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    in_forsaken_hands's Avatar
    in_forsaken_hands Posts: 6, Reputation: 1
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    #1

    Dec 11, 2007, 10:53 AM
    Credit Card Judgement Against Me - Accruing Interest - What are my rights?
    I have just received a notice from my local court that an old credit card account I have is suing me for payment. The account is currently with its' third collection agency. The second agency harassed me at work until I did my research and sent them a "cease and desist" letter. I have spoken to the collection agency the account is currently with to see if they are willing to "settle". They are not. He will only accept a minimum of $150.00 a month on the entire balance beginning early January. I told him I can only afford to pay $100.00 a month beginning late January. The creditor is not willing to bend, but this is all I can afford to pay them. I am in no way refusing payment at all. Also, this account is continuously accruing interest!! The collection agency said it will continue to accrue. How can this be?? Every time I talk to this guy, my balance has risen by at least $100.00 or more!! If they don't freeze the account, how will I ever get this paid off?? Can they do this? I'm really concerned and need to know what my rights are and what they are allowed to do. I have never had a judgement against me before (I did file bankruptcy in 2001 - I obtained the credit card I'm speaking of after my bankruptcy) and also need to know if I have any options, and what those options might be. Any help any one can give me would be GREATLY appreciated. THANK YOU!!
    George_1950's Avatar
    George_1950 Posts: 3,099, Reputation: 236
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    #2

    Dec 11, 2007, 01:29 PM
    Do you have other creditors? What chapter did you file under, 7 or 13? You should contact your attorney if you are in the same state; you may want to file a Chapter 13.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #3

    Dec 11, 2007, 01:36 PM
    You signed a contract wherein you agreed to pay back any charges you made on the card plus interest. You also agreed to pay attorney fees if you defaulted. You filed for bankruptcy once, I would think that taught you something about how to manage credit.

    In any case, they have the right to try and collect what you owe. Excepting a Statute of Limitations issue, they can take you to court to collect on that contract. If they do, they can garnish your salary, attach your bank accounts and, possibly, other assets. Your only hope in avoiding that would be a settlement. If you can't reach an agreement, they will pursue legal actions.
    in_forsaken_hands's Avatar
    in_forsaken_hands Posts: 6, Reputation: 1
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    #4

    Dec 12, 2007, 06:19 AM
    Quote Originally Posted by George_1950
    Do you have other creditors? What chapter did you file under, 7 or 13? You should contact your attorney if you are in the same state; you may want to file a Chapter 13.

    I have other creditors, but I'm current with all of them - another credit card, student loan and a car loan. I don't know if I filed chapter 7 or 13... what is the difference? Thanks again!
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #5

    Dec 12, 2007, 06:25 AM
    What you might consider, if you have repaired your credit to some extent, is seeing if you can borrow enough to make a lump sum settlement offer. Since the debt was probably purchased for pennies on the dollar, if you can offer a lump sum, they will generally accept 50-75% of the balance due. So, you may be able to borrow enough money to have a $100 or less payment as well as shave something off the balance.
    in_forsaken_hands's Avatar
    in_forsaken_hands Posts: 6, Reputation: 1
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    #6

    Dec 12, 2007, 06:30 AM
    Quote Originally Posted by ScottGem
    You signed a contract wherein you agreed to pay back any charges you made on the card plus interest. You also agreed to pay attorney fees if you defaulted. You filed for bankruptcy once, I would think that taught you something about how to manage credit.

    In any case, they have the right to try and collect what you owe. Excepting a Statute of Limitations issue, they can take you to court to collect on that contract. If they do, they can garnish your salary, attach your bank accounts and, possibly, other assets. Your only hope in avoiding that would be a settlement. If you can't reach an agreement, they will pursue legal actions.

    I plan to pay them. I tried to get them to offer me a settlement, but the best they can do apparently is 80% in one lump sum. I can't afford to pay out a lump sum, therefore, they said I have to pay the full balance in monthly installments. That is what I plan to do, but will they eventually freeze the balance or will it continue to accrue interest and fees until it's paid in full? Also, they said the least amount they will accept is $150.00 a month beginning early January... I can only afford $100.00 a month beginning late January - will they still pursue me in court or will they negotiate with me outside of court? Also, what did you mean by, "excepting a statute of limitations issue? I really appreciate your input!!
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #7

    Dec 12, 2007, 06:35 AM
    First see my previous reply about a loan to pay a lump sum. Was the 80% there response or did you make a counter offer? I still think you can get it down under 75% but only if you can pay a lump.

    You have offered a $100/mth payment, they won't accept anything less than $150. If you can squeeze out more than $100 try a counter offer but only if they freeze the balance.

