How to Prevent a Summons and What to Do If You Get Served

"I don't understand why I received a summons!"

"I never received anything about this!  

"What can I do about it?"

I have been helping people deal with all of the problems of credit card and other unsecured debt for over 15 years, and I get calls like this almost every week!




If you have ever had someone come to your home, office or received a registered letter with a summons, you know how stressful this is.




To prevent this from happening, you need to understand how the debt collection process works and what you need to do to stop a summons before it ever gets started.

What happens if you cannot keep up with the minimum payments required by you credit accounts?

Remember, I'm writing about unsecured debts, such as:

  • Credit Cards
  • Personal loans or lines of credit
  • Store Cards
  • Medical Bills
  • Utility Bills
  • Private Student Loans
  • Pay-Day type loans

OK, let's say that you have gone through, or are going through a financial hardship due to one of many situations beyond your control...

  • Loss of employment
  • Divorce
  • Death of spouse or partner
  • Medical (accident or illness)
  • Disability
  • Retirement Income too little/fixed

Most of their stories goes something like this (I'll bet this is close to yours!):


After our divorce, I tried to keep up with the credit cards that I was left with, but without my ex's income, I just couldn't. 

For the first few months, I would just pay the minimum payment on all of the larger balances and let the smaller ones go.

, I tried taking a "cash advance" on one of the cards that still had a little bit of credit left on it to pay something towards the others.

I knew I was in big trouble, but felt hopeless...there was nothing I could do!

After a while, I had to make decisions like whether to pay the utility bill or the Visa bill.

Of course, the utility bill had to be paid.  It's winter and cold!

I even had to use the last credit card (with any "credit limit" left) to buy groceries once in awhile!

I finally stopped paying on most of the cards but one, hoping that something would happen and I could get caught up on the others one day.

I started getting phone calls....lots of phone calls and letters.

I tried explaining my situation a couple of times, but the agent didn't seem to care.  All she wanted was for me to send something right away!

Finally, I just stopped answering the calls or the messages.

The letters started saying that unless I contacted them immediately, they were going to "charge off" my account and it might be turned over to an attorney for collection. (That was scary!)

After a few months, the calls slowed down or stopped from the original creditors, and now they were coming from debt collectors.

The letters from the Collection Agencies, were offering to work with me, but I just didn't have enough to make ends meet.

So, I just threw the letters away.

One evening, the doorbell rang and a man handed me an envelope and said, "You've been served."  (Kind of like in the movies.)

The Summons said something like (I was too upset to really read it carefully) I was now a defendant in a lawsuit.

The Plaintiff  was the Visa Card/Store Card.

It seem to say that I had to go to court ("appear") in 30 days or that a judgment would be awarded to the Plaintiff.

I found out that the "Appear" really meant that if I wanted to argue or explain why I didn't owe the debt, I had 30 days to send an "Answer" to the court.

The "Answer" had to be legally correct and would most likely need to be prepared by an attorney (how much would that cost?) and there would be a filing fee on top of that!

I knew I owed the debt, but couldn't do anything about it.



OK, let me stop there...

I'll address that last phrase..."I just ignored the summons" later.

When you don't or can't pay the minimum payments due on your credit cards, the creditor can call and write seeking payment.

As long as the account is still with the original creditor, they have the right to call.  But, when it is transferred or sold to a collection agency, you can put a stop to the calls:

STOP Collection Calls Free Sample Letter

In this hypothetical case (although very, very common), let's see what this person did wrong and what should have happened.

When you sign up for and are approved for a credit account, you are promising to repay what you borrow/charge plus interest and fees.

So, when you don't, the creditor has a right to "legally" attempt to get you to pay.

In this article, I'm not going to get into the "legal" vs. "illegal" actions some debt collectors take, but have written several blogs you might find helpful.


What Debt Collector Can and Cannot Do


One of the most commons mistakes someone makes is to use one credit card to pay on another.

I believe it is illegal, but regardless, you should never do this!  You are just compounding the problem.

If you have equity in your home, you may (and I'm not a big fan of this) want  to see if it would be possible to either consolidate all of your credit card debt with a home equity loan or line of credit.

The danger is that so many people do this, add years and increase the balance of the mortgage and then, charge up the cards again! 


Paying on one card and not the others, may help keep that particular account open, but in the long run, your're not helping yourself.

Here's the first and most important step:

As soon as you know you are in serious financial trouble, it's time to get very honest with yourself and find out exactly where you stand.

You need to do a complete (honest...every dime in and out) budget.

This will tell you the truth and help you decide on a possible solution.

Budget Worksheet FREE Download here!

If you have some money left over at the end of the month, you have a couple of options:

Debt Management or Debt Settlement

I'll get into detail a little later.

