Received Summons! Kinda Freaked Out!

If it's not bad enough having too many debts and bills, receiving a SUMMONS is especially stressful!

One of our clients sent me an email this morning and said...

"I received this subpoena last night.  Kind of freaking out.  What do I do!"

woman_on_floor_with_all_her_bills

We've been helping people deal with the stress of having to much debt and just not enough money to keep up for many years.

 

I've written many blogs about what to do with or how to prevent a summons, but wanted to give some insight that may help.

 

WHY DID YOU RECEIVE THE SUMMONS?

When you miss payments due on your accounts (I'm only talking about unsecured accounts like credit cards, medical bills, etc.) the original creditor will start calling and sending letters.

They may offer a few options for getting you "back on track", but for most people, these don't help or are possible due to your circumstances.

Trying to explain to the agent is usually a waste of time, so I don't advise trying.

If you do, just say something like...

"I've had some things happen and can't make payments right now.  I intend to get caught up soon and would appreciate it if you'd stop calling."

After a few months, most likely your account will be transferred, assigned or even sold to a collection agency.

Now you can at least put a stop to the calls:

STOP Collection Calls Free Sample Letter

 

DEALING WITH DEBT COLLECTORS

There are thousands of companies that make a lot of money collecting bad or old debts!  These companies may take accounts on consignment, in order to earn a portion of the money they recover.

Or, they may have just purchased the account for pennies-on-the-dollar from creditors who have given up on trying to collect and have just written off the debt as a loss.

The debt collector most likely will be open to a SETTLEMENT.  The amount of settlement is determined by many factors, but on the average, a settlement of 50% to 70% (more or less) may be available.

Recent Settlements See what we have  done for our clients!

 

 DON'T IGNORE A SUMMONS !

To many people take the "hide your head in the sand" approach to their financial crisis.  Although I certainly understand and appreciate how they feel, the debt is not going to go away!

If the calls and letters from a debt collector go unanswered or returned, after a few months, the debt may be:

  1. Recalled back to the original creditor
  2. Transferred to another debt collection agency
  3. Sold or transferred to a Law Firm that specializes in Debt Collection

If your account lands with #3, and if they cannot reach you or an agreement or settlement cannot me negotiated, they may decide to FILE A CLAIM.

Once a CLAIM is filed with your local county court, a SUMMONS is prepared and sent out for delivery.

The delivery may be by a COUNTY SHERIFF or COMPANY PAID TO DELIVER the summons.

Either way, receiving a summons is (like my client said), kinda "FREAKS YOU OUT!"

Although a summons (or small claims order) may differ, most of them state something like the one my client 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 case of your failure to do so, Plaintiff (creditor or debt collector you owe) will apply to the court for the relief demanded in the Complaint."

Well, it sure sounds like you have to go to court within 30 days, doesn't it!

But, if you kept reading, it would explain.  (I'll paraphrase and explain to save time:)

It says you must "APPEAR".  Notice the word "appear" is in italics.

It then goes on to explain what "appear" means:

It basically says that if you wish to give proof of why you do not owe the CLAIM being made, you have 30 days to provide the court with a legal document called a "motion" or "answer".  You also have to pay the required filing fee ($165 in this particular county court).

The summons goes on to say that if you have questions you should see an attorney immediately and usually gives a phone number for your state's Bar Lawyer Referral Service.

NOW WHAT?

OK, so you have the summons and understand that you don't have to go to court.  What should you do?

The worst thing you can do is ignore the summons!!!!!!!

If you ignore the summons, a JUDGMENT will most likely be awarded to the PLAINTIFF.

If this happens, the attorney for the plaintiff will seek the legal options available to get funds awarded in the judgment.  These include:

  • Wage Garnishment
  • Bank Levy of your bank accounts
  • Placing a lien against your home or other property

I don't have the space here to address each of these, and there are things you may be able to do if you are facing one or more of these due to a judgment.

The important point is....

DON'T LET IT GET TO THIS POINT!!!

In most cases, some kind of agreement or solution can be negotiated before or even after a JUDGMENT has been awarded.

You may have to repay the entire balance due to avoid a garnishment, levy or lien.

This will most likely be a STIPULATED AGREEMENT that will be filed with the court.

This basically will say that as long as you make the required payments specified int he Stipulated Agreement, the Plaintiff will not continue to seek the legal options described above.

Once the Stipulated Agreement is completed, a LETTER OF SATISFACTION will be mailed to the court and the judgment is removed.

Now, I've explain a lot. What's the main points?

You have several options to prevent your account from ever getting to becoming a judgment.

  • You can't ignore the debt.
  • It will not go away!
  • If you receive a summons, don't panic!

If you are overwhelmed, we may be able to help:

FREE  Debt Elimination Summary

 

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Tags: stop wage garnishment, summons, debt collector, receive a summons, credit cards, judgment, settlement

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.

 

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

WHAT IS 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!

 

FIRST, DON'T PANIC!

 

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."

