Stop a Summons Before it Starts!

I get calls every month from people who say they are surprised that they have received a summons!

Let’s see….

  • You took our loans or charged up credit cards.
  • Due to circumstances beyond your control, you have not been able to make the minimum required payments due each month.
  • You received several calls, letters or emails from the creditors, but ignored them.
  • Someone knocks on your door and hands you a SUMMONS!



SURPRISED?   Now what?


  • You are not going to jail!
  • You will not have to go to court!
  • They are not going to garnish your next paycheck (UNLESS YOU IGNORE THE SUMMONS)
  • They are not going to garnish your bank account. (UNLESS YOU IGNORE THE SUMMONS)
  • They are not going to come take all of your belongings!
  • At least….NOT YET!

If you have secured loans…where there is collateral (home, car, boat, RV, motorcycle, etc.), the situation is different!

If you default on a loan where there is collateral, the creditor or collector may decide to repossess the item! Be AWARE!

OK, but in this article, I’m taking about UNSECURED DEBT:

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

To prevent a summons and the start of the “legal” process, you need to understand the basic process and/or option a creditor or collector has.


The Summons Process


  • After attempting to contact you (remember all those calls, letters and emails?)
  • The creditor or collector may retain an attorney to
  • You will receive a SUMMONS. This is usually hand delivered, but can be left with someone at your residence. Sometimes the server will deliver to your place of employment.
  • The summons will state something to the effect that you have 20 or 30 days after receipt of the summons to ” ANSWER THE CLAIM.”
  • An answer is your side of the story that you would file ONLY if you can PROVE WITH DOCUMENTATION, that you do not owe the amount of the claim
  • If you owe the debt, there is no reason to spend the time or money for an answer. YOU DO NOT NEED TO GO TO COURT.
  • 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.


So, what can you do or could you have done to




Contact the creditor/collector and try to work our a “catch up” plan to start repaying the debt you owe.

The problem with this option is that you most likely cannot afford the payments.

The same is true with a Debt Management or Credit Counseling Program.



Once your account has been charged off (the creditor has kind of “given up” on collecting the debt on their own), the account is usually placed with a DEBT COLLECTOR.

Now you can try to SETTLE the account for LESS THAN THE FULL BALANCE.

The process is time consuming and stressful, but usually (not all the time), the collector will agree to a SETTLEMENT AGREEMENT.

This agreement is usually for 40%-70% (in some cases even lower) of the balance due.

Of course, the collector wants the amount of the settlement in a LUMP SUM, but I doubt you have that kind of money. If you did, you probably would not have gotten behind in the first place! RIGHT!

Yes, you can also negotiate TERMS/MONTHLY PAYMENT PLAN on the settlement.

Again, they want the monthly amount as large as possible and the length of the plan to be as little as possible. You have to negotiate strongly to get a plan that fits your budget. Not easy!

Actual Settlements See what we have  done for our clients! Click here!



If you failed in trying to work out a reasonable repayment plan.

If you failed in trying to negotiate a reasonable settlement.

Then you may the assistance of a Bankruptcy Attorney to protect you from:

  • Bank Levies
  • Wage Garnishment

Bankruptcy is a “scarry” word to most people, but bankruptcy laws are to help us protect ourselves from creditors and/or collectors devastating our lives.

Contact several attorneys in the area where you live.

The initial appointment (may be by telephone only) should be FREE. If not, keep looking!


To wrap up…

When you find yourself in a financially stressful situation whereby you are falling behind or simply cannot make the required monthly payments due, DO NOT IGNORE THE OPTIONS YOU HAVE FOR REPAYMENT OR SETTLEMENT!

Be pro-active…don’t “hide you head in the sand” so to speak.

For more information…click below:

 Personalized  Program Comparison Click here!


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Tags: credit card debt, Bankruptcy, credit counseling, bank levy, debt settlement in oregon, Debt Settlement Services, bankruptcy attorney, Credit Card Debt Negotiation, garnishment

Seniors and Credit Card Debt

Seniors face tremendous financial pressure trying to make ends meet living on a fixed income.  They often must revert to credit cards to survive!

