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.

couple_Help.jpg

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:

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

Oregon Wage Garnishment...How to Prevent...How to Stop

A wage garnishment can be financially devastating, taking 25% of you net, take-home paycheck!

Here what you need to know to prevent or how to stop garnishments.

woman_on_floor_with_all_her_bills.jpgA wage garnishment doesn't "just happen".  After years and years of assisting people with debt problems, it still always amazes me when one of our prospects or newer clients that have received a notice from their employer that their pay check is going to be garnished, says something like:

I had no idea that this could happen.  I never received anything about it.

 How did this happen?

OK... Time Out!!!

A wage garnishment (technically called a Writ of Garnishment) can't happen without several steps preceding the order.

Let's start from the start...

You have several credit cards or other unsecured debts and because of something that has happened to you, such as:

  • Divorce
  • Severe illness or disability
  • Death of spouse or loved one
  • Too little fixed income after retirement

...now you just cannot keep up with the minimum payments due and start missing payments or just stop making payments all together.

When this happens, the creditor will start calling and writing letters trying to find out what is going on and to see if something can be done to get you to start making payments again.

If you ignore these calls and/or letters (and many, many people do), then the original creditor has no choice but to charge off, transfer or even sell the account to a debt collector or debt buyer.

Now the calls and letters really start to increase!

The good news is that you can put a stop to these annoying and sometimes harassing calls:

STOP Collection Calls Free Sample Letter

Just follow the link above, and the calls will stop.

But, that doesn't mean that these debt collectors are going to stop their efforts to get you to pay!

So what should you do?

Let's say that you have several credit cards and because of going through a serious illness or injury, you have not been able to work, your income went down, and now, you are not able to make even the minimum required payments due.

When the creditor or collector calls, you may be able to negotiate a SETTLEMENT.

Again, depending on a number of circumstances, the creditor or collector may accept an amount that is 40% - 60% of the balance.

Recent Settlements See what we have  done for our clients!

If you don't engage them, then the creditor or collector may decide to FILE A CLAIM against you in the county court where you live.

After the Claim has been filed, a SUMMONS will be issued and you will be SERVED the summons.  This could be at home or even at work!

When you receive the Summons, again, you CAN NOT IGNORE THE SUMMONS!  Even after the summons has issued and served, you should still be able to negotiate either a settlement or a repayment agreement.

But, if you don't, then there will be a court date set, and the creditor/collector will be awarded a DEFAULT JUDGMENT.

Once the judgment has been awarded, the Plaintiff (creditor/collector) can apply for a WRIT OFGARNISHMENT.  This will be sent to your employer and your employer has no choice but to obey the Writ!

Most likely, your state demands that the employer withhold an additions 25% of your net check (after taxes and required deductions have been removed).

This can be devastating!  Here's an example:

  • You earn $36,000/year or $3,000/month.  
  • You are paid every two weeks and that bi-monthly check is $1500.
  • State and Federal taxes equal 30%, so $450 is withheld and your net check is now $1,050.
  • Your employer must withhold an additions 25% or $262.50.
  • That's $525 each month!  You think it was hard to pay bills before...

I'm thinking you are starting to understand, that you cannot just ignore your debts, letters or calls, and especially a summons.

If you did, and now you have a wage garnishment, here's what you can do:

Contact the attorney for the plaintiff (that's the collector or creditor).

Explain you situation and if you have it (most likely you won't) offer a lump sum settlement on a reduced balance.

Usually, they won't take a reduction, but if the offer is large enough, they might.

Most of the time, they will be willing to accept an agreement whereby you pay them, say $200 -$300 a month (instead of, in this example, $525/month).

But, due to your financial hardship, you just can't afford any payment or the garnishment?

In this case, you should seek the services of a bankruptcy attorney.  This may be your only choice to protect yourself from the creditors!

I hope you understand my simple point....

  • A wage garnishment doesn't just happen.
  • If it does, you still have options.
  • The key is to take action!  Don't just "hide your head in the sand"!

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Tags: oregon wage garnishment, how to prevent wage garnishment, stop wage garnishment, dealing with debt collectors, summons, default judgment

Wage Garnishment in Oregon...Know Your Rights!

If you receive a notice that your wages are going to be garnished, you need to act, and act fast! Here's some helpful tips you can use:

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Here at Debt Relief NW, it seems like we get dozens of calls weekly from people who "just found out", that their pay check was going to garnished!

I've highlighted the phrase, "just found out" to make a point:

A WAGE GARNISHMENT DOESN'T JUST HAPPEN!

There is a legal process that must unfold before a creditor or debt collector can receive a writ of garnishment from he court to send to your employer.

I am going to outline, in a nutshell, so to speak, of the process and what you:

  • COULD HAVE DONE TO PREVENT IT and,
  • WHAT YOU CAN DO NOW TO STOP IT

For the purpose of this article, I'm only referring to UNSECURED DEBTS, such as:

  • Credit or Store Cards
  • Personal loans (NOT mortgage or auto loans)
  • Deficiency judgment after a repossession
  • Medical bills
  • Private student loans

OK, let me lay out an example (based on over 15 years of helping people with their debt issues):

I'll call him Joe.  Joe has a decent job and earns about $20/hour.  At 40 hours a week and an average of 4.2 weeks/month, his GROSS (before taxes and deductions) is $3360/month.