If you don't have any money left over at the end of the month, then it's time to consider:

Bankruptcy Protection from your creditors!

I think Bankruptcy should be your last and only option after you try other programs.


OK, let's say you have some money left over at the end of the month...

What can you do?


Briefly (see link above for details), a Debt Management Program (used to be referred to as Credit Counseling) is a program whereby each of your creditors agree to lower interest rates and sometimes waive fees for a set amount of monthly payment for a set amount of time.

As long as you keep up, they will not take any more collection options.

But, the problem with this type of program is that the monthly payment is not much lower (if at all) than the total of all of your previous minimum monthly payments!

If this is the case, then a Debt Settlement Program may be the answer.

A Debt Settlement Program is for people who have (or are about to have) accounts in collections.

Rather than make payments to the creditors or debt collectors, you will deposit an amount (that you can afford after completing the budget), into a FDIC Insured bank account to be used to offer settlements on you debts.

Debt Collectors and Debt Buyers may take 50% or less to settle old debts.

Once they are all settled, your credit report will start to improve.  

Here's a few examples of settlements we have negotiated for our clients:

Recent Settlements See what we have  done for our clients!


OK, that's what this person should have done, but didn't...


Even after you receive a SUMMONS, you may be able to negotiate an agreement whereby you pay back what you owe in monthly payments you an afford.

The Plaintiff will most likely move to obtain a DEFAULT JUDGMENT and it will be filed with the court.

But, if they agree, a STIPULATED AGREEMENT (repayment plan) will be filed also.

This basically says that as long as you make your payments on time and the amount agreed upon, they will not take any legal options to collect, such as:

  • Wage Garnishment, or
  • Bank Levy

If you already have a garnishment or bank levy, you still may be able to negotiate an agreement to stop these, but it's not easy.

The point is...

You may be able to prevent a summons, but if you do receive one, please....



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Received a 1099-C...Now What?

Around tax time, many people receive a 1099-C form and usually do not know what to do about it.

Here is some very important information on not only why you received it, but what to do about it:




You need to understand:

  • Why you received the 1099-C.
  • Why you cannot ignore.
  • If you will have have to pay more tax
  • How to file with your tax return.



Anytime a creditor accepts less than the full balance due and the "forgiven" amount (the difference between the actual balance and the amount you paid) is greater than $600, the creditor most likely will report it to the IRS.

I said "most likely" because not all creditors will report a settlement/forgiveness.

If they do, then you will receive an IRS Form 1099-C that shows the creditor, the amount given and some general instructions on what to do.

Of course, typically with the IRS, the form is somewhat vague and not very clear as to what you need to do.

So, let's walk through this....


If you cannot make the required minimum payments on your credit cards or other unsecured debts, after a certain amount of time (usually 3-4 months) the creditor may sell or transfer the debt to a debt collection agency.

The original creditor will most likely write the balance off as a loss (to offset their tax reporting) and usually sell the debt at "pennies on the dollar".

Let's say that the debt collector/debt buyer bought your Visa Card debt of $5,000 for $500...(yep, the get these very, very cheaply!)

Now, you start getting calls and letters from the debt collector saying you owe the $5,000 to them (even thought they only paid $500).  Starting to get the point?

Oh, by-the-way, once the account has been sold or transferred from the original creditor, you can put a stop to the phone calls:

STOP Collection Calls Free Sample Letter

But, even though you stop the calls, the amount you owe still remains!

Depending on your specific circumstances you may have gone through or are going through, the debt collector/buyer may be willing to accept a SETTLEMENT.

A settlement is an agreement to accept less than the full amount to satisfy the debt, usually saving you 40%-60%.

Recent Settlements See what we have  done for our clients!

The difference between the balance owed and the amount accepted as a settlement is called a "FORGIVEN" amount by the IRS, and as I said before, you most likely will received a 1099-C form because of it.




We get calls from clients all the time who received the 1099-C, ignored it, filed their income taxes as usual, and then, a few months later, start getting letters from the IRS saying they own more money plus penalties and interest!

And, even though you can file an amended return in hopes of getting this taken care of, it is a lengthy, time consuming process now.

The time to deal with the 1099-C is now....not later!


Just because you receive a 1099-C doesn't necessarily mean that you will have to pay more tax.


Let's say that the Visa Card that had a balance of $5,000 and was sold to XYZ Collectors, was ultimately settled for $2,000.

Good deal!, you just saved $3,000!

Well, that's true, but, the IRS looks at it as if you had received $5,000 of goods and services, but only paid $2,000, so you had an additional $3,000 added back to your gross income for that year.

Now your total adjusted net income (the amount you will have to pay tax on after all deductions and credits are deducted from your gross income) is increased by $3,000.

If the TAX RATE (the percentage of the adjusted net income) was 20%, then you would owe an additional $3,000 x 20% or $600 more tax! (not including penalties and interest!).

