One of the worst things that can happen to someone is to be delivered a SUMMONS!
Before you go into a PANIC MODE, here are several VERY IMPORTANT things you need to KNOW and DO if you receive a SUMMONS:
At Debt Relief NW, we get calls every week from someone who has received a summons and usually they ask the same questions:
- "Why did this happen?"
- Do I have to go to court?
- Are they going to garnish my check?
- Are they going to take money out of my bank account?
- Is there anything I can do about this?
So let me walk you through this and see if I can be of help...
I need to give my disclaimer that I am not an attorney and not given legal advice. This article only comes from my experiences of helping people deal with debt for many years.
WHY DID THIS HAPPEN?
For the sake of this article, I'm only dealing with UNSECURED DEBT and not debt like a home, car, boat, etc.
When you take out a credit card or personal loan, you are given a certain amount of purchasing power (CREDIT LIMIT) based on a lot of factors that you CREDIT REPORT reveals.
You are promising to repay the amount you charge on your account according to the terms contained in the application or contract you sign.
If you don't, then the creditor can take certain actions to recover the debt.
Usually, they start by sending you letters telling you what you already know...that your payment is late! Later, these letters start getting a little more serious in the language and tone.
You may get calls from the creditor. Yes, they have the right to call you about your delinquent account, as you gave permission when you signed up. (Remember all that "fine print"?)
They may offer you a plan to get you back on track and even a SETTLEMENT option.
But, if you are unable to do either, they may decide to CHARGE OFF your account and place or sell to a DEBT COLLECTOR.
Debt Collectors earn their fees by getting you to pay as much as they can! Period!
They train their agents to call and do everything short of violating the Fair Debt Collection Practices Act.
In some cases, they do not and here is a link to an article from the Federal Trade Commission that you should look at: FTC, Dealing with Debt and the FDCPA
If a repayment plan cannot be worked out, the debt collector may decide to take LEGAL ACTION in order to recoup money for themselves and/or their client (your creditor.
They must FILE A CLAIM in the county court where you reside.
The CLAIM will spell out (in legal terminology) that you took out the loan and didn't repay, therefore they are seeking RELIEF (JUDGMENT).
Do I have to go to court?
Although the SUMMONS reads like you do, if you read carefully, it is not.
Here is an actual example of the text from a summons one of our client's received:
YOU ARE HEREBY REQUIRED to appear and defend the Complaint filed against you in the above-entitled cause within 30 days from the date of service of this summons on you and in the case of failure to do so, for want thereof; Plaintiff will apply to the court for relief demanded in the Complaint.
It goes on to read: (the italicized words are actually in italics in the summons)
You must "appear" in this case or the other side will win automatically. To "appear" you must file with the court a legal paper called a "motion" or "answer". The "motion" or "answer" must be given to the court clerk or administrator within 30 days along with the required filing fee. It must be in proper form and have proof of service on the Plaintiff's lawyer or, if Plaintiff does not have a lawyer, proof of service upon Plaintiff. If you have questions, you should see a lawyer immediately. If you need help finding a lawyer, you may call (in this case) the Oregon State Bar's Lawyer Referral Service at (503) 684-3763 or toll-free in Oregon at (800) 452-7636.
OK, let's break this down:
Sound like you certainly have to "appear and defend" the Complaint!
But keep reading...."failure to do so..Plaintiff (plaintiff is the creditor) will apply for relief.
"Appear", "Motion", "Answer":
If you can prove, and I mean documents, etc. that clearly prove you do not owe this debt, then you can file a "Motion" or "Answer" by either hiring an attorney (remember...this is a "legal paper" to prepare it, paying the court fee and file it with the court clerk or administrator within the 30 day period.
Rarely is this necessary!
You owe the debt, didn't pay the debt, didn't work out anything with the original creditor or debt collector, so now, they have availed themselves of the legal process.
ARE THEY GOING TO GARNISH MY PAYCHECK?
CAN THEY TAKE MONEY OUT OF MY BANK ACCOUNT?