Of course, after taxes and other deductions, his NET INCOME ("TAKE HOME")  is only about $2352 (approximately 30% less than his Gross Income).

He is renting an apartment and has all of the usual bills.

His total budget or outgo is about $2100 a month, leaving him barely $250 for emergencies, etc.

Included in that budget is about $15,000 of credit card debt spread over 3 cards:

  • Visa                 $8,000
  • Master Card    $6,000
  • Home Depot    $1,000

The total monthly MINIMUM PAYMENTS on all add up to $300/month.

Joe is having a very difficult time making the $300/month, minimum payments and then, he is working around the house and falls off a ladder and breaks his leg!

His insurance policy doesn't provide for any "disability income" for the accident, so not only is he going to be off work for about 3-4 months, he doesn't have any means of income.

Fortunately, he had a little savings account, but it wasn't enough to cover all of his monthly budget.

So, Joe does what thousands of people do every day, he pays all of the most important bills, like his rent, utilities, groceries, etc. and let's the credit card bills get behind.

NOW WHAT?

After he misses a payment or two, he starts to get letters and calls, lots of calls!

At this point, Joe can't do anything about the annoying calls, because as long as his account is still with the original creditor, they have the right to call him about it.

But, once the account is charged off, sold, or transferred to a collection agency or other third party, then he can put a stop to the calls!.  (I'll show you how in just a minute.)

Of course, Joe tries to explain to the caller what he is going through and they may or may not offer some kind of "HARDSHIP PROGRAM"  to help him through this.  But, it really doesn't matter as he just will not be able to make any payments until he is back to work and get some other bills caught up.

NEXT...

The original creditor(s) will most likely charge off, sell or transfer the account to a collector after about 120 days of so if nothing can be arranged.

So now, Joe starts getting letters and calls (LOTS OF CALLS)  debt collectors!

He'd like to make some kind of arrangement with them, but they are demanding full payment on the balance or else!

At this point, he can put a stop to these calls.  Here's how:

STOP Collection Calls Free Sample Letter

But, even though the calls are stopped and he is just "ignoring" the letters, the debt is not going to go away.

THE DEBT COLLECTOR DECIDES TO FILE A CLAIM

If the debt collector is unsuccessful in getting you to start making payments, then the debt collector may decide to start the legal process of obtaining a judgment.

An attorney for the collector will FILE A CLAIM at the courthouse of the county where you reside.

This CLAIM will generate a SUMMONS that will be delivered to you, usually in person, but sometimes by registered mail.

I'm not going to go into all of the details of what to do with the SUMMONS here, but you can check out a blog I've written that will be very helpful called:

 

WHAT TO DO IF YOU RECEIVE A SUMMONS.

 

But, please DO NOT IGNORE THE SUMMONS!

The fact that the collector decided to file a CLAIM proves that they are very serious about collecting on this debt.

If you ignore the summons, then a court date will be scheduled (you don't have to go), but a representative from the collector (now called the PLAINTIFF) will show up and the court will award them a DEFAULT JUDGMENT.

It's called a "default" judgment because no one contested it and they won by default.

NOW WHAT HAPPENS?

Now, the PLAINTIFF ( the collector) can apply for a WRIT OF GARNISHMENT.

The Writ of Garnishment is sent to your employer and they, by law, must obey the writ and withhold up to 25% of your net, after-tax, income.

Joe has just gone back to work and then he get's this notice from the payroll department that he is being garnished...and he starts to panic, which is understandable!

Remember when we did the math earlier about what his actual "take-home" or "after tax" income was?

That amount was $ 2,352.

Most states allow for up to 25% of the net, after-tax check to be deducted and sent to the creditor until the full balance (inflated now with interest and legal fees) is repaid!

WOW...WAIT A MINUTE...

$2,352 X 25% = $588 will be deducted from Joe's Net Check!

He could barely make it on the $2352, and now he has to somehow make it on $1764!

Yep....PANIC!

 

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OK, so Joe's really in trouble, you get it...

How did this happen and what can he do about it now?

Joe could have stopped this "process" and ultimate JUDGMENT by trying to work out a SETTLEMENT PLAN with the debt collector.

Most debt collectors would much rather accept less than the full balance than go to all of the time and expense to seek a judgment:

Recent Settlements See what we have  done for our clients!

When Joe received the summons, he could have contacted the attorney for the collector and most likely worked out some kind of repayment arrangement that may have included a reduced settlement!

Once the judgment was awarded and the plaintiff had spent more money in legal fees, they went after the garnishment.

But that doesn't mean that you still could not work out something to stop the garnishment!

You may be able to get them to stop the garnishment and take a more "reasonable" amount to repay the debt.

Depending on the circumstances, you may even be able to not only stop the garnishment, but also get a reduced settlement.  Each case is a little different.

If this help, great.

If you find it a little "over-whelming", then maybe we can help:

FREE  Debt Elimination Summary

 

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Tags: garnishment, how to prevent wage garnishment, summons, debt collection, credit card

Do Not Let Debt Collectors Intimidate You!!!