Unfortunately, the balances and minimum payments continue to increase to a point where there is just not enough income from their fixed income or modest retirement.

What can they do?


I've been helping seniors deal with too much credit card and other unsecured debts for a long, long time.

Most of my clients found themselves in real financial trouble and had no idea of how to solve the problem.

If you search the internet, most likely you'll find numerous ads from bankruptcy attorneys, offers for loan consolidation and/or poor advice to transfer balances from one card to another.

There are better solutions!

But first....

Debt Collectors and even Law Firms that specialize in debt collection will try to intimidate or scare seniors into making poor decisions!

The Fair Debt Collection Practices Act spells out what a collector legally can and cannot do.

Basically, a debt collector cannot:

  • Make threats of garnishing retirement benefits or bank accounts

  • Use inappropriate language or baseless claims

  • Attempt to collect on a debt owed by a deceased spouse (unless you and the deceased spouse where co-signers on the debt or card)

  • Attempt to collect on a debt that has gone beyond the Statute of Limitations (these vary state by state)

  • Make calls to you before 8am or after 9pm in your time zone

  • Threaten with legal action if no legal action is taken

  • Make excessive calls though out the day!

  • Make calls to you if you are on the Do Not Call registry (only the original creditor has the right to call you)

  • Continue to call even after you have sent a Cease and Desist letter 


OK, we've detailed some of the practices a collector CANNOT do, let's see what they CAN DO and what options you have...


Debt Management Programs

(called Consumer Credit Counseling)

A Debt Management Program is for those who are making the minimum payments, but realize the balances are barely going down !

If you qualify, you should see a reduction in interest rates and possibly have over-the-limit or other fees dismissed.

You will be making one monthly payment (roughly equal to the total you are currently making) to a Debt Management Company.

People in a Debt Management Program are usually out of debt in 4-5 years.

If you currently cannot keep up with the required minimum payments, then most likely a  Debt Management Program will not be an option for you.


Debt Settlement Program

Creditors, collectors and Debt purchasing companies will usually accept a reasonable settlement offer for less than the full balance due.

Unfortunately, in the past, there were numerous so called Debt Settlement Companies who were fraudulent and unscrupulous!  

Recent laws in most states have have helped run these types of companies out of business, and yet a few remain.

Before you consider seeking the help of a Debt Settlement Company, you should do your due diligence and check them out!

BBB        A+        Accredited Click here!

A representative will discuss your particular situation and determine a monthly deposit that you can afford.

This monthly withdrawal from your account is deposited and held by a FDIC bank (Wells Fargo, US Bank, etc.)

As the funds in your account increase, settlement negotiations begin.

Once the settlement agreement is negotiated (must be in writing), a lump sum or series of payments are make according to the agreement.

Actual Settlements See what we have  done for our clients! Click here!

Once the agreement has been satisfied, a letter is sent stating something like "the account has a $0 balance and is settled in full".

This will also be reflected on your credit report and over time, your credit score should improve.


If you just cannot keep up with your minimum payments or even cannot afford a Debt Settlement Program, then you might have to consider filing for...


Although "bankruptcy" is a scarry and often misunderstood legal option, in some cases, it is the best option.

You should consult several attorneys who specialize in bankruptcy before making a decision.

A qualified bankruptcy attorney should not charge for the initial consultation.


Being a Senior Citizen and trying to live on a fixed income is very stressful.

If you could use some advice or guidance, let us know.


Personalized  Program Comparison Click here!




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Tags: debt collectors, debt collector harassment, debt settlement help, seniors, seniors and credit cards

Why Did I Get a Summons?

Being unable to keep up with your debt payments is very stressful. 

Now you get served with a SUMMONS and you are really stressed out!


 For the sake of this article, I'm talking about credit accounts that are     UNSECURED:

   Credit Cards

   Store Cards

   Medical Bills

   Personal Loans

   Pay Day Loans

When you apply for a credit card, store card or any other unsecured account, you are agreeing to the terms to repay this debt.