    The point here is negotiation. Don't take anything they say as gospel. Negotiation means offer and counter offer. But you have to be serious in what you can offer.
    George_1950's Avatar
    George_1950 Posts: 3,099, Reputation: 236
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    #8

    Dec 12, 2007, 08:43 AM
    "I have other creditors, but I'm current with all of them - another credit card, student loan and a car loan. I don't know if I filed chapter 7 or 13... what is the difference? thanks again!" Chapter 7 is usually requesting a discharge from your liability to pay creditors; and Chapter 13 is a plan by which you repay some or all of your creditors within 60 months; I am certain you will recognize which one you filed. You should go back to your attorney for a follow-up visit.
    in_forsaken_hands's Avatar
    in_forsaken_hands Posts: 6, Reputation: 1
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    #9

    Dec 12, 2007, 10:43 AM
    Quote Originally Posted by ScottGem
    First see my previous reply about a loan to pay a lump sum. Was the 80% there response or did you make a counter offer? I still think you can get it down under 75% but only if you can pay a lump.

    You have offered a $100/mth payment, they won't accept anything less than $150. If you can squeeze out more than $100 try a counter offer but only if they freeze the balance.

    The point here is negotiation. Don't take anything they say as gospel. Negotiation means offer and counter offer. But you have to be serious in what you can offer.


    The 80% was their offer. I then asked if they can do any better than that but they said no. When you said to try a counter offer but only if they freeze the balance, do I have the power to do that, or do they have the power to say, "they will not freeze the balance"? If they won't freeze the balance, what do I do then? Also, what part does the judgement play in all of this? I am sending my written response to the courts this week. What happens with the judgement once the court receives my letter? What happens with the judgement while I am in negotiations with the collection lawyer? THANKS!!
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #10

    Dec 12, 2007, 11:17 AM
    This is a NEGOTIATION. You have the power to suggest or offer any settlement you want. They have the power to reject any offer you make just as you can reject any offer they make.

    If you do agree on something, get it in writing!!

    Once they see you are fighting the judgement, they may be more amenable to a settlement. Send your response to the courts and send a copy to the plaintiff with a request for verification of the debt.

    If they get a judgement they will be less amenable to a settlement since they then have the power to garnish salalry or attach assets.
    in_forsaken_hands's Avatar
    in_forsaken_hands Posts: 6, Reputation: 1
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    #11

    Dec 12, 2007, 06:58 PM
    Quote Originally Posted by ScottGem
    This is a NEGOTIATION. You have the power to suggest or offer any settlement you want. They have the power to reject any offer you make just as you can reject any offer they make.

    If you do agree on something, get it in writing!!!!!!!!!!!

    Once they see you are fighting the judgement, they may be more amenable to a settlement. Send your response to the courts and send a copy to the plaintiff with a request for verification of the debt.

    If they get a judgement they will be less amenable to a settlement since they then have the power to garnish salalry or attach assets.

    What do you mean by "fighting the judgement"? I'm agreeing that I owe them the money, I just think it's unfair that they haven't yet frozen the balance. But maybe I misunderstood what you meant. At what point in the negotiating process is the court case dropped? What happens with the courts once they receive my letter? What would be the next step?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #12

    Dec 13, 2007, 07:04 AM
    By answering the summons with your Intent to Defend you are figting the judgement. What often happens in cases where a debt has been purchased is that the purchaser doesn't get sufficient documentation. So the plaintiff is often afraid to go to court, they are looking for a default judgement where the defendant just ignores the summons. So once you show you aren't going to just let them get a judgement, they may be more amenable to settling.

    The court case is dropped ONLY when a settlement is fully agreed to.

    Your next step here is to make a counter offer and see if they accept. At the same time that you submit your Intent to Defend.
    in_forsaken_hands's Avatar
    in_forsaken_hands Posts: 6, Reputation: 1
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    #13

    Dec 13, 2007, 09:57 AM
    Quote Originally Posted by ScottGem
    By answering the summons with your Intent to Defend you are figting the judgement. What often happens in cases where a debt has been purchased is that the purchaser doesn't get sufficient documentation. So the plaintiff is often afraid to go to court, they are looking for a default judgement where the defendant just ignores the summons. So once you show you aren't going to just let them get a judgement, they may be more amenable to settling.

    The court case is dropped ONLY when a settlement is fully agreed to.

    Your next step here is to make a counter offer and see if they accept. At the same time that you submit your Intent to Defend.

    Well, I'm mailing my letter tomorrow. I am composing it today. I also plan to call the creditor today with a counter offer. I'll let you know how it goes. I really appreciate all of your input!!

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