bad debt/negotiating with attorney/summons
Date: Thu, 06/21/2007 - 09:37
After doing my research on an old credit card gone bad, I Have decided to contact the attorny and try to negotiate a settlement and payment arrangements. I had a HSBC NV card a few years back that went bad. I received a summons Monday to appear in court in exactly 2 months. The attorney is from the Hosto & Buchan law firm. I have noticed that they have a bad rep when it comes to these dealings. I am a senior in college and do not have the resources to completely pay off the debt in one payment. I have their number and want to call to set up payment. What should I say/do/tell them? Should I call the HSBC or is it out of their hands now? Will the account show paid in full on my credit report whenever I get it paid off? If I am making regular payments, will I still have to go to the court date or will they just cancel it? If so, should I take documentation showing that I have been making regular payments? How should I make the payments....Check? Cashiers check? Money order? Should it be sent in a certified letter to show that it has been received?
Also, if I wait until the court date to begin payment what is going to happen? Will they garnish my wages? Will it just be an ordered payment schedule? Will it show a "judgement" on my credit in addition to the bad account? Will that show paid in full when I pay it off?
I would have them verify the amount owed and have them show proo
I would have them verify the amount owed and have them show proof that they can legally settle this debt. If you have some cash to settle the debt I would call the lawyer and offer that as settlement in full. I would start with 30% of the amount due at the time of default after all late fees and penalties are subtracted off as settlement in full in writing. If they won????????t accept that then ask them what they propose. I would not accept a payment plan at all. Do not send them post dated checks. Do not give them electronic access to your account. Pay with either a paper check or a money order after they send you a signed letter accepting a set amount of money as settlement in full. Since you are in college you are in a pretty strong position to negotiate being as you probably have no assets and no income to speak of. Keep the letter they send you and a copy of cashed check as proof you settled this account forever. I once settled an account for about 50% of what was owed and then 2 years later they tried to collect again. I sent them a copy of the letter and the check which took care of the problem.
If you do not come to an agreement prior to court then you will get a judgment against you. I am not sure if and when these show on a credit report. Once a judgment is established then the court will determine what kind of payment has to be made. The judge will decide if your wages can be garnished and for what amount or the judge will set up the terms of repayment if it is done by a personal check each month. You could offer a cash settlement at that point in front of the judge as well as long as you have the cash to back it up. Again I would start with the offer of 30% if you have it up to a maximum of the most money you can come up with. A settlement can be arranged at any point in this process even after they have a judgment against you. A judgment is only good if you have the means for them to collect on it anyway. Once the account is paid in full it will show on your credit that the account was settled for less than what the creditor was owed. It will probably show as a charged off account. It is really a gray mark on your report. It is not as bad as having an unpaid debt that is delinquent or a bankruptcy but its worse than paying the balance at the due date in full. I had a lot of settled accounts and had no problem getting a good rate on an FHA loan on my first house and a good rate on an auto loan. I got the standard rate at the time for anybody that had decent credit. I did not use a sub prime lender which typically screws you over on the rate and the upfront fees.
This link will take you to another post I wrote that has other advice in dealing with judges and settlements. There is a post on page one about settling and a post on page two about the court date.
http://www.debtconsolidationcare.com/settlement/dropout-debtcompany.html
settling debt with a lawyers office
I had a discover card that had a 15,000.00 balance which I could not pay, then it went to 18,755.00 after all the late fees, over the limit fees, and high finance charges. Now the attorenys office is only willing to negotiate for 15,555.00 and I just found a card that Discover had sent me about a month ago willing to negotiate for 50%. If I tell the lawyer that I had gotten this card do you think they will take the offer still. I know that the lawyer has not charged any extra fees yet.