If you fail to make at least your minimum payments when due, your account will become subject to all collection efforts by the creditor.

These include:

  • Phone calls (lots of phone calls)
  • Emails
  • Mail

If these methods do not get you to start making payments again, then the creditor may elect to retain the services of an attorney to file a CLAIM.

Once the CLAIM is filed with your county's courthouse, a SUMMONS is prepared and sent out.

The SUMMONS is usually hand delivered by a courier who is paid to delivery it.   

The idea of the claim/summons is to get your attention...and it works!

Over the years, most of our clients who received a summons call us almost in a panic!

It is because they do not really understand the language of the summons and think all kinds of incorrect thoughts.  

For example...

The summons will state something like:

"You have 30 days to APPEAR and give an ANSWER".

Sounds like you have 30 days to show up in court, but it doesn't.

This language means that if you have undeniable proof that you do not owe what the Plaintiff (creditor) is CLAIMING, you have 30 days to submit to the court your legal ANSWER.

Most of the time you (the defendant) in the claim owes the amount claimed and so giving an ANSWER would be useless.


If you continue to read the summons, it says something to the effect that if you do not give an ANSWER, then the Plaintiff may petition the court for a DEFAULT JUDGMENT.

Once a judgment has been awarded to the PLAINTIFF/CREDITOR then they have the legal right to pursue all legal methods to collect on the debt, such as:

               Wage Garnishment

               Bank Levy

               Lien on your home 

Before I continue, let's address those basic 3 options above.

If you are employed and receive W-2 income (income reported by law to the IRS), then a wage garnishment could be sent to your employer.

Your employer has not choice but to comply with the garnishment order or face severe fines!

The employer must send 25% of your NET, AFTER TAX paycheck to the Plaintiff/Creditor until the debt is 100% repaid.

This can be devastating  to someone already have a tough time making ends meet!

Let's say you earn a gross monthly income of $5,000 and after tax, you are bringing home $3,500.

25% of the $3,500 would be $875, leaving you with only $2,625 to pay bills!

That's almost 50% of you gross income!

I'm going to tell you how to prevent that in a minute..

But what about a BANK LEVY?

Sometimes the Plaintiff's Attorney/Debt Collector with send out several bank levy notices to banks in your area.  They use your Social Security number and in most case, will locate your bank.

Now, you go to the store and pull out you debit card to pay, but it is declined.

Calling the bank, you learn that your account has been frozen by the Levy!

Again, devastating!

Yes, the attorney for the Plaintiff/Creditor may choose to file for a lien on your home.

However, this is not used as much as options 1 and 2.

Even if there is a lien placed on your home, it DOES NOT mean that you have to sell your home right now to pay the debt!

It means that if you do not take care of this judgment debt before you sell your home in the future, the title company is forced to repay the lien in order to release the title.

So here is the big question...



The creditor wants some kind of repayment plan rather than have to deal with the expense of paying the attorney for the other options.

You should be able to negotiate either a SETTLEMENT, REPAYMENT PLAN, or a STIPULATED AGREEMENT.

Actual Settlements See what we have  done for our clients! Click here!

While negotiating with debt collectors or attorneys for the creditor can be intimidating, it can be done.


Personalized  Program Comparison Click here!


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Tags: bank levy, Debt Settlement Services, credit card, collector

Can a Debt Collector or Creditor Sue Me?

If you cannot keep up with the minimum payments due on your credit cards, a creditor or debt collector may decide to file a CLAIM against you!



If this happens, you will receive a SUMMONS.

The summons will show who the PLAINTIFF is.

This is the creditor or Debt Collector.

You will be named as the DEFENDENT.

The summons will state the particulars:

How much the debt is, etc.


It will also say something like...

You have 30 days to APPEAR and give an ANSWER.

This DOES NOT mean that you have to go to court in 30 days!

It means that if you have WRITTEN PROOF why you do not owe this CLAIM/DEBT, you have 30 days to submit your ANSWER to the court.

This ANSWER must be in the proper legal form and often requires an attorney to prepare and deliver to the court.

Not only will you have to pay the attorney, you will also have to pay a FILING FEE!

