You recieved a summons, now what?
If you have past due accounts and can't afford to make any payments, sooner or later you will get a summons.
It may be delivered by a police officer or someone else, but regardless, it is not a pleasant experience.
What should you do?
DO NOT IGNORE THE SUMMONS!
For the sake of this article, we're taking about unsecured debts such as:
- Credit cards
- Personal loans
- Medical bills
- Personal line of credit
- Store cards, etc.
When a creditor cannot get a consumer to pay as agreed and attempts to work out a plan or even after collector intimidation (you know...10 phone calls a day!), they may choose to start legal action in order to collect the debt.
A CLAIM will be filed in the county court where you reside.
Then, you will receive a SUMMONS. This is usually hand delivered.
The summons will state something to the effect that you have 20 or 30 days after receipt of the summons to APPEAR IN COURT TO ANSWER THE CLAIM.
That means that if you wish to dispute the validity of the claim, you can follow your county's court procedure to give an ANSWER TO THE CLAIM.
The answer is your side of the story if you feel you do not owe the amount of the claim.
Now, just because you don't like the additional interest, late fees and now court costs that have been added to the claim doesn't matter!
So, if you owe the debt, there is no reason to spend the time or money for an answer and NO, YOU DO NOT NEED TO GO TO COURT.
OK, NOW WHAT?
FIRST DON'T PANIC!
- You are not going to jail
- You most likely will not go to court
- Since we're talking about unsecured debt, no one is going to take your personal property
- Your not going to have to sell your home, car, boat, etc.
The creditor is hoping that you will call them and make arrangements for full repayment of the debt (plus all the interest, fees and costs) as you are afraid.
AFRAID OF WHAT?
If an arrangement or agreement cannot be reached, the creditor or PLAINTIFF, will be awarded the JUDGMENT.
With a judgment entered in favor of the plaintiff, they can now seek to:
- Garnish your wages or
- Levy you bank account
CONTACT THE CREDITOR OR ATTORNEY FOR THE CREDITOR!
If you are employed (not necessarily self-employed) and receive normal W-2 wages, then you must try to work out a repayment plan so that they don't proceed with a writ of garnishment.
Most of the time the creditor or attorney will agree to a STIPULATED AGREEMENT OR JUDGMENT.
This says that if you make $XX.00 payments for some many months they will not continue with legal action.
If you get an agreement, MAKE SURE YOU GET IT IN WRITING!
You most likely will make a "check-by-phone" arrangement whereby they take the monthly payment directly from your checking account, so keep good records.
If you have access to make a one-time or lump-sum payment for 60%-80% of the balance, the creditor may accept that and remove the judgment.
Again, if you arrange this, GET IT IN WRITING!
BUT WHAT IF YOU ARE UNEMPLOYED, SELF EMPLOYED OR RETIRED?
Certain forms of income are exempt from wage garnishment:
- Unemployment income
- Social Security or Pension income
- Disability income
- Child support
- And in most states, net income
For more information about wage garnishment, visit: US DEPARTMENT OF LABOR.
If all of this is a little intimidating, we can help!