OK...now 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...

"APPEAR AND DEFEND"

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.

 

WHAT...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!):

DO NOT, DO NOT, DO NOT, Ignore a SUMMONS!

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

 

Photo Credit

 

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

Beware of Debt Collection Scams!

Being in a financially stressful situation is bad enough, but then add to that a call or letter from a "so-called" debt collector that threatens fines and/or imprisonment can be happen!  Here's what you need to know and what you can do about it:

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Being in a situation where you just can not keep up with the payments due on your credit cards or other unsecured debts can be very stressful and fearful.

You have several options to help you get through this (which I'll talk about later), but it is very helpful if you have a basic understanding of how the debt collection process works...legally, that is!

Calls and letters

Once you start to fall behind in making at least the minimum payments required, you will start to get calls and/or letters.  The original creditor usually starts with a letter saying something like"

"Your account is seriously past due and you must call us immediately to arrange repayment or your account may be charged off and turned over to a debt collector or attorney."

What the original creditor really wants is help you start making some kind of payments again.  They really don't want to lose you as a customer or to have to charge off your account as a bad debt.

Most major credit cards or other lenders have in-house collection departments that will attempt to get you to pay.

JUST A WORD ABOUT STOPPING THE CALLS...

As long as your account is still with the original creditor, they have the right to call you in regards to that accounts.

Now, once that account is transferred or sold to a debt collector, then you can stop the calls.

I'll show you how is just a minute.

If you have the ability to get caught up and keep your account from being charged off and turned over to a debt collector, you should do so.

But, BEWARE of a so-called "Hardship Plan" offer!

Your creditor may offer you a 6 month, lower payment and/or interest to help you get "back on your feet".

These"Hardship Plans" are usually not in the consumer's best interest and you should really examine the offer before agreeing to it.

Account placed with a Debt Collector

After your account has been delinquent for about 3-4 months with no payments, most of the time, the creditor will transfer or sell your account to a debt collector.

Now, you start getting letters and calls from them, but now, you can at least put a stop to the calls.  Here's how:

STOP Collection Calls Free Sample Letter

Now that your account is with a debt collector, you may be able to negotiate a SETTLEMENT for less than the full balance due.

A successful settlement depends on several factors and although not that easy to do, can be done.  Here are some actual examples of a settlement:

Recent Settlements See what we have  done for our clients!

Most debt collectors will work with you and will follow the law as laid out in the Fair Debt Collection Practices Act or FDCPA.

A debt collector can and cannot do certain things in an attempt to collect a debt and it would be worth your time to familiarize yourself with your rights under the FDCPA.

Beware of Debt Collection Scams!!!!!

Once in a while you may get a call, letter or email from a debt collection scam company.

One of our clients received an email recently from just such a company.  It stated:

This letter is to notify you that we have received a Summons of Garnishment on your wages. This means that someone you owe money to has been awarded a judgment by the court for payment of the debt. The court has ordered us your employer to deduct 50% percent of your disposable earnings and make payment to the court on your behalf. The following applies to you:

Before you are arrested

If you pay in full, or make a part-payment before you are arrested, the warrant will be recalled and amended. However, it will be immediately re-issued if the debt is not paid in full.

After you are arrested

Once the warrant has been served, your only options are to serve the time in prison or pay the debt (plus costs) in full at the court house.

If you want to stop the garnishment deductions from your paycheck, you must obtain a release or pay the entire amount you owe, which you can pay with the help of Money Gram, Western Union, OneVanilla Prepaid Visa Card and American Express Prepaid Debit Card in order to close this account.

Sincerely,

Frank Dollard, Sr. Officer

UNITED STATES OF FEDERAL MANAGMENT      ACELOAN.ONLIN

Not only was this a scam, but also illegal under the FDCPA!

Here is an article concerning this you should visit:

American Cash Services USA - Payday Loan Collection Scam

There are so many violations of the FDCPA, I don't know where to begin.  But, let me point out a couple of the most blatant ones:

A debt collector cannot threaten that you will be arrested!

Yes, a debt collector may choose to FILE A CLAIM concerning your account.

You would receive a SUMMONS, and if a settlement could not be reached, a JUDGMENT may be awarded to the plaintiff (collector).

Then, and only then, could the plaintiff seek payment via wage garnishment or bank levy.  But, even these have restrictions and limitations.

I've written several blogs about WHAT TO DO IF YOU RECEIVE A SUMMONS, and it may help you to check out.

If you ever receive a call, letter or email from a company like this, DO NOT REPLY,  but contact your state's attorney general's office immediately.

If you live in Oregon, click here

So, do not be tricked into one of these collection scams!

When your debts are just too much to handle, you have several options, but do not fall prey to one of these crooked scams!

FREE  Debt Elimination Summary

 

Photo Credit

 

Tags: debt collection harassment, debt settlement, receive a summons, abusive debt collection practices, garnishment

Help, I Received a Summons!

help i received a summonsIf you answer the door and are handed a summons, there are some things you must do:

#1 DON'T PANIC!