But, if you had read the fine print of the 1099-C you received, it said that (paraphrasing here) that...

 you may be EXEMPT if you were INSOLVENT at the time of the FORGIVENESS.


What does "INSOLVENT" mean and how do you show or prove to the IRS that you were? 


How do you file with the IRS?


You must provide the IRS with a little information and the proper forms (specifically IRS Form 982).

Basically, you are going to show that at the time of forgiveness (the settlement) you had more LIABILITIES (debt owed) than your ASSETS (all equity, bank accounts, etc.)

If this is the case, then you DO NOT have to include the FORGIVEN amount as additional income and therefore, and will not have to pay any additional tax!

But, you have to provide/include the proper documentation and form with your tax return.


Don't be surprised if your tax-preparer doesn't know what to do with the 1099-C and don't "just pay the extra tax" as a result!!!


Just click below, follow the instructions:




FREE  Debt Elimination Summary





Tags: secured credit card, 1099-C, IRS, tax on forgiveness of debt, settlement

Debt Collectors and Your Rights!

If you have credit accounts that have been turned over to debt collectors, you know what it is like to be harassed by calls and letters!  You don't have to put up with it, if YOU KNOW YOUR RIGHTS!



The debt collection industry exits for the sole purpose of  assisting creditors with collecting on unpaid debt that is legitimately owed by a consumer. 

However, many debt collection companies will purchase debt from creditors or other debt vendors in and attempt to collect for huge profits! These guys by up huge blocks of "debt" at pennies on the dollar.

Although I don't fault anyone or any company trying to make a profit, I do take serious issue with debt collection companies that prey on consumer's fear and lack of knowledge.

The Fair Debt Collection Practices Act (FDCPA) was passed to not only protect consumers from debt collectors, but to also inform the consumer of his/her rights.

The Federal Trade Commission is an agency of the United States Government that was formed to protect consumers rights and to enforce violations.  The FTC has published a short, yet very informative article that you should download and read carefully.  To get you copy, click here:

Federal Trade Commission...Facts for Consumers

Although I recommend that you download the above information, here is a brief summary of what the law limits what a debt collector can and cannot do:


  • Call you before 8 am or after 9 pm (in your time zone)
  • Use an automated dialer to call many, many times a day.
  • Call you at your place of employment after you have verbally requested that they not call you there.
  • Harass or abuse you by using threats of violence or harm as well as using obscene language.
  • Falsely imply that you have committed a crime and will be prosecuted.
  • Threaten that they will seize or garnish your property, income or bank account unless they intend to do so within a reasonable amount of time or have already obtained a judgment.
  • Call your friends, family or co-workers and discuss your debt.  They may contact others, but only to attempt to get or confirm your contact information.
  • Use "official" government looking stationery trying to represent that they represent the government or agency.

If you think that your rights have been violated, you should file a complaint:

You can file a complaint with the Federal Trade Commission  Here is a link to that site:

FTC Complaint Assistant

You can contact your state's attorney general's office and file a complaint.  Just do a "Google search" for your state's attorney genera's site. 

For example, here in Oregon, you would go to:

State of Oregon Consumer Complaint Form

If that doesn't help, there are numerous attorneys that specialize in defending consumer's rights that have been violated by debt collectors. 

Let's look at some of the most common violations:

One of the most annoying practices used by debt collectors is to call you several times a day or week! 

Fortunately, you can put a stop to these calls!  Here is a link that will tell you what to do:

STOP Collection Calls Free Sample Letter

 I've been assisting our clients on how to deal with debt collectors for over 15 years and although most operate within the FDCPA law, some will not.

Most people who are dealing with debt collectors have gotten themselves into financial trouble due to one of several circumstances, such as:

  • Loss of employment or reduced income
  • Retired living on fixed income
  • Divorce
  • Death of spouse or partner
  • Illness or disability


When one or more of the things happen to you (or someone you know), then it is common to use the easily available credit to "make ends meet".

I would say the 95% of our clients over the years got themselves into credit card trouble like this!

They fully intended to repay all their debt, but life and circumstances beyond their control just wouldn't let them.

Now, they found themselves in such a financial mess that they could not even keep up with all of the minimum payments due.

I have some GOOD NEWS!!!

Once your accounts are sold or turned over to debt collectors, the may be willing to accept an amount less than the full balance to satisfy the debt.

This is called a "settlement".  We do this for our clients every day. 

Here's what a settlement looks like:

Recent Settlements See what we have  done for our clients!


  • Don't let debt collectors intimidate you!
  • Know your rights and stand up!
  • Use debt settlement to get a fresh start!

We have been helping people like you since 2003 and would be glad to see if we could help.  For a FREE CONSULTATION, just click below:

FREE  Debt Elimination Summary


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Tags: illegal debt collection pracitces

Help! I Received a Summons! Now What?