If you know you owe the debt, there is no use wasting your time and money.


This is where a lot of people get themselves into trouble by ignoring the summons! 



If you ignore the summons and the court awards the PLAINTIFF a DEFAULT JUDGMENT, then the PLAINTIFF has options to collect on the judgment:

1) If you have earned income (mainly W-2 income), they can apply for a WRIT OF GARNISHMENT on your wages. 

In most states, this is 25% of your AFTER TAX/TAKE HOME income!

Let's say you earn $5,000/month and your over-all tax rate is 30%.

That means your after tax/take home is about $3,500.

If you are garnished, your employer has NO CHOICE but to comply with the WRIT OF GARNISHMENT or face legal action.

That means that your employer would have to send 25% of the $3,500 to the PLAINTIFF!  THAT'S $875, leaving you only $2,625 to live on!


2)  The Plaintiff could apply for a BANK GARNISHMENT!

If awarded, a notice is sent to your bank and any funds you have in your checking and/or savings would be frozen and sent to the plaintiff!

That would be devasting!

Yes, there are EXEMPTIONS on what "TYPE" of income deposited in your account can be garnished such as income from:

  • Social Security benefits
  • Supplemental Security Income benefits (Disability)
  • public assistance benefits
  • unemployment benefits
  • veteran's benefits
  • child support, and
  • federal employee and civil service retirement benefits.

But, the problem is twofold:

Even if your bank account SHOULD BE exempt, many times the bank does not protect you and your funds are FROZEN FOR A LONG TIME!

The bank account is NOT PROTECTED from garnishment if you             CO-MINGLE exempt funds with NON-EXEMPT FUNDS.

Let's say you have your Social Security and Retirement checks deposited automatically in your bank.

You do a little "side job" or even earn a few dollars part-time and deposit that money in the same account.

You just CO-MINGLED funds and now all of those funds are open for garnishment!

Starting to get the picture?

There are several options on how to deal with a SUMMONS that can prevent all the above, but you have to be PRO-ACTIVE.

In most cases, a STIPULATED AGREEMENT negotiated.

This is a basically an agreement saying as long as you pay such-in-such, the Plaintiff will not apply for garnishments.

The Stipulated Agreement is filed with the court and once it is completed or "satisfied", it is removed.

It is also possible to negotiate a SETTLEMENT for less than the balance claimed in the summons.  

This is usually about 70%-80% of the balance and usually must be paid in a lump sum or in some cases, over a period of time.

Actual Settlements See what we have  done for our clients! Click here!

To summarize...

If you receive a SUMMONS, you need to take care of it as soon as possible to prevent a judgment and potential garnishment or bank levies.

If you receive a SUMMONS, it usually means you have more debt than you can handle.  We can help:

Personalized  Program Comparison Click here!



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Tags: stop wage garnishment, receive a summons, can a creditor levy my bank account, credit card debt relief oregon, credit cards, exemption from garnishment, social security benefits, summons, judgments, wage garnishment

Received a 1099-C!  What do I do?

If you have had an unsecured debt settled for more than $600 and less than the full balance, you may get a 1099-C around tax time.

Unfortunately, many tax preparers and/or accountants do not understand how to take care of this so you don't have to pay much or nothing extra in taxes!


The IRS wants to get as much tax from us as possible.  Although we should pay our fair share of tax, many people pay much more than they should by not knowing or understanding the tax code on a 1099-C!


I am not a tax professional or attorney, so I am not giving tax or legal advice. 

You should always consult a qualified tax authority.

Don't be surprised if they don't really understand how to deal with a 1099-C!


You had a Visa Credit Card with a balance of $5,000.

For whatever reason, you just could not keep up with the minimum payments due and the account became delinquent.

After receiving numerous calls, emails and letters, the account was transferred or sold to a "debt buyer".

A debt buyer (company who buys huge blocks of debt found in the records of the Credit Bureaus) can attempt to collect a debt just like the original creditor or the average debt collector.

Anyway, you are able to settle the account for $2,000, for a difference of $3,000.