Dealing with a debt collector can be very intimidating.

 Here are some tips how to deal with them:


4685879535_e268930fc8_n.jpgSomeone has said that the word FEAR really stands for:

  • False
  • Evidence, that
  • Appears
  • Real

Living under the financial stress that comes from dealing with too much debt can be one of the most traumatic experiences anyone can face!And if that wasn't bad enough, now you have debt collector calling day and night!

It's time to eliminate that fear that comes from dealing with debt collectors!

The Fair Debt Collection Practices Act protects all consumers from the unlawful tactics used by some (not all) debt collectors.

Although the FDCPA covers many things that debt collectors can and more importantly, CAN'T DO, here are some of the most important for you to know:

They cannot call you dozens of times a day or before 8am or after 9pm.

They cannot harass, threaten or try to deceive you.

Although they can contact family and friends, they are prohibited from revealing anything about you debts or situation.  They can only contact them for your address, phone or work number.

And about contacting you at work...You can stop that by telling them you cannot take personal calls at work.  If they call again, you have a legal right to file a claim with your state's attorney general's office or even contact an attorney to bring charges!

They cannot threaten you or insinuating that you could be arrested, etc.


But, what most people are afraid of is that somehow they can take your stuff or money in the bank, wages, or make you sell your home.

You have to understand the legal process a debt collector must go through to really understand what they can and cannot garnish or levy. 

Disclaimer...

Although I've been helping people solve their debt issues for a long, long time, I am not an attorney, so don't take anything I say as the advice from a legal authority!

Having gotten that out of the way....

While your debt is with the original lender, they have the legal right to call you about it. Now, the same FDCPA rules apply, but at this point, you cannot make them stop calling you.

However, once the original creditor charges off, places the debt for collection or even sells your debt to a debt purchaser, then you have the LEGAL RIGHT TO STOP THE CALLS!

Here' how:

STOP Collection Calls Free Sample Letter

 

When the debt is placed with a debt collector, of course, they want to get you to pay them money and don't really want to go the "legal" route unless all else fails!

Trying to explain your situation to the average debt collector is usually a waste of time.  That's why I encourage all of our clients to NOT ANSWER the phone and if they do by mistake, JUST HANG UP!

But they are going to send you letters....lots of letters in hopes of getting you to pay or set up a repayment plan.

You might even get a letter offering to SETTLE for LESS THAN THE FULL BALANCE.

This may or may not be a good deal, but you should think about it.

When I work for my clients, I'm trying to negotiate a settlement of around 50% or less.  In most cases we can.  Here are some actual examples:

Recent Settlements See what we have  done for our clients!

If you cannot come to an agreement with the debt collector over a reasonable amount of time (maybe 2-4 months), they may decide to:

File a CLAIM

You'd then get a SUMMONS

And that could lead to a JUDGMENT

Which could allow them to now...NOT BEFORE... get some of your money, etc.

ONE MORE TIME...

THE DEBT COLLECTOR CANNOT TOUGH ANY OF YOUR ASSETS WITHOUT A JUDGMENT!

Filing a CLAIM means that they hire an attorney to file the proper documents with the county court wherein you reside.  They are "claiming" that you owe this debt.

Then, you'd be served a SUMMONS.

It basically states that the "plaintiff" (creditor or debt collector) claims you owe such-n-such a debt.

It also states that you have 20-30 days to "APPEAR" and give an "ANSWER".

That sounds like you have to go to court, but you don't!!!!

If you can prove (with clearly documented evidence) that you do not owe this debt, then you could file the legal document called an ANSWER. 

But, in most cases, you owe the debt, so it is not necessary.

WHAT YOU CANNOT DO IS TO IGNORE THE SUMMONS!

In most cases, they (the debt collector or attorney for the plaintiff) may be willing to set up some reasonable repayment plan instead of going through all of the legal processes to get a judgment.

But, if you ignore the summons, they will then set a court date and be awarded a judgment by default (no one contested the CLAIM) so they win a DEFAULT JUDGMENT.

I hope you are starting to see that there is a long process before a creditor or debt collector can go after any of your assets.

So, let's say that a creditor or debt collector is awarded a JUDGMENT, NOW WHAT?

If you are employed, and receive a normal check (called a W-2), then they can now file a WRIT OF GARNISHMENT with your employer.   

Your employer had no choice but to obey the "WRIT" and send the attorney for the plaintiff 25% of your net/take home check each week or by-week until the total debt you owe is paid back. And, they can charge interest as well (each state varies, but Oregon is 9%).

If you are unemployed or retired, unemployment income or retirement income from a retirement plan and especially from Social Security is 100% EXEMPT from garnishment.

But, BE AWARE!!!

If you "co-mingle" your retirement income (including Social Security) with other "earned income", then ALL OF THE FUNDS are now accessable at your bank!

That can happen if you transfer some of your retirement or Social Security income funds from checking to a separate savings account!  Now they can go after the savings account.

So, if you have a judgment against you, make sure you get some sound advice on how to protect your assets!

Here is a link to a very good article about what I have been writing about.  It's published by the Federal Trade Commission and very informative...

