assume you are enrolled in a debt settlement program. Have you researched on their business?

You may call your creditors and put the proposals. If you make them work on your terms, you don't need any outside help.

Linda,

Have they come to any resolution with the creditor involved in the suit? Do you have enough money to settle the account before it goes to court? I know my debt settlement company warned me about being sued before I entered into the program. I had enough money to settle with one that was threatening law suit. I felt like I paid their enormous fees and nothing was being done. The credit counselor turned it around on me so I decided to leave the program. I was able to settle with mine on my own. Good luck in whatever you chose to do!

I was served on the 11th and it is the 17th. I have to answer, but there is still time for them to negotiate. IF they don't negotiate and prevent this from going to court for me, I will drop out of the program and try to do them on my own. No, I don't have money to settle, just 600+ in my reserves and that won't appease them for a 5,000.00 account.

Should they get a judgement, would it be to late to stop it through bankruptcy?

My biggest all time fear is that I will walk into court room and they will grant the judgement allowing them to garnish our check and take our bank acct.
I am willing to work out something before or during court without it going to that. We are struggling, surely the Judge will not grant them right to take our checks and bank acct.

We don't have any savings period, it is just that I get paid once a month and as soon as it hits the bank, it is gone the next couple of days for our bills. How will we leave if they freeze our acct that we live on?

Linda,

I don't think they can garnish and freeze your bank accounts. I think they might be willing to work with you before the court date. The first step is to answer the citation and go from there.

Linda,

I don't think they can garnish and freeze your bank accounts. I think they might be willing to work with you before the court date. The first step is to answer the citation and go from there.

If you do decide to file bankruptcy there will be a stay placed on the judgement until either you are discharged through a chapter 7 or it will remain on a stay until you complete a chapter 13 and once you successfully complete the 13, the judgement will be discharged. Have you already filed a bankruptcy? If so, I think you have so many days to add to it before the cut off.

Would it disappear off her credit report? Wow, how did I post twice?

I really don't want to file bankruptcy. I am hoping we settle either before or at worst at court.
I guess I will go and file today my answer to get the shit over with. I am praying for a call from CNI by Friday with payment arrangements.

I am surprised that they are suing for 5,000. Are you a homeowner? Do you have any other major assets? What is your monthly take home pay? Are your cars paid for or do you owe money on them? These are questions that a judge and that company will look at and want answered. A judge will not leave you flat broke without money to pay for your monthly expenses including monies owed to other unsecured debt. The problem with trying to settle is you can not settle if you have no money to settle with. Typically you can settle all the way up to the point of the court date but I doubt the company will take less than 50% of the balance after all the fees they charged are subtracted out. I am not sure if the balance of 5,000 that you gave was the amount before or after late fees and over limit fees but if it is I would shoot for a 2500 settlement if and only if you can come up with the 2500. I have heard of companies taking less though. One settlement I read about paid 1000 on a 5000 loan. Do not negotiate a settlement if you can not pay it. If you have 650 tell them that are all you have and if they want to settle you will pay that amount. If they do settle make sure you get it in writing and it should state that the account is settled in full. Do not make a partial payment that only brings you current. You should argue out all fees charge to date and argue that you should not be liable for any legal fees as well. If the company sues then their next step will probably be to go for wage garnishment. Those terms will be stipulated by the judge. The can not just go in and confiscate your check every time you deposit it into your checking account. They can not walk into your house and take your furniture or you cars. Again these terms will be based on your current income situation and will all be set forth by the judge. My guess is they won????????t settle for 650 and will take you to court and get a judgment. They will then try to act on the judgment by garnishing if they court allows it.

Being bankrupt depends on what else you owe. If you only owe 5000 unsecured then you are not bankrupt. If you owe 500,000 unsecured then you probably are bankrupt. You can not bankrupt secured debt like houses and cars. You can not bankrupt student loans and tax debt. You can possibly bankrupt debt like hospital bills and signature loans on furniture. You can bankrupt unsecured debt like credit cards. Bankruptcy laws have change recently and require more hoops to be jumped through to file. You will want to consult a bankruptcy attorney if you take those steps but I am not in favor of filing bankruptcy if it can be avoided. Once filed it remains with your for life even though it falls off your credit report. Many applications ask if you have ever filed bankruptcy which means in 20 years you still have to say you filed or you would be lying on the application.

Sorry that was my post.

