Being sued by credit card company, I want to consolidate

Shelly,
What exatly are they trying to sue you for? If you're willing, please give us the details and we would be happy to help you out in any way we can. Definitely seek out an attorney if you don't already have one.

Hi SHELLY

Welcome to the forums.

The consultants working in the debt consolidation program are trained to handle such kind of situations and prevent you from being sued.

May I kindly request you to explain the situation so that I, Lindsey and the rest of the community will be able to offer some valuable advice.

Regards
Roxette

They are tying to sue me for not paying my credit card bill.

I'm not sure how to go about doing this and I don't want to be sued and they are talking about attacking my wages and taking away 33% of my salary.

Hi Tasha,

Welcome to the forums.

If you have defaulted in some of your past debts, the credit companies can always insist to take some actions against you but that has to cover the legal aspects.

You can avoid such situations by making small payments to the credit companies. Take a free counseling after registering in this website. One of the trained consultants will call you and review your debt accounts. He will negotiate with your creditors and offer you easy repayment options. You can choose the best option suitable to your present needs and get the program started. Once all the accounts are paid off, your credit ratings will also improve and you will be free from all such hassles.

You can put your name and phone number in the sign up form for the consultant to call you back.

Regards
Roxette

Last year, 2 of my own debts were turned over to attorneys. One of them threatened to sue in October. The other one never contacted me. At the time, I was under a debt management plan ... and both creditors were receiving payments. It's now April and, so far, no lawsuits. However, I contacted both attorneys in October (even the one who never contacted me) and told them I was in the process of paying off the debts through my plan. According to my dmp adviser, such contacts are usually enough to keep the wolves away from your door (lawsuit-wise) as long as your payments stay regular and timely.

However, I noticed that both attorneys ordered copies of my credit report. They were probably making sure that other creditors were being dealt with. And, assuming they see "movement" in the right direction, and if their client is getting regular/timely payments, I suspect they're more prone to wait and see than they are to sue.

Someone correct me if I'm wrong (grin).

The bottom line is that lawyers get paid whether they sue or not ... and there isn't much money to be had in suing a poor person. However, if attorneys order credit reports that indicate a person tetering on the brink of bankruptcy, they may sue you quickly ... since, to my knowledge, bankruptcies don't protect you against judgements already ordered.

Still, even if you get sued, it doesn't mean they'll immediately start garnishing wages or sending people to your home to seize property. Some lawyers will just sue to get the judgement in writing ... safeguarding their client in the event of bankruptcy ... but with no intention to take any immediate action. This is especially true if you really are paying off your debt in a timely manner.

But ... the best advice is to see an attorney. One thing to keep in mind is that collection agencies must adhere not ONLY to the Fair Debt Collection Practices Act, they must also adhere to the laws of the "state" in which they collect. In my state, telephoning a debtor more than 5 times a week is a violation of state debt collection law. The one creditor whose attorney threatened to sue me called me daily and sometimes twice daily. And because I have a broadband phone, my incoming calls (with caller-ID) are logged. Hehe, if this creditor decides to sue me in the future, my attorney will have a surprise waiting for them in court (I have prepaid legal insurance, my attorney won't cost me a dime).

In some states (like mine), violations of debt collection law can "erase" the debt and subject the creditor to punitive damages as well. And in extreme cases, could even cost the collector their right to do business in the state.

LessIsMore,

You are quite aware of your rights as a debtor. Moreover, you have been paying to your creditors via dmp. So there is nothing to worry. Make sure that you receive payment receipt from your creditors.

Stan,

Two of my creditors are updating my credit report on a continual basis, showing progress. One of them will be paid off in May (grin). But to be honest, only that creditor has bothered to contact me with a payment receipt.

However, on my recent credit report, all creditors seem to indicate "movement." In any case, there is one good thing about a dmp that should be mentioned.

If I was sued by any creditor and if I was paying them directly, it would be my cancelled checks against their books ... and the creditor could still say they never approved of the repayment plan.