Debt Collection

 

I hope this has helped you understand what a debt collector can and cannot do so that you won't be afraid!

If you could use some help, then let us know:

FREE  Debt Elimination Summary

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Tags: debt collectors, summons, judgment, debt settlement

How to Deal With a Wage Garnishment in Oregon (or most any state!)

If you think it is hard to make ends meet now, what would you do if you had 25% of your paycheck taken as a result of a garnishment?

22853064975_8c547f714f_m.jpgBefore I show you how to deal with a wage garnishment here in Oregon (or for most any state), let's get some things straight:

THIS GARNISHMENT DIDN'T JUST HAPPEN!

I can't tell you how many times one of our clients calls to tell us that a debt collector or creditor just garnished their paycheck and they had no idea it would be happening.

OK, I know that in some VERY RARE CASES, they may have not received or seen the SUMMONS that came in person or by registered mail, but in most cases, they got it, but just ignored it.

Brief review of the collection process and how this happened:

If you find yourself in a very difficult financial situations due to a number of things, such as:

  • Loss of employment
  • Divorce
  • Death of spouse or partner
  • Illness or disability
  • Too little income after retirement

...and, you simply cannot keep up with the minimum payments required by your creditors, here's what usually happens:

When you miss a scheduled payment, you may get a phone call or letter.

If you don't reply or miss another, you ABSOLUTELY will get a phone call or letter....lots of em'!!!

(I'll show you how to ultimately put a stop to these calls later, but for now, let's keep moving through the process that could lead to a WAGE GARNISHMENT.)

The creditors wants to do whatever they can to get you to start making payments again.

You may get a letter offering to "bring your account current if you make "such-n-such" payment by a certain date.

Or, they may say to call them to look into a "Hardship Program" (which I really don't like).

But if you just can't afford any payment after paying  rent, utilities and buying groceries, WHAT NOW?

In most cases, the original will CHARGE OFF the balance of the debt you owe them.

This means that they are going to report to the 3 major credit bureaus:

  • Experian
  • Equifax
  • TransUnion

...that they didn't pay them back as promised and they have lost a lot of money!

Your account will most likely be transferred or sold to a debt collection agency.  This may even be a Law Firm that only deals with debt collection.

Now, you start getting calls and letters from the debt collector, but the good news is that now, you can LEGALLY STOP THE CALLS.

As long as your account was with the original creditor, they had the right to call you about your account.

But, once that account is charged off and placed with a collection agency, you have the right, according to the Fair Debt Collection Practices Act, to demand that they stop calling you. 

The letters will continue, but the annoying, and sometimes HARASSING phone calls will stop.  Here's how you do it:

STOP Collection Calls Free Sample Letter

But, just because they have stopped calling doesn't mean that they have stopped trying to collect!

If they cannot get you to start making payments to them (they may even offer a reduction in the balance...called a SETTLEMENT) then they may decide to FILE A CLAIM against you in your county's courthouse.

The debt collector's CLAIM say that you have not fulfilled the promise to repay this debt and they are going to seek legal action against you....sue you!

You will get a SUMMONS, and it will state all of the above and it will state that you have 20-30 days (varies by state) in order to give an ANSWER.

OK, lots of "big words" there, so let me give a simple definition:

SETTLEMENT  

This is when the creditor and/or the debt collector agrees to a substantial reduction of the balance to settle this account, once and for all.

If your interested, here's some actual examples of settlements we have negotiated for some of our clients:

Recent Settlements See what we have  done for our clients!

CLAIM   

The Debt Collector or in some cases the original creditor files a claim in court that you owe them money. When this happens, you get "served" a SUMMONS.

 

SUMMONS

The summons names you as a DEFENDANT and the Creditor or Debt Collector is the Plaintiff.  They have "claimed" that you owe this debt unless you can prove it, and I mean, absolutely prove it with copies of canceled checks, etc.

 

ANSWER

If you know, for certain AND CAN PROVE IT....FOR CERTAIN, then you have the legal right to file AN ANSWER with the court.  Not only does it cost you a FILING FEE (I believe it is about $165 here in Oregon), it has to be legally correct. 

In other words, you may think about hiring an attorney to prepare the ANSWER. And, of course, that costs more money!

But, IN MOST CASES, you really do owe the money, so giving an "ANSWER" is not necessary.

So, NOW WHAT?????

If you cannot negotiate a settlement or arrange a repayment agreement, the Plaintiff (debt collector), may decide to just go forward with a court date in order to be awarded a JUDGMENT.

Once the JUDGMENT has been awarded to the Plaintiff, they can apply for a WRIT OF GARNISHMENT.

This Writ of Garnishment is sent to your employer and your employer has no choice but to honor it.  This means that they are going to withhold (after all of the other withholdings) another 25% of your net, take-home paycheck!

So you see, this garnishment didn't just happen....there was a long process and it could have been stopped numerous times along the way!

What too many people do when they finds themselves in a terrible, financial hardship is to "hide their head in the sand" rather than seek numerous solutions.

Believe me, the last thing most creditors what to do is to have to spend the time and money to file a claim, follow up with calls and letters to you, and possibly spend more money in setting a court date, paying an attorney to represent them, etc.

