I was recently sued by a collection agency and I lost, but not by default (I was present at the trial). I have not heard from the collection agency as far as making payment to them as of yet. They may be filing a motion for a different verdict other than the temporary verdict made by the judge. I owe over $3,000.00; however, I am unable to pay all at once, due to working part-time. Will I be allowed to arrange for a payment plan with the collection agency, or will the collection agency automatically garnish my wages since they received a judgement in their favor? Should the collection agency contact me with regards to making payment arrangements? I live in the state of California, county of Sacramento. I would also like to know if it is legal for a collection agency to collect on debt that the original creditor charged off. I recently read something that stated it would be illegal for a collection agency to collect on a debt that the original creditor took as a loss, because the creditor receives credit from the IRS for charge offs. Any help in this matter would be greatly appreciated.

Charge off has nothing to do with their ability to collect and sue, It only means they have to go back and pay taxes if they collect the money.

And no they will not contact you to set up a payment plan, that was what they would or should have done prior to winning the judgement against you. Now they will most likely attached and freeze any and all of your bank accounts, and garnish you pay. And no you will not be notified first, they can just do it now.

What did the judge order in his/her judgement as far as payment arrangements? It's possible that the collection agency may just execute a writ of garnishment and attach your wages. As for being unable to collect on a debt that's be written off, I'm not sure about that. I'm assuming that it's not, since a judge awarded the collection agency a judgement. But then judges aren't infallible either. You can always appeal the ruling but it may cost you more than the judgement amount you've been ordered to repay.