BUT, if payment is made through a debt-management plan, and if those payments were accepted over a course of several months without any challenge on the creditor's part, the DMP receipts of cashed checks would bear greater weight ... and the judge would likely ask, "If you didn't approve the plan, and since payments were made by the plan, why were they not returned TO the plan?"

In short, having a DMP sets up "established practice" if payments are accepted without question ... making a litigious creditor seem like a killjoy while the debtor, by virtue of a DMP, has proven their desire to address their debt in good faith.

Since beginning my plan, I've paid off a number of debts -- and after mid-May, only 5 will remain. And the more debts a debtor can hold up as "PAID," the more credibility they'd have of "GOOD FAITH" if push came to shove. And this is especially true if they have the "buffer" of a DMP ... that can attest to the payments being made and accepted.

Just a P.S. to my last post. In my case, though I have no plans to use it, I have a "safety net" of last resort. Creditors are probably "wise" to this which is why they're behaving themselves.

In summary, I have passed the minimum age for retirement where I work and can retire at any time I wish. If, in the process of paying off my creditors, one of them decided to sue me and institute a judgement against me ... and if they later attempted to garnish a paycheck, I'd simply retire.

This would unfortunately end up hurting all remaining creditors and I'd never do that unless forced to. But, in my case, my retirement check would be in the form of a U.S. Treasury check ... and Treasury checks are judgement-proof (except by the I.R.S.). And when my Social Security kicked in, it too would be a Treasury check ... and again, would be judgement-proof. In addition, in my state (not sure if it's true elsewhere), my car could not be seized since it has a resale value under $1,700 ... nor could any bank account be seized as long as it was used to deposit retirement and SS checks only (and as long as the balance didn't exceed $10,000).

In short, filing a judgement against me would force me into the situation of using my safety-net ... which would, in essence, make the judgement inert.

Since you have been paying the amount to the original creditor the attorneys cannot bring legal action against you. I'm also not sure why did they pulled your report. If you cannot find a good reason for these inquiries, you can dispute it. Send them letter to remove the inquiry from your credit report.

Also, before filing suit they analyze your status. If they find that you are almost judgment proof, probably they won't take you to court.

Stan,

Perhaps I was not specific. Except for one debt, all other debts are in the hands of collection agencies - not the "original" creditor. And, according to my Equifax credit report, any creditor can request a copy of a credit report for purposes of "periodic review." I can understand this since, if they saw any indication that I might go bankrupt (ie., loss of employer), they might attempt to sue quickly to get a judgement.

Yes, they have probably analyzed my status and know that I'm past minimum retirement age ... and that my two sources of retirement income would be in the form of Treasury checks. If they haven't ... and if they attempted to garnish even one paycheck ... they'd get a quick education.

I have every intention of paying off my debts in an orderly and timely manner as defined by the dmp. And if they all leave me alone, ALL debts will be cleared no later than mid-2008. But sadly, if even ONE of them attempts to upset this delicate 'applecart', all remaining creditors may have to suffer for it. If I'm given the choice between insolvency and survival, I'll be forced to choose survival - and will retire without much hesitation. And where I work, I can retire with only one day's notice.

Not that I would do this at the "drop of a hat," though. I'd first contact the creditor to let them know of my situation in hopes they'd reconsider. If they fully realize that a judgement against me would be impossible to collect, they'd likely back off - unless they were just doing it out of spite.

I would imagine this varies from state to state. But does anyone know if there's a general rule pertaining to attachments and/or garnishments? Unless I've read my state law incorrectly, paycheck garnishments cannot exceed 25% of a person's net-income. In essence, if one creditor got a garnishment order, the could get up to 25% of the paycheck - but if two creditors got orders, they'd have to split that 25%.

You are right with the idea of garnishment.

Usually creditors do not sue a person who is almost judgment proof. However, you can consult a lawyer to know your options. Keep us posted.

Stan,

Thanks for that link. I hadn't seen that page before. Since I assumed (a bad habit, hehe) that state law covered such things, I looked primarily for state law limitations. As it happens, my state law merely parrots existing Federal law regarding the limitations of creditors to garnish/attach.