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


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.






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...



Good news...


 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.


The Defendant and Plaintiff agree on this date: January 12, 2018

  1. 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.
  1. 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%.

Bottom line...

  • 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! 

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         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.

  1. 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.







Debt Settlement Kept Us Out of Bankruptcy!



Several years ago, my wife and I faced one of the darkest times of our lives.  Although we were in a financial mess, we found a way to work through it.

Hopefully, our story may help someone else. 

Here goes...

I never dreamed that I would ever be in a situation where I could not pay my bills!

With a good job that paid me a better than average income and my wife earning a good salary as well, we were  living the "good life", until.....

Our lives dramatically changed!

I had been working for the same company for about 10 years, was in charge of a large area of the country, and my sales and sales team usually led the company.

This meant that I was getting a nice bonus each year as well as my large salary!

Like I said, "Life was good!"

Although I had heard the rumors about a possible sale of the company to a larger competitor, I was told "Don't worry, even if this happens, you'll be OK".


One afternoon, my supervisor called me into his office and I could tell that something was up.

After a few minutes of chit-chat, he finally came out with it and let me know that the sale was going to happen, and that the new company was going to terminate my position and replace me and my team with their own people!

I just stood shock, thinking...


            "What was I going to do?"



So, here I was:


  • Unemployed (for the first time in my life!)
  • Have a mortgage (nice, large home!)
  • Family (2 kids, ages 8 and 10)
  • A little over 40
  • No real job prospects in a bad economy!


I knew I was in trouble and I was starting to panic!





I sent out dozens of resumes and went on several interviews, but no luck.

One night, my wife and sat down and completed a "Home Budget Worksheet".

Even though I kinda had an idea of what came in and what went out, I really hadn't ever taken the time to track it carefully. 

After all, we were making great money and really had nothing to worry about.

Boy, was I shocked to see the real numbers!

We found out that we were spending a lot of money on things we really didn't have to have, such as:

  • Starbucks coffee
  • Athletic club membership (that I rarely used)
  • Internet and TV Service that included about 1,000 shows and channels we rarely watched!
  • Going out to dinner a couple of times a week
  • You get the picture...

And then....

The hot water heater stopped working.  

The plumber said that there was nothing he could do to repair it as it was just too old.

With our savings just about gone, I had to use one of my credit cards to buy a new one and pay for the installation.  

Even though the total was about $1,000, it really only increased my minimum monthly payment by $25 or so.

And the spriral started...

With no one willing to hire me at anywhere close to what I was earning before, I finally had to take a job at just a little over minimum wage.  

It was better than nothing, but the final take home pay was just not enough to cover everything.

I was really beginning to stress out!





We had no choice but to pay only the absolute essential bills like the mortgage, utilities, groceries, etc. and let the credit card bills, medical bills, and yes, even the car payment get behind. 

I mean, what else could we do?

Sure, there was a little equity in our home, but with our bad credit rating, we wouldn't qualify for a second mortgage or refinance.

Over time, I had to use the cards to make up the shortage we faced each month.

As the total credit card debt was increasing due to late fees and over-the-limit fees, we had to use a CASH ADVANCE once in a while just to pay a utility bill or buy groceries!

The crazy thing was, even though we hadn't made a payment in 3-4 months, and were getting nasty letters from our creditors, we would still get an OFFER from a credit card company for another card or to consolidate all the others with a BALANCE TRANSFER!

We actually had three cards from one company!  Made no sense!

Sure, this "rob Peter to pay Paul" action was holding them off, but we knew that a"day of reckoning was coming!"



One evening, after the kids were asleep, we sat down at the kitchen table and took a long, honest look at our situation.

There just wasn't enough money to cover all of our expenses and bills.


It looked like BANKRUPTCY was our only option.


As we discussed this, my wife told me that she had a friend who had gone through a similar financial situation and had prevented choosing bankruptcy by going through a Debt Settlement Program.

I called the company she had used, but after a few minutes talking to the rep on the phone, I just didn't have a good feeling.

It seemed that all he wanted to do was to get us to "sign up" right away and that he really wasn't listening to our particular situation.


Tried the DIY method to negotiate settlements


I tried to contact the debt collectors myself, but soon learned that they did not care about our situation and were not very sympathetic and usually very rude.

Sure, they were willing to settle the account for a little less than the full balance, but they wanted the money in a lump sum!

I lost my temper and told one guy, " You %%#@*&^%, if I had that kind of money, I wouldn't be in this situation!"  He seemed as if he could care less.

I was angry and embarrassed!




After several frustrating attempts like this, I went online and checked out a couple of debt settlement company's Better Business Bureau reports.