Last week, we had a client call us to say that she had neglected to act on a summons she had received and the creditor (plaintiff) had been awarded the judgment....acted on the judgment....and her HR department sent her a message that her check would be garnished about $500!

We were able to contact the attorney for the collector and negotiate a repayment plan (you rarely get much, if any of a reduction/settlement after a judgment has been awarded) whereby our client agreed to pay only $200 per month until the balance was paid.

She could not handle the loss of $500, but she could make $200 work.

FINALLY....

Here in Oregon (or in any state for that matter), the best way to deal with a garnishment is to not let it get to that state.

But, if it has, then you may be able to get a reasonable repayment agreement in place.

If you need help or guidance, let us know:

FREE  Debt Elimination Summary

 

 

 

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Tags: debts, oregon wage garnishment, debt collector, debt settlement, summons, hardship plans

You've Enrolled in a Debt Settlement Program....Now What?

Now that you've made the decision to enroll in a debt settlement program, what happens next?

 

cutting_up_credit_card.jpg

Once you have looked at all of your options and decided to enroll in a debt settlement program, you cannot just sit back and do nothing. 

Here is what you need to be doing:

Debt Settlement is the best option for those who have accumulated too much debt and cannot keep up with the minimum required payments.

In a nutshell, most (if not all) of your unsecured accounts will ultimately be turned over to a collection agency.  This unusally occurs about 120-180 days from your last payment.

At first, you will get several calls and letters from the debt collector.

These calls can be very frustrating and annoying, so you should take advantage of a law from the Fair Debt Collection Practices Act (FDCPA) that says that if you make a written request to the debt collector to stop calling you, they must stop or face very serious fines from the Federal Trade Commission!  Here's how to do that:

STOP Collection Calls Free Sample Letter

If the calls do not stop, then you should contact your state's attorney general's office to file a complaint.  If you live in Oregon (as we do), here is the link:

How to File a Complaint with the Oregon

You will continue to receive letters from the debt collector.

It is VERY IMPORTANT that you send the latest letter (s) to the Debt Settlement Company you have retained to negotiate settlements for you.

The easiest and fastest way to do this is by email or fax.  But, if you cannot email or fax, then you can mail the letters.

When you enrolled in the debt settlement program, you stopped making payments to your creditors (most likely, you had done so already) and began making a payment to a FDIC Insured Settlement Reserve Account through your debt settlement company.

As your fund grows, the negotiator will begin contacting your creditors to work out a reasonable settlement.

Depending on a number of circumstances, your settlement should be somewhere around 50% of the current balance.

If your reserve account has enough funds, the settlement may be paid in a lump sum.

But, if not, a good negotiator can still negotiate a very good settlement and pay it over a period of time (with no additional interest or fees).

Here are a few examples of actual settlements we have negotiated for our clients:

Recent Settlements See what we have  done for our clients!

Once a settlement has been completed, the creditor/debt collector is supposed to report that the account has a $0 balance and was "settled-as-agreed" to the three major Credit Reporting Bureaus.... Equifax, TransUnion and Experian.

Unfortunately, not all debt collection agencies follow through and your credit report may be showing incorrect information.

About 2 months after the settlement is completed, you should request a FREE Credit Report to make sure it is being reported correctly.

Click on this link to request a Free Credit Report:

ANNUAL CREDIT REPORT

Your debt settlement company will provide you with proof of payment and help you open and complete a dispute.

Sometimes, a debt collector may decide to FILE A CLAIM with your county court about your debt.

If this happens, you will receive a SUMMONS.

Please DON'T PANIC!

The summons will state that you have a limited time to APPEAR AND ANSWER the claim against you.

It sounds like you will have to go to court, but this is not so. 

An ANSWER is a legal response to the CLAIM that you can prove that you do not owe the debt.

Most of the time you know you owe the debt and therefore you will not need to do anything.

Again, and this is VERY IMPORTANT, if you receive a summons, contact your debt settlement representative right away!!!!

The debt settlement company will contact the attorney for the debt collector and most likely will still work out a reasonable settlement.

I can't stress enough how important it is NOT TO IGNORE a summons.

After helping people for 15 years, the only time a client has a WAGE GARNISHMENT or BANK LEVY is that they failed to inform us that they had received a SUMMONS!

A quality, professional debt settlement company should welcome and answer any questions or concerns you may have.

You should be able to contact them via phone or email and receive a reply in a short period of time.

 

Here are some things to look for in a Debt Settlement Company

 

As time goes by, one by one, your debt will be settled.  Depending on the total amount of debt you had and how much you could afford to deposit into your settlement reserve account, your program may take anywhere from 36 - 60 months.

Remember....

The goal of debt settlement is to...

  • protect you from wage garnishments or bank levy
  • prevent you from having to resort to bankruptcy
  • help get you out of debt

Yes, getting settlements that substantially reduce the balances is great, but not necessarily the main goal.

FINALLY:

A good communication line between you and your debt settlement representative is critically important to a successful program.

Although it may seem like it is taking a long time, ultimately you will be debt free and your credit scores will begin to improve...but it just doesn't happen over night!

