credit card debt collectors ... suing !! what to do ??

**bjl584** · 10-26-2012, 10:35 AM

If they sue you and win (which they most likely will) a judgement will be levied against you. Meaning that anytime your credit report is pulled those outstanding debts will show up on there. Your score will be trashed and any loan that you are able to get will be at a crazy high interest rate. It would be to your benefit to get them paid off as soon as possible.

I think that you have a misconception that you will need to come up with the money as soon as the judgement is levied against you. That isn't the case. In certain states your wages can be garnished to pay back the money. They can't do that where I live, but I don't know where you live, so you will have to look into it.

**kristinxmarie** · 10-26-2012, 10:48 AM

My score is already trash, I had it pulled about 6 months ago when my old roommate and I were looking to rent a bigger house, it was a 483 at that point.

I'm in Arizona, and I know that they can do wage garnishments here. I believe it's 25%, but I'll need to look that up again. I'm worried about going that direction too though because if that happens then I won't be able to afford my apartment which puts me into an even worse position, which is why I was considering the bankruptcy option.

**bjl584** · 10-26-2012, 11:01 AM

How far along is your case? It may be too late to negotiate, but it's worth a try.

Many on here will say bankruptcy should be a last option when all other avenues have been exhausted. You owe $9000, or at least that's the amount that you are being sued for. I work a part time job about 20 hours a week and I made around $11,000 last year at it. I'd much rather see you pick up extra work if at all possible than to file bankruptcy.

**snafu** · 10-26-2012, 07:04 PM

kristixnmarie your situation is likely more serious than you realize. At some point you'll graduate seeking full time employment in your chosen field. Problem is employers are now routinely checking credit records and will often select another candidate when they would have preferred you but for your poor credit score. I'm guessing that filing for bankruptcy, if you can come up with costs up front, will make your situation even worse.

It is important to do whatever it takes to negotiate a payment schedule and clean up old debts. You may be temporarily lowering your standard of living short term to reach your long term goals.

**Wino** · 10-26-2012, 08:48 PM

You have let this go too long and too far. The judge is going to ask two questions only: Is this debt legally acquired? Did you enter in to this agreement freely? As it is almost certain the answer to both questions is "yes," then you owe the debt and the judgment will be in the collectors' favor.

A quick web search: "Wages and eamings are garnishable: (A.R.S �12-1598 et seq.). �12-1598 (4) defines "Earnings" broadly to include all forms of compensation. 25% of the statutory net disposable earnings of debtor. Court may reduce to as low as 15%."

So, if you go to the hearing, you should be prepared to help the judge determine the amount you will have garnished. I suggest you read this link Arizona Garnishment Self-service

Your best bet is to know the numbers walking in, and be upfront with the judge. "I owe the money. I am not here to avoid payment. I have several debts I have to discharge. I have this worksheet to show how I can best pay off the creditors with my income and within the laws of Arizona."

Look up a non-profit credit counseling service after reading the above link, and after calculating your non-exempt income. If you spend some time now, it is possible to show a true plan for paying the debt within your means. This is the only way possible for you to forestall the suit if it has already been filed. The creditors want their money. You need to come up with a way to pay it. By your credit score, you've made no real effort to pay until now. Binding contracts, such as a judgment, may be the only way the creditors see to get your to pay your legal obligations.

Again, see a credit counseling service after you write down some numbers from the form mentioned in the link.

**joshuaking** · 10-27-2012, 07:32 AM

As previous posters have stated, most of these cases in court are won by the debt collectors. However, a big reason for this is most consumers don't file any defense and the collectors receive a default judgement.

So...do some research. File an answer with the court. Some possible defenses to this include:

Statue of Limitations. What is the SOL in your state for credit card debt? Arizona I believe used to be 3 years but is now 6 years. However, debts that were owed before the change over remain at the 3 year limit.

Also, how did the collector get title to the debt? Is there a clear chain of command from original debtor to the current collector? Is the total amount due correct? What fees have they added? Are these fees legal? Is the collector licensed to collect debts in your state of residence?

All of these potential defenses could help you win a case or at the least significantly reduce the amount the collection agency can collect from you. They will also give you some negotiating leverage in what they accept from you as payment in full, and the terms in which they will allow you to pay. Remember to get everything in writing.

I agree with some of the above posters-if you can avoid bankruptcy over this debt that would be a good thing. With some research and some negotiation you could be able to get this debt managed and taken care of.

Best to you,
Josh

**wolfy** · 10-27-2012, 08:19 AM

I would generally agree with the other posters to avoid bankruptcy. However, in this case I personally think you should look at it. My reason is this. Your credit score is already trashed so there isn�t much more damage. Since it sounds like you don�t have a lot of assets there isn�t much there for you to lose in bankruptcy. A bankruptcy will generally stay on your credit report for 7 to 10 years. I believe in Arizona, a judgement can be renewed every few years so it could stay on your credit report for a lot longer than 7 to 10 years doing a lot more damage. Also employer�s, do look at credit reports, but as long as you are honest about the financial issues some may not care, and some don�t care if you are not handling any kind of financial or sensitive information.

According to your original post the amount owed at collections is around $25,000 but you are only being sued for $9000 so far. What about the other $16000, are you paying on that or will you be sued for that also. That is something else to think about, when you are considering your options.

Talk to a credit counselor and see what they have to say about your options.

**disneysteve** · 10-27-2012, 09:05 AM

Originally posted by wolfy View Post

Since it sounds like you don�t have a lot of assets there isn�t much there for you to lose in bankruptcy.