There weren't very many that were accredited and had an A+ rating with no complaints!

It was very evident that not all debt settlement companies were the same!

Since they all seemed to offer the same services, we decided to narrow the field by using the following tests....



After calling a few, we decided to go with a company that seemed to meet the criteria we wanted.




Once we enrolled, the first thing they did was to put a stop to those annoying and basically harassing calls from the collectors!

I can't tell you how great it was to have someone "in our corner" now!

We had stopped sending payments to the creditors (just didn't have the money!)for about the last 3 or 4 months and some of our accounts had already been turned over to a Debt Collector.

We started making monthly deposits (what little we our budget would allow) into an FDIC insured account for future settlements.

This monthly deposit was a little less than half of what the total minimum payments would have been, so this really helped!


Over time, the company was able to settle each of our debts!


Some of them were settled at less than 50%, saving us a lot of money!

I really appreciated the service we received.  It helped calm us during the whole process.

Well, it took about 4 years to get all of our debts settled (we had enrolled about $40,000 of various unsecured debts), but it was well worth it.

When we had questions or concerns, we were always able to talk to our representative and/or the negotiator.

Not only did we save thousands of dollars through the settlements, our CREDIT SCORES started to improve!


Here we are, still in our home, no creditors calling, all of our credit cards have a $0 balance (we actually cut them all up!) and we FEEL GREAT!

Even though we could have, we are very glad we didn't turn to Bankruptcy Protection.

Hope this has been helpful!


Debt Settlement is not for everyone, but for us, it worked better than we expected:

FREE  Debt Elimination Summary



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Tags: Credit Score, Bankruptcy, debt collectors, debt free, Best Debt Settlement Companies, credit cards

What Should You Expect From a Debt Settlement Program?

Trying to decide if you should enroll in a Debt Settlement Program?


Debt Settlement is an option that few people know about.

Did you know that given the right circumstances, most lenders will eventually accept an  amount that much less than the full amount to clear an old account from their books!

I'm talking about unsecured debts like:

  • credit cards
  • personal bank loans
  • medical bills
  • store cards
  • "pay-day" type loans
  • and others

Now, although I've been helping people settle debts such as these for many years, and know that it can really help, not everyone should enroll in a debt settlement program.


Let say you find yourself with $10,000, $20,000, $30,000 or more of unsecured debts and although you are making the minimum payments each month, you are just not seeing the balances reduced due to high interest rates and fees, a DEBT MANAGEMENT PROGRAM may be (notice..."may be") what you need.

You can check out my link above for full details of how a Debt Management Program works, but basically{

  • Each of your creditors agrees to lower the interest rate and in many cases stop or forgive late or over the limit fees.
  • You will make one payment that is about the same (and sometimes a little more) to the company and they will pay each of your creditors according to the agreements.
  • This type of program usually take about 48 months and according to the Fair Isaac Corporation (FICO), being enrolled in a debt management program is NOT a factor in determining your credit score.

But, what if you have a considerable amount of unsecured debt and are just not able to keep up with the minimum payments and cannot afford the required payment of a Debt Management Program?

Many people will seek the help of a bankruptcy attorney, but that is not always the best option.  Yes, bankruptcy is a viable option, but in my opinion, should only be used when you have exhausted every other option!


So, how does a Debt Settlement Program work?


Instead of making any payments to your creditors, you will set aside an amount of money (your budget will allow) into a Settlement Account with an FDIC insured bank.

Of course, since you are not making monthly payments to your original creditors, they will eventually be turned over to a debt collection company.

Negotiations will begin and a settlement agreement will be arranged.  This agreement MUST be in writing and no payments should or will be made without it!

Most debt collectors will be open to a settlement.

Recent Settlements See what we have  done for our clients!


So, what should you look for in a Debt Settlement Company?

  • How long has the company been in business?
  • Are they registered?
  • A+ rateing and accredited with the Better Business Bureau?
  • Does this company have a lot of complaints?  If so, BEWARE!
  • Does the agent really listen, ask a lot of questions to determine what type of help you really need?  Or, does it seem like you are trying to be pressured into signing up right away?
  • Oh, and by-the-way, the counsultations should all be FREE!
  • Are there referrals or testimonials from formet clients?
  • What about seeing some actural settlements



Dealing with the stress of a financial hardship requires information and help.

A qualified Debt Settlement Company may be just what you need, but you need to do a little homework first!

Debt Elimination Summary



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Tags: debt settlement, Bankruptcy, credit card, Best Debt Settlement Companies, BBB

Debt Settlement...How Does it Work?

Given the right circumstances, a Debt Settlement Program is an option that can give you freedom from debt!  

Here's how a debt settlement program works:


Let's face it, credit and credit cards are something most people deal with every day.   

You know how that can go....