Actual Settlements See what we have  done for our clients! Click here!

The IRS says that this $3,000 was "FORGIVEN" and should be added back into your total gross income for that year.

Most people (and many tax professionals) mistakenly think that you have to pay $3,000 of additional tax! 


The 1099-C actually says (fine print at the bottom) that you may be EXEMPT if at the time of this "FORGIVENESS" you were INSOLVENT.

In IRS terms, INSOLVENT means that at the time of this settlement/forgiveness your LIABILITIES were greater than your ASSETS, then you DO NOT have to add this FORGIVEN income back in to be taxed!

How do you prove to the IRS that your were INSOLVENT at the time of the settlement/forgiveness?

The process is actually very simple (although again, many tax professionals do not understand it!).

You will need to provide some documentation and an IRS Form 982.

Here is a link that will provide you with the necessary documentation, IRS Form 982 and a simple example.


At Debt Relief NW, LLC, we have been helping people deal with having too much debt for a little over 20 years now.

If you have questions, let us know:

Personalized  Program Comparison Click here!



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Tags: debt collection, debt relief in Portland Oregon, 1099-C, IRS Form 982

I've Received a Summons...What Now???

The doorbell rings and someone is standing there with some documents. 

The man says, "You are being sued and I'm here to serve you a  SUMMONS." 

He hands you the SUMMONS and walks away...



You go back inside (a little in shock!) and start to read the documents.

The SUMMONS says something like you have 30 days (average) to APPEAR  and give an ANSWER.

Sounds like you have 30 days to show up in court and explain why you have not been able to pay this debt.

But, that's NOT what it means!

If you'll look closely at the SUMMONS, the words "APPEAR" and give an "ANSWER" are highlighted or in italics.

It means that if you have absolute, documented proof that you do not owe the debt/CLAIM, you have 30 days to file the proper documentation and proof with the court.

If not, the PLAINTIFF (creditor or collector) may petition the court to be awarded a DEFAULT JUDGMENT.

After (and only AFTER) being awarded the JUDGMENT, can the PLAINTIFF/CREDITOR/COLLECTOR apply for a WRIT OF GARNISHMENT or BANK LEVY.

WAGE GARNISHMENT in most states is 25% of your NET (after-tax) income!

Hard to make ends meet on 100% of your net, after-tax income?

Try it with 25% less!

A BANK LEVY will FREEZE you bank account and you will not have access to your funds! VERY BAD!


You cannot ignore this SUMMONS!

The creditor or collector retained a Law Firm that specializes in Debt Collection by filing CLAIMS resulting in a SUMMONS.

You may have been receiving calls and letters about your delinquent account and have not been able to do anything about it or just ignored them...

Well, now they have your ATTENTION!

At Debt Relief NW, LLC, we've been helping people deal with receiving a SUMMONS for over 20 years.

Of all those, only one or two resulted in a WAGE GARNISHMENT or BANK LEVY.





Of those who let us know about the SUMMONS, we were able to:

1)  Negotiate a settlement the total amount CLAIMED.        

      To do this usually takes a LUMP SUM payment of 70%-80%.

      Rarely will the Creditor/Collector/Plaintiff accept a settlement reduction        and accept payments over a long period of time as well. 

2)  Negotiate a repayment plan on the FULL BALANCE.

      Usually, there is a STIPULATED AGREEMENT.

      It must be signed (sometimes notarized) by the DEFENDENT (CLIENT)

      It is filed with the court, but removed after the agreement is completed.



In most cases a settlement can be negotiated BEFORE a creditor or collector decides to FILE A CLAIM (resulting in a SUMMONS).

But if you receive a SUMMONS, act quickly and legal options to the Plaintiff such as WAGE GARNISHMENT and/or BANK LEVIES can be prevented!

Actual Settlements See what we have  done for our clients! Click here!


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Tags: summons, judgments, wage garnishment

How to Get Errors on Your Credit Report Removed?

Most people have several errors on their credit report!

These errors or inaccurate reporting of your personal information could cause you to pay higher interest rates or even be denied for credit!