At this point in the process, there has not been a JUDGMENT awarded to the Plaintiff/Creditor.
A creditor CANNOT apply for a WRIT OF GARNISHMENT OR LEVY without having been awarded a judgment.
So, just because they FILED THE CLAIM and you received the SUMMONS, that still does not give the the legal right to GARNISH OR LEVY.
So, let's get to the all important final question most people have after receiving a summons...
IS THERE ANYTHING I CAN DO ABOUT THIS?
IT IS STILL NOT TOO LATE TO WORK OUT AN AGREEMENT WITH THE CREDITOR OR ATTORNEY TO AVOID FURTHER LEGAL ACTION!!!!!
At this stage of the "legal process", you can contact the attorney and in most cases, (depending on various circumstances and your specific situation) an agreement called a STIPULATED AGREEMENT can be negotiated.
The Plaintiff/Creditor may be willing to accept either a lump sum (sometimes a reduction from the total due) or monthly payments instead of moving forward in the legal process.
But, you cannot procrastinate...cannot ignore the summons!!!!
If you do, the Plaintiff and/or Attorney for the Plaintiff may not be willing to work with you!
Here is an actual Agreement I was able to negotiate for one of my clients recently.
PAYMENT AGREEMENT ON PENDING AGREED JUDGMENT
The Defendant and Plaintiff agree on this date: January 12, 2018
- The Defendant acknowledges that, upon default of this Payment Agreement, Judgment may enter in Clark County Superior Court in favor of the Plaintiff and against the Defendant(s), pursuant to the Agreed Judgment signed by the Defendant, in the total of $1,3 52.23, filing fees of $270.00 and a service fee of $98.00, for a total amount owing of $1,720.23, less payments made pursuant to this Payment Agreement. The Plaintiff agrees to accept and Defendant(s) agrees to pay a settlement amount of $946.56, with no interest, so long as all payments arc made timely and as agreed in accordance with this Agreement. In the event of a default in payments, the Plaintiffs agreement to accept this settlement amount will be null and void.
- Plaintiff agrees to accept payments on the settlement amount of $946.56, and not to undertake further collection efforts on the Judgment, so long as Defendant(s) makes an initial payment of $ 100.00 on or before January 28, 2018, followed by monthly payments of $100.00 or more, to be paid on or before February 28, 2018 and continuing the 28th day of each month thereafter, until the settlement amount of $946.56 owed is paid in full.
The agreement goes on to explain how and where to mail payments, etc.
But, here is what I was able to do:
- The original Credit One account had a balance (all the interest and late fees added) of $1,352.23.
- There were added filing fees and service fees of an additional $368, bringing the total due of $ 1,720.23.
- The Plaintiff (creditor) agreed to accept a total of $ 946.56, payable at $100/month without any additional interest, so long as we make the payments per the agreement.
By-the-way, each state allows interest to be charged on a judgment. In this case, the client lived in Washington, where the allowable interest would have been 12%.
- By negotiating a stipulated agreement, the client will not face any garnishment of bank levy.
- Save approximately $774.00!
- And, once the agreement is complete, a letter of satisfaction is sent to the court and the judgment is removed!
If you have received a SUMMONS, take ACTION!
and a service fee ot $98.00, for a total amount owing of $1,720.23, less payments made pursuant to this Payment Agreement. fte PlaintifT agrees to accept and Defendant(s) agrees to pay a settlement amount of $946.56, with no interest, so long as all payments arc madc iimcly and as agrccd in accordancc with this Agrccmcnt. In thc event of a dcfault in payments, thc Plaintiffs agreement to accept this settlement amount will be null and void.
- Plaintiff agrees to accept payments on the settlement amount of $946.56, and not to undertake further collection efforts on the Judgment, so long as Defendant(s) makes an initial payment of $ 100.00 on or before January 28, 2018, followed by monthly payments of $100.00 or more, to be paid on or before February 28,
2018, and continuing the 28th day of each month thereafter, until the setLlement amount of $946.56 owed is paid in full.