You get an offer for a credit card with 0% and fees (for 6 to 12 months at least).  All you have to do is fill out the form and submit.  


At first, you use the card to buy some items that may be just a little bit too expensive for you you right now, but, with a minimum payment of only $50 or so,why not?

But, you get another offer (or two, or three, or four...) and you figure:

"I can afford a $200 or so each month...Why not?"

I actually took this picture...kinda says it all:


Sure, you can afford the total minimum payments due each month of about $200.

But what happens if one of the following happens (as has done with most of my clients):

  • Loss of Employment
  • Divorce
  • Major injury or illness
  • Total Disability
  • Death of Spouse or Partner
  • Too little fixed income after retirement!

Just to name a few!

Pretty soon, you just can't keep up with all the payments due (beside the mortgage or rent, utilities, groceries, etc.)


When your cannot keep up with the minimum payments, it doesn't take long to realize that you are in trouble!!!  

A lot of people start taking cash advances from one card to make the payments on the others.  This is just putting off the inevitable!

You may be able to take out a second mortgage, but this has dangers as well.  Be very careful here!

Please don't be fooled into getting one of the "PayDay Loans"

These "lender traps" may end up costing you very high interest rates (I've seen them as high as 85%), making it almost impossible to ever repay!

A Debt Settlement Program may be the answer. 

Here's the basics:

If you haven't stopped making of payments to your creditors, rather than continue this process, you will start making a payment (really a deposit) to an account set up for you at an FDIC bank.

Two things will happen:

  • Your account will start to grow, which will allow for negotiations (more later).
  • The creditors and debt collectors will be calling and sending letters.

Yes, your "original" creditor (Visa, Citibank, Home Depot,etc.) can legally call you about your account.  You gave permission (all the fine print) when you signed up.

But, once your accounts are transferred to a debt collector (usually 3-4 months), you can put a stop to the calls.  This will help:

STOP Collection Calls Free Sample Letter

You will also be getting letters from your creditors or debt collectors.

They may offer some kind of "hardship plan" to help you get caught up, but most of these are just a trick to get you to keep paying, and paying, and paying!

Debt Collection companies (and sometimes the original creditor) are usually willing to accept a SETTLEMENT for less than the balance due.

Why would they do that?

The original creditor may just want to clear up old debts and charge off your account as a loss to their over-all profit/loss for tax purposes.

They have figured in how much "loss or breakage" they can accept and still be profitable!

They may have ASSIGNED your account to a debt collector who will get paid a percentage from what they are able to collect from you.

The original creditor may also charge off your account and SELL the account to a debt collector who is also a DEBT BUYER.

There are millions (possibly Billions) of dollars of "debt" bought and sold for literally "pennies-on-the-dollar".

Whether you account was assigned or sold to a debt collector, you can see that they may be open to a settlement. 


You have a Citibank Card with a balance of $10,000.

It was sold to XYZ Debt Collection Services for $500...that's right..."pennies-the-dollar"!

Do you think they might be open to a settlement of say...$3,000 - $5,000? 

Sure, check this out:

Recent Settlements See what we have  done for our clients!

As time goes by, one-by-one, your accounts are settled and your Credit Report shows a $0 balance!

Does this happen over-night?  

Of course not!  Depending on how much debt you have and your particular financial situation, a Debt Settlement Program may take 4 or 5 years to help you finally become...


But, doesn't that sound great?

A Debt Settlement Program is not the answer for everyone, but may be just what you need!  It's easy to find out:

FREE  Debt Elimination Summary



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Tags: debt collector, credit report and credit score, Best Debt Settlement Companies, credit cards, mimimum payments

What to Do if You Receive a Summons for Unpaid Bills

Receiving a summons can be a very stressful situation!  Here's what you should know about a summons and more importantly, what you need to do about it:

It seems like a week doesn't go by that a prospect or one of our clients receives a SUMMONS.

Most of the time, a SUMMONS is delivered to you at home.  But in some cases, it may be mailed by certified mail or delivered to your place of employment.


Before I explain what you need to do, you need to know why this is happening and what you can do to prevent it in the future!

When you find yourself in a financial hardship due to any number of reasons, most likely, you just can't afford to keep up with the minimum payments due on your credit accounts.

At first, after the creditor doesn't receive the payment that is due, you will get a statement with a warning (along with extra LATE FEES and added INTEREST) telling you how much you need to send in this month to catch up.

When you can't make that payment (and of course, you can't), you may start getting calls from a representative of the company.

I know you would like to explain your situation and would like to get a "little sympathy", but most of the time, the rep just doesn't care.  

I suggest that you either ignore those calls or if you just can't resist, say something like:

"I'm going through a very hard time and just cannot afford to make any payments at this time.  I plan to get caught up in the near future, but for now,  please stop calling me!"