Here is what some of our former clients have said:

 

A FEW TESTIMONIALS

 

If you are just beginning your search for information about debt settlement, we can help. Just click on the button below:

 

FREE  Debt Elimination Summary

 

 

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Tags: debt settlement, debt collector, wage garnishment, summons, Credit Score

Will Debt Collectors Negotiate After a Summons or Judgment?

If you have been delivered a summons or had a judgment awarded against you be a debt collector, you should still be able to reach an agreement to avoid garnishments or bank levies! 

Fear-1.jpgFinancial circumstances beyond your control can be very stressful.

More often than not, your situation was caused by one or more events such as:

  • Loss of employment
  • Divorce
  • Illness or Disability
  • Fixed Income of Retirement

When this happens, your debts can be very difficult or impossible to keep up.

 

And, as you may know, sometimes these accounts are turned over to a debt collector.  A debt collector may be contracted by the original creditor or may have purchased the debt for pennies on the dollar after the creditor decided to give up on trying to collect.

This is where the problem starts!

Most debt collection companies as well as the debt collector agent themselves are professional.  

Like it or not, they do serve a purpose of trying to recover debt that is owed.

However, there are some, and you could say many debt collectors who do not act in a professional manner and violate the Fair Debt Collection Practices Act.

If and when you are contacted by a Debt Collector, you need to take action.

THE WORST THING YOU CAN DO IS TO IGNORE THE PROBLEM!

If you legitimately know that you do not owe the debt, you can demand that the debt collector VALIDATE the debt.  But, you must do this right away.

Most letters you receive from the collector will state something to the effect that "If you do not dispute the validity of the debt, it will be deemed an admission that you are liable for the debt."

Here's a link to a blog I wrote about:

FREE GUIDE to

By the way, be very careful of a so-called "Credit Repair Company" that uses the "debt validation" procedure to challenge LEGITIMATE debts in order to try and raise your credit score.  This is not only unethical, but may also be illegal!

OK, let's say you know that you owe the debt and the debt collectors are calling all day.  Here's how to stop the calls: 

If you cannot afford to deal with this debt now, you can put a stop to the never ending calls from a debt collector.  

While you cannot stop the original creditor from calling, you certainly have the legal right to demand the collector from calling.  

Click here for a "How to Stop Debt Collection Calls":

STOP Collection Calls Free Sample Letter

 

But, the problem is not going to go away!

If you do not make some kind of arrangement with the debt collector, they may elect to file a complaint with you county court in order to get a judgment.

The first thing that will tell you that they are very serious and are not going to just go away is that you will receive a SUMMONS.

Receiving a summons is unpleasant and a little scary if you do not know what to do.

I've written many blogs and articles about how to deal with a summons, so check out one of these at:

 

HOW TO DEAL WITH A SUMMONS

 

For this article, let's say that you ignored the summons and the debt collector was awarded a DEFAULT judgment.

A Default  Judgment just means that the judgment was awarded to the plaintiff (debt collector) as you did not contest the claim in court.

When these type of judgments are awarded, in about 99% of the time, the defendant (creditor) did nothing, and thus, the judgment was granted to the plaintiff.

Now the debt collector, with the judgment, can take legal action to recover the debt.  These may include:

If you have some funds or can afford a reasonable monthly payment, you should be able to avoid these actions.

The debt collector really doesn't want to spend the money or take the time to file for those legal actions above, but depending on your situation, should be willing to either accept:

  • A Lump-sum (or in some cases a monthly term payment) Settlement
  • A Stipulated Agreement whereby you repay the balance at 100% plus the interest allowed in your state.  (Oregon is 9%, WA is 12%)

We have been helping people deal with the problems associated with debt for a long time (about 15 yrs.), and I can only recall two cases where the client received a wage garnishment or bank levy.

In both cases, this happened because the client refused to follow our advice.

But, in both cases, we were able to STOP THE WAGE GARNISHMENT and BANK LEVY.

If you would like a FREE CONSULTATION, with absoutely NO OBLIGATION, give us a call or click below:

FREE  Debt Elimination Summary

 

 

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Tags: debt settlement, debt collectors, debt, summons, judgment

Garnishment! Why it Happened and How to Stop!

If you've been slapped with a WAGE GARNISHMENT, you need to know WHY it happened and HOW to put a STOP to it!

A wage garnishment or bank levy/garnishment doesn't just "happen"!  

 

cartoon_about_stress.jpg

 

Before a "writ of garnishment" can be granted to a creditor or debt collector, several things have happened:

When you sign up for a credit card, bank card, or any unsecured account (including medical bills), you have entered into a legal contract with the basic agreement that you will repay the loan at the terms and time frame outlined in the agreement.

If you don't, the original creditor has the right to:

  • Call you
  • Write you, or...
  • Hire a Debt Collector, or...
  • Retain an attorney to file a claim...bring a lawsuit!
  • Go to court to win a judgment against you
  • Apply for a Writ of Garnishment 

Let's walk through the process leading up to a WAGE GARNISHMENT, and I'll show you how to:

  1. Prevent a judgment
  2. Prevent a garnishment
  3. Stop a garnishment 

I've been helping people deal with credit and debt problems for many years and it still always is a mystery to me when someone calls for help and says,"I had no idea this was going on"!