Thank you so much for the informative post. This was very helpful. Actually, I have no money saved up to settle, only the 600.00. My credit card company thinks they will make arrangements with them, but they can not promise me that at this time. If it goes on to court, are you telling me the Judge will not allow them to leave us with nothing to live on? That is what I am terrified of the most, that our check will be garnished and/or or bank acct frozen.

Like I said before, I live paycheck to pay check. We have vehicle payment, house payment, debt settlment payment on other cards, utilities, phonebill, we do have satellite--should I feel guilty for having satellite? Food, medications we take monthly. Gas for work is expensive. I have approx 25.00 spare to my name after all bills, living expenses, food and gas is paid for.

I am praying for the best here and again, I thank you for your time in posting me.

If they do garnish your check, the most they can take is usually 25% . . . . And that depends on the state. Some state don't allow garnishments for unsecured debts at all. They would also have to get a court order to seize your bank account. Most companies will garnish your check first, they usually only go after a bank account if no other options are available.

My advice to you would be to contact an attorney. Even if you cannot afford one to go to court with, some don't charge for an initial consult. Or go to naca.net to find a lawyer that specializes in debt collection in your area. Goudah is correct that they can only garnish 25 % but even this can be a big amount depending on your gross pay. And it does vary state by state.

Yup, 25% is all they can garnish, I think there is a formula they use for your net pay, they deduct that and then garnish 25% of that, I could be wrong, but I think that is almost correct, at least I know they can't garnish more than 25%. It could not hurt to get a free consult from an attorney in your area.

I spoke with the court clerk yesterday when I filed my answer myself and don't plan on having an attorney with us if it goes to court. I consulted over phone with local attorneys and they all told me that a Judge will favor me and respect the fact that I am in a debt settlement company. They told me it was not likely that they will get a judgment to garnish unless i default in payment arrangements.

So, I consulted with local attorneys (because I wanted more than one opinion). Why am I still worried?

If they go after your savings accounts it will be to confiscate assets you have in them. They do not get direct access to your account to monitor and swipe money every time you cash a check. If the $600 is in an account with a debt settlement company I doubt they could get a judge to agree to let them take that money unless it is settlement in full but that is a guess on my part.

Quote:

OMG...How can I ever thank you. This has truely been full of information. Actually, it is my
husband being sued and I am going with him because
I can explain better our bills, income, debt settlement company and etc. I am going for moral
support for him.
He gets paid weekly and I get paid monthly. I
write out my bills and his bills each month on a
piece of paper. I know to the exact penny what
every cent goes to. I will type this all out
tonight on computer for court.

Thank you so much.

...oops. I forgot to finish what I was saying.
Should I include my income with his, or just do an
organized monthly statement of his income only?

I would think if you are married, the courts will consider any income joint income. I would say you should include all household income and expenses on the budget.

I would show both incomes on the budget but show them separated as yours and his and then add them together for a total. I think legally they can not touch yours as long as you are not on the credit card contract in any manner. Your monthly budget should include all income. You want the budget to be a real monthly budget for you household otherwise the judge will throw it out I think. Unfortunately when you marry you pretty much assume each others debts even if this debt was incurred before you were married. For example, you both are probably on the deed to your house and the mortgage to your house. If you were recently married then it is questionable. For example, I am the only one listed on my deed and mortgage and we filed separate income tax returns this year. I suspect that wouldn????????t matter though and even we would be consider joint as far as looking at the total income. If you are really struggling to pay all your bills and are not wasting too much money it probably will not matter anyway. Also, if he is the only one on the debt and the only one being sued they probably can not garnish your wages. The credit card company probably can not go after assets in your name only but chances are every thing you own is joint by now except for your paycheck.

We have no assets.
We own a broken down 1996 blazer that the salvage won't pay us 25.00 for.
We are paying on our home and have zero equity in it.
We are paying on our vehicle and owe 15,000 on it.
We have a paid off 1989 Bronco II that he drives to work, we paid 1200.00 for it and could not sale it for 1200.00 today.
We own nothing strait out that we could sale for money, or we would have already sold it to keep from getting in this here mess.

I have a bank acct open that I deposit my debt settlement payment into each month because I was afraid to use my regular acct. That is all I use it for.

I have our regular checking acct that our pay checks go direct deposit to, and we withdraw his total amount because he hates it being direct deposit and mine is only in there for a few days and I have checks written out on it before it is deposited.

I keep thinking our financial affairs will get better once we complete the settlement program. Not this Coming October but October of 2008 will be our third year in the program and near completion. Things have to get better.