Don't wait for an answer, just HANG UP.

Most likely, the calls will either stop or slow down and now you'll start getting letters.

These letters may threaten to "charge off" your account and turn it over to a debt collector or to an attorney.

This usually happens after 3-4 months of non payment, but sometimes, they may wait 6 months or more.

But, at some time, they will send these accounts to a collection agency or a law firm that deals mainly with debt collection.

Now, you will start getting calls and letters from them.

You can also put a  stop the calls now (before, the original creditor had the right to call you).

This will explain:

STOP Collection Calls Free Sample Letter

If your circumstances don't change, and you can't negotiate a repayment or settlement agreement with the collectors, they may decide to start their "legal options" by filing a claim.

Once the claim (legal claim that you owe the debt) a SUMMONS will be delivered or sent to you.

The SUMMONS is going to say something like:

"You must APPEAR and give an ANSWER to this claim."

Without going into a long explanation, this basically just means that if you don't owe the money the PLAINTIFF is CLAIMING, you (the DEFENDANT), must provide PROOF to the court.  

This must be done in a short period of time (usually 20-30 days from the date of delivery) and it must be in "legally correct form" which usually requires an attorney's help.

Most of the time, you (the Defendant), owes the money, so when you don't give an ANSWER to the court, then the the attorney may apply to the court for a date in order to be awarded a JUDGMENT by DEFAULT.

Before this happens, here's what you need to do....

Even if the summons has been delivered, the creditor (plaintiff) may still be willing to accept a SETTLEMENT or a STIPULATED AGREEMENT:

Debt Settlement

Depending on your particular circumstances, you may be able to negotiate a settlement/reduced payment of the balance.

For example, if you are retired and receiving only Social Security or Retirement benefits as your only source of income, these funds are 100% EXEMPT from any levy or garnishment even if a judgment has been awarded!

If you are disabled, and only receiving SSI and/or Disability Benefits, these are also 100% EXEMPT from any levy or garnishment.

There are several other situations where you may have LEVERAGE to negotiate a settlement.

It's not easy, but very possible.  We do this everyday for many of our clients:

Recent Settlements See what we have  done for our clients!

Stipulated Agreement

If you cannot negotiate a settlement, the law firm may apply to the court for a WRIT OF GARNISHMENT.  

With this, they can GARNISH YOUR WAGES and/or  FUNDS IN YOUR BANK ACCOUNT!  For most people, this would be devastating.

Many times, a creditor (or attorney for the plaintiff), may be willing to agree to a series of payments to repay the debt instead of garnishment.  Of course, by now, the balance is much more due to interest, fees, court costs, etc.

As long as you meet the terms of the agreement, the attorney will not go forward with a garnishment or bank levy.

As you can see, a SUMMONS is serious and you can't ignore it!

I hope this information has helped, but if you feel like you need more information, then click here:

FREE  Debt Elimination Summary



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Tags: summons, debt collector, stipulated agreement, oregon wage garnishment, Oregon debt collection

Don't Panic if You Receive a Summons!

It's bad enough to be under the stress and pressure of having too much debt and not being in a position to make adequate payments, but now, you get a SUMMONS!

I'm going to explain not only why it happened, but also what you can do to take care of it.




I think it was Tony Robbins who either used an acronym about FEAR:


  • False
  • Evidence that
  • Appears
  • Real

When you get a knock on the door and someone (sometimes a sheriff or police officer) hands you a summons and says, "You've been served", it can be a very fearful experience!




Take a deep breath, sit down and slowly....I said slowly (I know how you feel) the summons.

Most of the time, a summons will read something like this:

"You are hereby required to appear and defend the complaint filed against you in the above-entitled cause within thirty (30) days from the date of service of this summons on you.  If you fail to appear and defend, the plaintiff will apply to the court for the relief demanded in the complaint."

It usually goes on to read:

"You must "appear" in this case or the other side will win automatically.  To "appear" your 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 the plaintiff does not have a lawyer, proof of service on the plaintiff." they have your attention! But, before you "get carried away", let's examine the SUMMONS carefully:

"You are hereby required to APPEAR and DEFEND the COMPLAINT FILED AGAINST YOU...


I know it sounds like you must appear in court, but that's not what it means.  The phrase, "appear and defend" is further explained in the second paragraph. 

The second paragraph (above) also says that you must file an LEGAL PAPER called a MOTION or ANSWER.

This MOTION or ANSWER is, in fact a LEGAL PAPER that you would file with the court if you don't believe you owe or are responsible for the debt they are claiming you owe. 

Yes, it will cost you a fee  just to file your ANSWER, and it must be filed in the appropriate legal fashion.  This usually requires an ATTORNEY to be retained, which also costs you more money!

But, in most cases, the client or DEFENDANT in the claim actually owes the debt, it is not necessary to file an ANSWER.

