I've defaulted on a settlement with a creditor and been sued again. What should I do?

Question

Okay, last year I was sued over some old debt from 2 long-defunct credit cards... the debt had been bought from the credit-card company by one of those companies that does that sort of thing and then goes after the debtor on its own.

I agreed in civil court (in New York City) to pay this new creditor $200 a month of my debt until it was repaid. (Which would take about 70 months.)

I was able to pay back $1,400 in '06, but my financial situation has changed for the worse, and I haven't been able to pay anything since November.

So I'm getting sued again (the summons claims I haven't paid anything back at all (WRONG) and adds over $4000 in instant interest)... what should I do?

I won't be able to pay anything else for at least several months (housing, utilities, and food (and Internet of course!) take priority).

Is it likely that my creditor will agree to a new settlement? I can't have my bank account frozen, that would be the end of me.

Thanks for your advice.

Answer 1

I think you should contact your local consumer credit counseling service. Take all of your paperwork with you to the meeting (cancelled checks, original agreement, etc.). They should be able to give you FREE advice on how to handle this. You might end up getting an attorney out of necessity, but hopefully the CCCS can use their 'connections' to help you out. Creditors are usually more willing to work with clients of CCCS since they're more in touch with the laws, too.

Best of luck with your situation!

Answer 2

Contact them explaining the change in your finances. Perhaps they will work with you on a smaller payment plan. Getting something from you would be better than going to court. If you do nothing chances are they will garnishee your wages, if you have a job. Many businesses will not accept a garnishee and simply let you go. Good Luck