  3 basic, major credit reporting agencies

  •                   Experian
  •                   Equifax
  •                   TransUnion





What to do if you find errors?

Prepare your written PROOF (cancelled check, bank statement, etc.) showing that this debt was paid.

Circle the error of the page in your credit report that has the error 

Print a  copy (PDF) of that page (not the entire CR). 

Write a brief explanation of why you are disputing this entry/information.





P.O. Box 9701

Allen, TX 75013


RE:     Your Name

           Your Address

           City, State, Zip

           Your email address

           Your Social Security Number

           Your Date of Birth: Month/Day/Year


I am disputing the reported information for my (CREDITOR) account ending xxxx.

(See the page of my credit report with this error.)

 This account has been settled or paid off and has a $0 balance.

See the letter/statement from the creditor/collector.

 Please correct this error and email or send me a copy of the corrected credit report.



Print your name here and sign above


Enter todays date above


Now what?

You are going to go online and open disputes with each credit bureau that is reporting the error.

Going online is much quicker and easier than calling or sending your information by mail.

Each bureau has it's own website.  You'll find that it fairly easy to follow the instructions.  Here are the links:






What next?

Follow the instruction for each bureaus dispute page.


You will upload:

  • explanation letter

  • page with error circle

  • proof of your dispute


It takes 45 days or more for them to correct the dispute or communicate with you.

Follow up with each bureau by going online to check if error has been corrected.


Your credit report should list the creditor, collector or the company who may have bought your account.

You will need to contact them and find out what is going on!

If you still owe the debt, you should be able to negotiate a settlement.

Not easy, but possible.

If you need advice or help:

Personalized  Program Comparison Click here!

Hope this helps!




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Texas Debt Collection...Did You Know???

If you are a Texas resident and cannot keep up with the minimum payments due on your credit cards, then I have some good news!

Im a little stressed right now


We're talking about UNSECURED debts like:

  • Credit Cards (Visa, Master Card, Discover, etc.)
  • Store Cards (Kohls, Home Depot, Lowes, etc.)
  • Personal loans with no collateral
  • Private Student Loans
  • Medical Bills
  • Quick Pay or "Pay Day" loans

If you find yourself in a situation where you just cannot keep up, then what happens?

You will start getting calls, letters and emails from the creditor trying to get you to start making payments again.

You would think that if you could just "explain your situation" the agent would understand, but this is rarely the case!

After helping people deal with debt for over 20 years, I think is is better to not speak with the agent and of course, not to call back if they leave a voice mail.

Same with emails, just ignore for now.


After a month or so of unsuccessful attempts (calls, letters, emails), your account will most likely be transferred to the internal collections department or sold to a debt collector.

Well, now the calls, letters, and emails will start again!

But now that your account has been transferred, you can stop the calls:

STOP Collection Calls Free Sample Letter

After a few more months, a creditor, collector or debt buyer could decide to retain a law firm that specializes in debt collection to file a CLAIM.

A claim is filed with your local county courthouse and you will then receive a SUMMONS.

The summons will basically state that the creditor (PLAINTIFF) claims that you ( the DEFENDENT) owes a certain amount of money claimed.

The summons will also state that you have 30 days (varies a little from state-to-state) to APPEAR and give an ANSWER.

It sounds like you will have to go to court and stand before a judge to explain yourself!


It means that if you can PROVE with UNDENIABLE PROOF that you do not owe the CLAIMED debt, you have 30 days to file the proper papers with the court.

If not, then the Plaintiff may petition the court for a DEFAULT JUDGMENT.


Only after a judgment is awarded (usually will take 4-6 weeks after the summons is served) the Plaintiff can have the attorney file a claim for WAGE GARNISHMENT.


If you a resident of the great state of Texas, your wages CANNOT be garnished!

In most other states, the court can approve a wage garnishment and your employer would have to send 25% (average per state) of you NET, TAKE-HOME to the creditor or attorney for the creditor!

But again, NOT SO IN TEXAS!

Does that mean that you can just forget about your debts?

NO! Please understand...