If you have no assets, what's the point of filing bankruptcy? What exactly are you protecting? They can sue you all they want but if you have no money, they aren't going to get anything. Why go through the time and expense of filing when it is already clear that you can't pay what you owe?

**Petunia 100** · 10-28-2012, 08:05 AM

Originally posted by disneysteve View Post

If you have no assets, what's the point of filing bankruptcy? What exactly are you protecting? They can sue you all they want but if you have no money, they aren't going to get anything. Why go through the time and expense of filing when it is already clear that you can't pay what you owe?

She'd be protecting her paychecks from garnishment. Sometimes, losing 25% of net disposable earnings makes it very difficult for people to pay for basic necessities.

KristinMarie, how much is your net pay each month? Is $250 per month less, more, or about the same as 25% of your net pay? Are there any optional deductions coming out of your paychecks?

**disneysteve** · 10-28-2012, 10:38 AM

Originally posted by Petunia 100 View Post

She'd be protecting her paychecks from garnishment.

Gotcha.

**kristinxmarie** · 10-28-2012, 12:35 PM

my net pay monthly is 1700 .... so 25% of that is 425...

here's my monthly expenses for a more accurate picture..

rent = 635
water = 20
electric = 50
car insurance = 65
phone/internet = 80
gas = 200
groceries = 200

total monthly expenses = 1250

i figured if i put 250-300 toward my debt each month that still leaves me with a $200/month ($50/week) cushion for any unexpected things that may come up, as well as a little for savings and entertainment.

**Gailete** · 11-01-2012, 07:09 AM

I think in a situation like this that there is more to look at than just what to do right now. You are awful young to have that much debt, nothing to show for it and if you are in school I suspect school loans eventually to pay off as well? You need to take a long hard look at your spending habits, your income and outgo, etc. You say when you get caught up you will be able to pay $250 a month and you want

leaves me with a $200/month ($50/week) cushion for any unexpected things that may come up, as well as a little for savings and entertainment.

Skip the entertainment! You can't afford it period. Find free entertainment or spend the time on a part time job to help pay off those bills. I realize that not all would agree, but taking bankruptcy as a way to handle bills that you made is not the way out. Why haven't you been paying on them in the meantime? It sounds like you have just ignored your bills to this point and are scared now. How did you expect those charges to get paid when you made them? I know you realize NOW that you are in a bad place, but the only way to effect real change in your spending habits is to do the hard work of paying off your bills as it is the moral, ethical thing to do. That means slashing costs to the bone, getting another roommate if at all possible, Do whatever it takes to to slash and pay off ALL your bills, not just the ones that are coming after you currently as the other 16K needs paid off as well. After you do the work of paying off these bills, you will never want to pick up a credit card again.

I had a friend that filed for bankruptcy. When she was done she had no usable credit cards and our work involved overnight stays at hotels and lots of driving. Both got reimbursed but it took a few weeks. Since she didn't have her own card, her sister loaned her one of her's. In no time flat (less than 2 months I believe) she had maxed out her sister's card as well. You see she hadn't done the hard work to pay off her bills and so she had no trouble using a credit card again. She even spent the cash that had been collected for the boss's Christmas present! She had volunteered to go buy it, but she spent the money instead. It made for a not very happy office! She was addicted to spending. Until that is under control, filing for bankruptcy isn't going to do any good at all. It is like sticking a bandage on the Grand Canyon to try to bring the edges back together. It just doesn't work.

I wish you success, but know tha for a long time you can't afford new clothes, going out to anything that costs money, etc. It will be a shock to your system, but evenetually you will be glad that you took the high road in dealing with this.

**BMEPhDinCO** · 11-01-2012, 07:57 AM

Originally posted by kristinxmarie View Post

my net pay monthly is 1700 .... so 25% of that is 425...

here's my monthly expenses for a more accurate picture..

rent = 635
water = 20
electric = 50
car insurance = 65
phone/internet = 80
gas = 200
groceries = 200

total monthly expenses = 1250

i figured if i put 250-300 toward my debt each month that still leaves me with a $200/month ($50/week) cushion for any unexpected things that may come up, as well as a little for savings and entertainment.

You need to get rid of the phone and internet if possible. Go to a prepaid, emergency only cell ($20 a month, at most) and use the library or school for internet (I paid $15 a month for a phone line and dial-up when in school, it was slow but cheap). You need to cut back on gas if possible - drive to work, school, home. Groceries once a week. And finally, as mentioned, that $50 a week is NOT something you can afford right now. Give yourself $50 a month. The rest goes to the debt.

Consider getting a second job as well - even showing you are attempting to improve the situation will help with your predicament. If you can put $450 a month toward the debt, that will help quite a bit (4 months for one loan to be paid, with minimums on the others, and so forth).

**kalikala1980** · 11-01-2012, 06:22 PM

I would try and see if you could work out a payment plan with the creditors. Since two of them have already sued you, unless you respond to their lawsuit, you will have a judgment entered against you. I live in California so I'm not sure about wage garnishment in Arizona but in California, the creditors have to go through a process to enforce the judgment to garnish any wages. Also, as far a potential employer conducting credit checks, here in California a law was recently passed that an employer cannot use a credit report (there are exceptions say if you are going to work in a bank) for purposes of deciding to hire you or not. You might want to check to see if Arizona has a similiar law.

credit card debt collectors ... suing !! what to do ??