The reason I brought this up is because, earlier, Tasha said she was being threatened with having 33% of her income garnished ... and nobody replied to her. The nasty thing about some creditors is that they will "lie" about such things in their threats to debtors. Hehehe, perhaps we need a new law (grin):

THE DEBT COLLECTION 'TRUTH-IN-THREATS' ACT

In Tasha's case, if a dozen creditors all threatened her with such an action, the most that ALL of them would get is an "even split" of the "25%" maximum. If a person earned net income of only $1,000 a week, the worst case scenario would be that this weekly net income would go down to $750 a week - regardless of what anyone threatens to do ...

...UNLESS...

the entity doing the threatening is a government taxing authority (IRS, state revenue department, etc.).

FWIW, one of my original debts (paid off a while back) was state tax. And even they only threatened to garnish 25%. The real wildcard, though, remains the IRS. I'm uncertain if they have any specific limitation on what they can garnish or attach. If you have a link to such information, that would be a good one to post.

Whatever happens in my case (other than the current "nothing"), I'll post it here ... as well as advice given by my own dmp advisors. I'll close with a little anecdotal advice of my own - preceded by the disclaimer that I'm not an authority on debt law.

I've always been a minimalist. I live simply and don't consume very much. My only fault was being trusting and supportive of an ex-wife who must have been God's gift to consumer creditors - right up to the moment she went bankrupt last year (true). Her consumption got HER in trouble. My helping to bankroll her consumption (my own fault) got ME in trouble. But now that I'm living on my own, my own minimalism has become less of a "habit" and more of a "best friend."

My handle here - LessIsMore - is an "ethos" to me. It's a version of the hobo ethic - that people do not own possessions, they are owned BY their possessions. Consequently, I don't have too many possessions and like it that way. And if more people adopted this ethic and took it to heart, there'd be far fewer people in bankruptcy courts and far fewer people seeking relief via debt management plans and other consolidation scenarios.

Off pulpit (grin).

The answer to your question about the IRS lies in that same link:
[quote]What about non-tax debts owed Federal Agencies?

The Debt Collection Improvement Act authorizes federal agencies or collection agencies under contract with them to garnish up to 15% of disposable earnings to repay defaulted debts owed the U.S. government. The Higher Education Act authorizes the Department of Education's guaranty agencies to garnish up to 10% of disposable earnings to repay defaulted federal student loans. Such withholding is also subject to the provisions of the federal wage garnishment law, but not state garnishment laws. Unless the total of all garnishments exceeds 25% of disposable earnings, questions regarding such garnishments should be referred to the agency initiating the withholding action.[/quote]

P.S. I only have one debt not part of my dmp ... a tax debt to the I.R.S. It's not all that much of a debt and will be paid off before my DMP is fully paid off - but still, it's a serious debt consideration. And I'm going to say something that might surprise some people. But here goes anyway. In ALL my dealings with the I.R.S., I've never met more helpful, more courteous, more understanding people in the debt world. If anyone with a Federal tax debt chooses to "communicate" with the I.R.S., I think they'll find the same thing is true. On the flipside, people who choose to "ignore" the I.R.S. do so at their own great peril.

And nowadays, paying off tax debt (if you have a computer and an internet connection) is a piece of cake.

They will not use the information you give them to "zap" you. By law, they can only take funds "you" authorize them to get.

Clay,

Thanks for that info. Interesting that they limit the I.R.S. more than they limit private collectors. Still, though, if a person had private and Federal garnishments in place, that could zap a 40% chunk out of a person's net paycheck. So, the rule of thumb is:

DON'T IGNORE THE I.R.S. (or other Federal debts)

...even if the Federal government ignores its own debts (I couldn't resist, hehe). Deficit spending, coupled with Federal debt collection, is the government's way of saying, "Do as I say, not as I do." ;)

I lost my job in '92' and haven't worked since. I tried to get some help with my credit balance, like lowing payments etc. they were very rude, they treated me like i was was some kind of criminal. just wouldn't listen to a thing i had to say. my balance back then was less than 5000 dollars, now they are suing me for almost 11000 dollars. is there anything i can do? i can't afford an attorney.