If you don't read the summons carefully, it seems like it says that you have 20-30 days before you have to go to court. But this is absolutely NOT TRUE!

The summons is stating that you have a brief time period to file an ANSWER.  This is a formal denial of that you owe the debt.  In most cases, the DEFENDANT (that's you) doesn't need to file an "answer" as you do owe the debt.  But if you feel that you have repaid the debt or that the debt does not belong to you, by all means file an "answer".

It may cost you a hundred bucks or so, but that is just the cost of the court.  You will want to contact your court to find out what you should do. In very rare cases, you may need to hire an attorney to help.

After the collectors called and called and called, (Click HERE to learn HOW TO STOP THE CALLS), they may decide to FILE A CLAIM against you...hence the summons. Which brings us to...

#2 DON'T IGNORE THE SUMMONS!

We had a client that received a summons several months ago and did not tell us about it.  She called the other day to say that her wages were going to be garnished and "what can you do about it?"

In most cases, there is not much that can be done once a Writ of Garnishment is issued.  A WRIT OF GARNISHMENT is issued after the creditor or PLAINTIFF, wins a DEFAULT JUDGMENT.

Since we had no idea about the summons and subsequent legal procedure that led to the award of the judgment, we were in a bind!

Once the Writ of Garnishment is issued in most states, 25% of your net (after tax) income will be withheld by your employer!  For most people, this would be FINANCIALLY DEVESTATING!

For Example:

Let's say you make $18 an hour.  That's about $3,000 a month gross earnings.  If your employer withholds normal income taxes, that would mean your take home would be about $2250. 

A garnishment of 25% would be about $562.50!  If it's hard to make ends meet now, how could you do it with $562 less?

If she had contacted us about the summons as soon as she received it, we most likely would have negotiated either a settlement (maybe 50% or so of the balance) or a Stipulated Agreement, whereby she would repay the debt (often at a slightly reduced balance) with a monthly payment her budget could handle.

In some case the creditor will accept a stipulated agreement AFTER a judgment is awarded, but not always.  Unfortunately, although her creditor was willing to take a little less that the $562.50, she could not afford it and she was forced to seek a bankruptcy attorney's services!

#3 REMEMBER THESE IMPORTANT STEPS!

  • DON'T IGNORE A SUMMONS
  • CONTACT THE ATTORNEY FOR THE CREDITOR/PLAINTIFF IMMEDIATELY
  • OFFER A REDUCED SETTLEMENT AMOUNT OR
  • OFFER TO REPAY AT AN AMOUNT YOUR BUDGET WILL ALLOW

If you have receive a summons and are still not sure what to do, WE CAN HELP. Give us a call AT 1-877-492-4109 OR click the link below!

help I received a summons

Tags: wage garnishment, wage garnishment in oregon, receive a summons

What to do if you receive a summons

receive a summonsThe doorbell rings and you are handed a summons regarding one of your past due credit accounts.

What do you do when you receive a summons?

First…DON’T PANIC!

  • You are not going to jail!
  • You will not have to go to court!
  • They are not going to garnish your next paycheck.
  • They are not going to garnish your bank account.
  • They are not going to come take all of your belongings!

 

Next…DON'T IGNORE THE SUMMONS!

For the sake of this post, we're talking about unsecured debts such as:

  • Credit cards
  • Personal loans
  • Medical bills
  • Personal line of credit
  • Store cards, etc.
  • Auto Repo

After numerous phone calls and letters, a creditor may decide to start legal action in order to collect the debt that you owe.  Not knowing how the process works, most people are intimidated and somehow find a way to pay the entire debt.  Once you understand the summons process, you will find that you can still settle that debt for less than the full balance.

The Summons Process

(The entire process usually takes 3 months or so.)

  1. A CLAIM will be filed in the county court where you reside.
  2. You will receive a SUMMONS. This is usually hand delivered and will state something to the effect that you have 20 or 30 days after receipt of the summons toANSWER THE CLAIM.”
  3. An answer is your side of the story that you would file ONLY if you feel you do not owe the amount of the claim. Even though you don't like the additional interest, late fees and now court costs, you still owe that as part of the debt. 
  4. If you owe the debt, there is no reason to spend the time or money for an answer and, YOU DO NOT NEED TO GO TO COURT.
  5. Contact the  attorney for the plaintiff (the creditor). If you are employed and receive normal W-2 wages, you need to try and work out a repayment plan so they do not proceed with the legal action.
If you are a Debt Relief client, you can skip step #5 and CONTACT US IMMEDIATELY by faxing or emailing the summons to your negotiator.  We (DRNW, Inc.) will contact the attorney for the plaintiff on your behalf, and we will most likely be able to negotiate a settlement based on a repayment plan to stop the legal action. Although we cannot guarantee that we will be able to negotiate a sollution, we are successful about 99% of the time!



Tags: debt settlement, how to stop a wage garnishment, receive a summons