Well, I suppose that is possible, but most likely, here is what happened:

1.  Something happened in your life that caused you to be unable to keep up with the required payments.  It could have been one or more of these:

  • Loss of employment
  • Divorce or other family problem
  • Death of a spouse or loved one
  • Long illness or disability
  • Barely enough income after retirement

When you are late or unable to pay the minimum payment due, you probably already know, but...

2.  Creditors start calling and writing, trying to find out what is going on.

Unfortunately, the original creditor has the right (remember that agreement with all the FINE PRINT?) to call or contact you by mail, so at this point, you cannot legally stop them.

3.  If the original creditor cannot contact you or you do not talk with them or return their request for a call, then they may place the account with a DEBT COLLECTOR.

The debt collector will start calling, and calling, and calling....very annoying!

But now you have the right to PUT A STOP TO THESE CALLS FROM DEBT COLLECTORS!

STOP Collection Calls Free Sample Letter

When your account has been placed with a debt collector, you may have the opportunity to SETTLE THE ACCOUNT BALANCE FOR LESS!

This is called DEBT SETTLEMENT and depending on your circumstances, this can be a very effective method for not only reducing the balance due, but also stop the potential legal process that may begin.

Although dealing with a debt collector can be a very intimidating and frustrating experience, if you feel up to it, you may want to call and see what they are willing to do for you,

If you are uncomfortable doing this, you can get help:

 

4.  If the debt collector cannot get you to set up payments to repay or are not willing to accept a REASONABLE SETTLEMENT, then they may decide to FILE A CLAIM.

Once the Claim is filed, a SUMMONS will be issued.  It usually is delivered in person, but may be sent by registered mail.

As I said earlier, although people will say that they never received a summons, in most cases...

  • They had received it, but just ignored it!
  • Someone in the household signed for it.
  • Someone in the household signed for it if delivered by registered mail.

But even if you really never received or saw the summons, at this point, it may too expensive to fight!  Yes, you could, but most likely you won't.

SO, NOW WHAT????

5.  The summons had stated that you had 20 -30 days to give an "ANSWER".

A legal ANSWER is you legal response to the claim/summons that you do not owe the debt and CAN PROVE IT!

Most people know that they owe the debt and so spending the money to give the ANSWER ( yes, it costs money to FILE AN ANSWER!!!)is a waste of time and money.

6.  Even if you do not file an ANSWER, you can still stop the process by negotiating a STIPULATED AGREEMENT.

Depending on your financial circumstances, the plaintiff (creditor) may agree to a repayment plan rather move forward for a garnishment.

The reasoning is that if you are slapped with a garnishment it may force you to seek bankruptcy protection.  If that happens, they may get little to nothing!

 

7.  But, if the previous procedures fail to prevent the garnishment or you receive noticed from you employer that you will be garnished, you still have options:

  • Call the attorney for the plaintiff and attempt to negotiate a repayment plan in lieu of the garnishment.
  • Seek bankruptcy protection.

Even if you receive the notice of garnishment from your employer, you still may be able to contact the attorney for the plaintiff/creditor and work out a repayment plan.

You will need to be able to show hardship and offer a reasonable payment plan.

But if the plaintiff/creditor refuses, then you may be forced to seek BANKRUPTCY PROTECTION.

Bankruptcy is a drastic option, but is not as bad as you think it is.  

Check with a bankruptcy attorney to get understand your options.

 

Now you know "WHY" the "HOW TO STOP" a garnishment.

But, taking action is still too much for most people.......

FREE  Debt Elimination Summary

 

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Tags: Bankruptcy, debt, summons, stipulated agreement, debt settlement help, garnishment

Do I Have to Respond to a Summons?

If you have debts that are delinquent, you may get a summons.  Do you have to respond to a summons?

 

Fear

The simple answer is "no", but that doesn't mean you should ignore a summons!

If you have so much debt that you cannot keep up with the payments, at some point, some or all of these debts will become "past due", "delinquent", or "charged off" for non payment.

In some cases, the original creditor or the debt collector or debt buyer may decide to retain an attorney to file a claim against you.

Here's what usually happens:

When you miss a payment or two, you start to get the phone calls and letters.  This is the original creditor trying to get you to start making the payments again.  During the first 60-90 days, the account most likely stays with the original creditor as they continually try to get you to start making payments.

As annoying as the phone calls are, you cannot legally stop the calls as long as the account is still with the original creditor.  You can, however, choose to ignore the calls, but this is not your best tactic.

You can answer the phone and try to explain your situation, but this is usually a waste of time.  It would be better for you to write the original creditor and briefly explain your financial circumstances and that you fully intend to repay this debt, but cannot do anything at this time.

This may or may not buy you some time.  Most likely, the original creditor will offer you some kind of HARDSHIP PLAN, but BEWARE!  Most Hardship Plan offers only delay the inevitable...you will have to repay 100% of this debt plus interest, late fees, annual fees and possibly over-the-limit penalties!

If the original Creditor is unsuccessful in getting you to start paying, they may decide to place the account with a DEBT COLLECTOR.  Here where things are starting to get really serious.

