I am being taken to court by a law firm that bought a delinquent credit card account I had about 6 years ago.?

Question

and never paid it off. The law firm wants to garnish my wages if I go to court (I am trying to settle with them out of court). How much can they garnish my wages? I live pay check to pay check. All but about 300 dollars a month goes to things I need to live such as rent, elec., gas, phone, food, gas for car etc. Do you think if I submitted an itemized list of what my monthly expenses are to a judge he'd would allow them to take 25% of my wages? (The lawyers claim they will get 25% of my wages until it’s paid off) If they take 25% I will loose everything. To me it doesn’t make any sense that a judge would allow them to take so much of my money that it would cause me to become homeless and loose my job. If I loose my job then they don't get paid off. What should I do? Settle out of court? Or should take a chance that a judge will see that I am poor and don’t have the means to pay it off?

Answer 1

the judge will grant them at least 25 %

Answer 2

First, ignore the advice from webworm90 about offering $10 a month toward your debt. If you owe a lot (and I bet you do) then $10 is NOT a reasonable offer, and you will certainly not impress the judge.

Note that since you don't give the state you live in I can only give "general" advice.

Lets assume that this debt is still within the SOL timeframe. And the fact that they have lawyers calling you now is a good indication they are serious, so expect it to go to court.

In some states, garnishment is not even allowed (Texas for example). In others, they have more generous rules about how much they can take. Since you mention 25%, what they probably mean is they can take 25% of the "disposable" income. That is any money you have left after taxes and other deductions required by law......or 30 times the Federal Minimum Wage (about $160) whichever is greater.

Again, depending on the state....some judges have no control over how much money is garnished. It's already set by law. So once he signs the writ of garnishment you are stuck.

However, there may still be hope. Many states allow the judge to set installment payments. Once you have the judgement issued against you, fill out a "motion for installment payments". Explain your current situation to the judge, and how much you can afford.

Again, don't insult the judge by offering $10 a month. If you owe $2000 it's totally unreasonable for the creditor to wait 20 years to collect his money (plus interest). You will need to get this paid off within about 2 years minimum....so that means payment of around $100/month.

If you still think you can't handle it, you may need to seek bankruptcy. I don't know how a judgement can cost you to lose your job....but if you don't have much property or income you will qualify for a chapter 7. You need to discuss this with a qualified BK lawyer to see if it's right for your situation

Good luck

Answer 3

That's not true, the rule is on a credit judgement, if obtained by the creditor, can be UP TO 25% of the payroll check. If they have already filed a claim against you, send a letter to the judge itemizing your bills and expenses. Include everything from car maint. to laundry soap. Medications, deductable for medical insurance, etc. Show that you don't have any assets that you can sell or barrow against to pay the debt also. The collection agency/law firm is not on your side and most are unreasonable to work with. There objective is to get the most money for their client possible in the shortest period of time. As soon as they file, send a letter to the judge, show up in court prepared to prove your position with reciepts, asset information etc. Good Luck! Don't let the law firm intimitate you, it's not that bad.

Answer 4

Collection agencies say a lot of things. Given that your account is 6 years old and about to fall off your credit report if it was charged off (which it most likely was) I wouldn't put much stock in what they are telling you. The fact they are a law firm doesn't make them any more able to circumvent the rules of debt collection practices.

Please read the information at the below link regarding what they can and connot do, and can and cannot say. It appears that they are in violation of some of these rules. Such people count on the ignorance of others to get money.

I have to say that since you owe money you should pay it, and I DO NOT support people who get into debyt and try to find was to skip out on it. But more than that, I despise the vultures who try to take advantage and abuse the laws. All I will say is keep in mind that their business is to buy old debts for pennies on the dollar and try to collect on them. Many people will pay, which is how they stay in business. Your first party creditor has charged off the account and took a "settlement," as it were from this company. This third party is trying to make the money back and make a profit.

http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm

Answer 5

First you need to find out what the SOL (statute of limitations) is for your state. There's a time limit when the original creditor or collection agency can sue you for the debt you owe. In my state of Georgia, credit cards are considered open end accounts, and the SOL for these accounts is 4 years.

If you sent the law firm any form of payment, you just restarted the SOL. I hope this isn't the case. This is very important, even if the SOL has expired, there are original creditors who will try to sue you anyway. All you have to do is show up at court and tell the judge the SOL has expired (providing proof of course) on this account and the case against you will be thrown out.

Answer 6

Usually you can work something out with the law firm before going before a judge. If they insist on 25%, which you say you cannot pay, then go to a judge and insist that you are willing to pay (but unable to meet the demands of the law firm).

My advice is to get a bank loan to cover the amount you owe, as the monthly payments for that would be less then what the law firm is seeking. If you have bad credit, see if someone will co-sign.

Answer 7

The court will accept necessities of life only as your expenditures.

Other credit card bills, cable television and the like will be discarded.

When you show up in court, the judge will (most likely) ask you and the creditor to try to work out a deal before a judgment is entered. If a judgment is already entered, the judge will lower the garnishment based on your necessities of life.

Answer 8

Most states have credit card statutes of limitations that are from three to five years. Unless you live in state with longer that the time that has elapsed since your last transaction you may have a SOL defense. Your lawyer should know that. Do not admitt you owe them money and do not give them any money as this could start the start the limitations over again. Check out limitations in your state on the Internet in your state and if your debt is older since any transaction has taken place, then find a new lawyer. You should be able to find date of last transaction on yor credit re.

Answer 9

What you need to do is find out (get a worksheet online) for what can be garnished out of your paycheck. Depending on how many people in you household & your earnings, the % rate that can be taken varies. Legally in my state they can't pull you below the poverty limiations. I believe it is called a garnishment worksheet & identifies how much you can make per week & how much legally they can pull. Also just let the judge know that you have been trying to work something out with them but the amount you can afford to pay vs what they want you to pay just doesn't work for you. Normally a judge will help negociate the payment amount that you can afford.

Answer 10

Start by sending the collection a $10 payment. Tell them this is all you can afford to pay in writing. Then if they still take your court. The Judge will see that your are trying to pay them. A legit summons would be mailed to you from the sheriff office. To verify it is legit summons go to the Sheriff office. You might want to contact a combo bankruptcy/CCC attorney and possible file chapter 13. Chapter 13 and Chapter 7 will stop lawsuits. Note creditor’s cannot touch any of your Social Security benefits and your unemployment benefits.

Answer 11

Companies can buy old credit card debt for pennies on the dollar, because its assumed that they'll never be able to collect any money. My question is why/how are they going to garnish your wages if the credit card company never did. Unless you owe a substantial amount, it sounds like its more of a scare tactic. Create a schedule of how you'll payback the money and see if they'll accept it - but make sure you can really pay it back.