So, the 30 days to appear and defend doesn't mean you have to go to court!

OK, so what should you do?

Here's what has happened so far:

When you have debts that you are unable to pay, the creditor will send nasty sounding letters and call and call and call (you probably have experience this already). 

If you cannot or do not respond by making some form of repayment, then the original creditor may decide to hand over to a COLLECTION AGENCCY or hire an ATTORNEY to file a CLAIM or  "COMPLAINT". 

Most of the time, the original creditor will use a DEBT COLLECTOR or DEBT COLLECTION AGENCY to attempt to get you to repay the debt. They will start by sending you letters that may sound threatening in an attempt to scare you into paying the debt.

And as you probably know, they will call constantly.  Even though we have laws that protect us from harassing phone calls from debt collectors, most people are not aware or do not know how to put a stop to these calls. 

The FAIR DEBT COLLECTION PRACTICES ACT clearly spells out what a debt collector CAN and CANNOT DO!

The good news is now, you can put a stop to those calls! 

As long as the account is still with the original creditor, they have the right to call you.  Now, they must do it according to the FDCPA (above), but you can't put a stop to the calls until the account is turned over to third party collection agency.

You must send a letter and they must stop calling (even though they can continue to send letters).

This will help:


STOP Collection Calls Free Sample Letter


But, even though you can and have put a stop to the calls, in most cases, they are not going to give up trying to collect on the debt.

See my blog on HOW TO DEAL WITH DEBT COLLECTORS for some good tips.

  • OK, you've receive the summons.
  • You understand that you don't have to appear in court in 30 days

Now what?

You should contact the attorney who filed the claim and attempt to SETTLE THE DEBT by making a lump sum payment for less than the balance due. 

This is not always an easy thing to do at this point because the PLAINTIFF (the creditor or debt collector) has had to pay a pretty hefty FEE TO THE ATTORNEY to file the claim, prepare the summons and have it delivered to you.


Yes, many times you can still negotiate a settlement or other reduced repayment plan even though a judgment has been awarded!


Here's an actual example of a settlement we were able to negotiate even though a judgment had been awarded.  Click on the link below:

Actual example of a judgment that was settled.


But, if you are unsuccessful in negotiating a settlement, then you might have to attempt to negotiate what is called a STIPULATED AGREEMENT.

In a Stipulated Agreement, you and the plaintiff/attorney for the plaintiff have a legal document  written up ( the collector's attorney does this and you will not pay a fee). 

The agreement will basically state that if you make a certain dollar amount payment each month until the balance is paid in full, then they will not go forward with any more LEGAL OPTIONS.




When a Plaintiff (the creditor) is awarded a judgment (and they will be in most cases), then they now can choose to do several things...legally, to collect on the debt:

They can get a WRIT OF GARNISHMENT, giving them the ability to take 25% of your take-home pay until the debt is paid in full!

They can get a WRIT OF LEVY, giving them the right to levy one or more of your BANK ACCOUNTS! 

Again, before you go into PANIC MODE!!!!

The following sources of income are 100% exempt from any bank or account levy:

  • Social Security
  • Disability Income
  • Unemployment Income
  • Retirement Income
  • And several other sources

However, if you receive normal income (called W-2 Income) from your employer, and you deposit those funds into your checking or savings account, they can be garnished/levied.

The bank has now option but to obey the Writ of Garnishment delivered!

There is nothing more devastating to someone to deposit their check (from W-2 or other "earned income") and have their check or debit card declined at the grocery store because their account was liquidated over the weekend!

To make sure this doesn't happen, DON'T IGNORE THE SUMMONS!

Hopefully, I have made my point...

Let me summarize (if your still not clear, please re-read this article!):


If you take the appropriate action (as I've spelled out), you should be able to work out a mutually agreeable option.

If all of this sounds a little intimidating, I understand. If you need more guidance:

FREE  Debt Elimination Summary


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Tags: bank levy, how to stop a wage garnishment, receive a summons, judgment, settlement

"Pay-to Delete", Is This Ethical or Even Legal?

Over the last 15 years, I have come across all kinds of so-called "credit repair" suggestions and/or scams.

One of these is called "Pay-to-Delete".  The basic idea is that if you have an account that is past due, charged off, or in collections, you can offer to pay 100% of the balance in exchange for the creditor or debt collector promising to delete that account from your credit report.

Sounds OK, but also sounds "a little to good to be true". 



The major crediot reporting bureaes are "for profit" businesses that collect data on all of us about how we use credit.  This includes:

How many accounts/credit cards you have

What type of credit accounts you use

How much debt you have

How you pay...on time, late, etc.



The credi bureaus, mainly the big three:










Tags: how to stop a wage garnishment, Debt Settlement Services, Oregon debt collection