At first, you'll receive some letters, telling you what you already know...

                                  THIS ACCOUNT IS PAST DUE!

It will explain that you must bring you account up to date or face serious consequences (or something like that).

Then, the phone calls start!  Although the Fair Debt Collection Practices Act has helped stop many ruthless and harassing debt collectors, they are still out there!

According to the FDCPA, you have the legal right to make them stop calling you!

Click below:

STOP Collection Calls Free Sample Letter

But now that the calls have stopped, the original creditor, the debt collector or debt purchaser may decide to take legal action.

A word about DEBT BUYERS:

When a debt goes unpaid for a long time and a debt collector (or several debt collectors) are unsuccessful collecting the debt, it normally will be charged off as "uncollectable".  There are thousands upon thousands of these debts out there and there is are companies who will buy large groups or lots of debt at pennies on the dollar, planning on getting paid on enough to make a profit.

So, if they decide to have a claim filed, they would retain an attorney (licensed in your state) to file a COMPLAINT in your county courthouse.

By-the-way...

It's not always logical when or why a debt collector or debt buyer decides to file a claim.

If you are retired, disabled, or unemployed, you are going to be exempt from wage or bank garnishment. 

Back to the process:

The court will prepare a SUMMONS, and it will SERVED or delivered to you.  This is usually done by a sheriff or company paid to serve the summons.  Some people think that they can avoid receiving the summons by not answering the door or by lying to the person or sheriff trying to serve the summons.

I don't advocate this tactic, as you could face legal charges for not telling the truth, and eventually, you will be served.  You may be able to "buy some time".

If you can come up with a lump sum of approximately 50%-75% of the amount of the claim, they may accept that as a settlement.  The amount they are willing to accept will depend on several factors, specifically your financial situation:

  • employed (W-2 or self employed)
  • unemployed
  • retired
  • disabled
  • buying or renting

If you are exempt from wage or bank levy, but are a home owner (or have significant equity in your home), you may want to get this account settled to avoid a lien being placed on your property.

If you do not have funds available to offer a lump sum settlement, in most cases, you will be able to arrange a repayment of the debt by making monthly payments.  Sometimes, this will be called a STIPULATED AGREEMENT before or after a judgment.  As long as you complete the terms of the agreement, no further legal action will happen.

On the other hand, if you start such an agreement and miss a payment, they may deem the agreement "VOID", and start the legal process again!

BOTTOM LINE...

It is not in your best interest to ignore a summons! 

In fact, if you are in a stressful financial situation, take action before your account(s) go this far!  Your chances of successful negotiation are much better if you can get something worked out BEFORE a judgment is awarded!

 


Photo credit: Kevin B 3



 

 

 

 

Kevin B 3

Tags: summons, credit card debt, fair debt collection practices act, how to prevent wage garnishment, exempt income, debt settlement

Advantages of Debt Settlement in Texas

advantages of debt settlement in texasIf you live in Texas, you have some unique laws that make debt settlement a great way to eliminate old credit card or other unsecured debts.

Due to various circumstances such as:

  • Loss of employment
  • Illness
  • Death of Spouse
  • Divorce
  • or many other of life's challenges

...you may find yourself with too much debt and without the ability to make regular payments. When that happens, it doesn't take long before the DEBT COLLECTORS begin to start calling!

If this has happened (or is happening) to your, click here to learn how to STOP THE CALLS.

The debt collector may try to get you into a HARDSHIP PROGRAM!  BUT BEWARE!

If it has been several months since you made your last payment, the debt collector may file a complaint and you would receive a summons.

DON'T IGNORE THE SUMMONS!

If you owe the debt and cannot negotiate a settlement, the CREDITOR OR PLAINTIFF will be awarded a DEFAULT JUDGMENT.

In most states, the CREDIOR can get a WRIT OF GARNISHMENT that would result in an average of 25% of your net income being withheld from each paycheck until 100% of the debt is paid!

BUT NOT IN TEXAS!

Texas does not allow garnishment of wages in order to repay unsecured debt! This gives Texas residents a tremendous advantage and leverage in negotiating a settlement of their debts!

After being awarded a judgment, many creditors place a LIEN ON YOUR HOME

This means that before you sell or transfer the property, the debt (PLUS INTEREST, FEES, ETC,) would have to be paid to release the title!

BUT NOT IN TEXAS!

Texas has the best HOMESTEAD LAWS in the United States.

Basically, your principle residence cannot have a creditor place a lien after a judgment for unsecured debt! This protects Texas Residents great protection and comfort!

With these two laws protecting your wages and homestead, residents of Texas can and should be able to negotiate very favorable settlements!

We have been helping Texas Residents for over 10 years and we can help you too!

Experienced Debt Settlement companies understand the advantages of debt settlement in Texas. Therefore, debt collectors are more willing to settle debts for less!

Actual Debt Settlement Examples: (Click on Link below to view)

 

photo by: Calsidyrose

 

 

 

 

 

 

Tags: summons, judgment, debt collection, wage garnishment, credit card debt, texas homestead law, debt relief in Texas, texas debt settlement, debt settlement in Texas, lien