A creditor may not be able to garnish your wages, but they can have their attorney apply to the court for a writ of LEVY ON YOU BANK ACCOUNTS!

That means that you could try to use your debit card or write a check and find out there are no funds available!!!

So what can you do?

Once you account(s) go to "collections", you may be able to negotiate a SETTLEMENT for less that the full balance.

But you need to do this BEFORE A JUDGMENT IS AWARDED!!!

Yes, you can negotiate a repayment plan after a judgment has been awarded, but it is difficult to do so.

If you can get to the creditor, collector or debt buyer before legal action starts, then a SETTLEMENT can be negotiated.

A SETTLEMENT is an agreement between you and the creditor or owner of the debt to repay a certain percentage of the balance due.

Once the agreement is completed, the account is now considered "paid-as-agreed" or in some cases "settled for less than the full amount".

Either way, the account now has a $0 balance and believe it or not, you credit score will start to improve! 

Here is an actual example of a settlement we negotiated for one of our clients recently:


Capital Community Bank 1.11.22

Some settlements may be higher or lower, depending on the circumstances, but a decent settlement should be around 50%-60%.

I hope this has been helpful.

     To recap:

  • If your unsecured debts are only a month or so delinquent, then they are most likely not going to be open for settlements.

  • But, after 4-6 months (can vary), your accounts should be able to be negotiated for a settlement.

  • REMEMBER...DO NOT IGNORE A SUMMONS! Just because your wages cannot be garnished in Texas, you bank account could be levied!

Personalized  Program Comparison Click here!



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Tags: Credit Card Debt Negotiation

Will Creditors or Collectors Settle My Account for Less Than the Full Balance?


Credit card debt is on the increase!  With all of the inflation effecting everything we need, consumers are turning to credit cards to get by!


What happens when you just cannot keep up with the monthly required minimum payments?

Will a creditor or collector accept less than the full balance?

If so, how delinquent do my accounts have to be?

If you find yourself in a severe financial situation due to:

  • Unemployment
  • Divorce
  • Illness or Disability
  • Too little income after retirement
  • High inflation and gas prices!!!!

You may be forced to use credit cards in order to stay afloat. 

Most people who do this plan to repay those accounts when things improve, but many times, things either don't improve or don't improve quickly enough!

So, you cannot keep up with the minimum payments due....

                           What can you do?

Credit Card companies will start to send you letters and make calls...lots of them!

They are trying to get you to start making payments again.

They will usually do this for 4-6 months and if no repayment arrangements can be set up, then they will either hire a collection agency or sell the account to a debt buyer.

Yes there is a billion dollar market of companies who buy older debt accounts for pennies on the dollar in order to try an collect for profit. 

Perfectly legal and it happens more than most people realize!

At some point in all of this, you may get a letter or email making you a SETTLEMENT OFFER. 

The offer may be for 20% - 40% or more of a reduction pf the inflated balance...

Don't forget late fees, over-the-limit fees and of course HIGH INTERST RATES.

But, dealing with a collector or the recovery department of a creditor can be very frustrating!

Most of the time these settlement offers come with a short time frame in order to make the settlement offer.

It is possible to get a good settlement with a monthly repayment plan that does not add more interest or fees.

For example, we settled a US Bank account for one of our clients recently:

Balance was               $ 13,799.86

Settlement for             $    5,519.94

Difference of               $    8,279.92

Since this client did not have the total needed for a lump sum payment, we were able to negotiate a series of 24 payments (NO ADDED INTEREST)!

   Click to see the actual settlement.

Some settlements are a little more or less, depending on a number of circumstances, but this will give you an idea of what a settlement looks like.

I hope this was helpful.

Personalized  Program Comparison Click here!


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Don't Ignore Debt Collection Letters!

If you are having a difficult time keeping up with the minimum payments due on your credit cards or other unsecured debt, you are going to start receiving calls and letters from collectors!


These calls and letters are upsetting and cause stress and fear.

Most likely, you've never been in this situation before and feel helpless and...yes...afraid.

If this is you, then this blog will help!


The worst mistake you can make after receiving a call or letter is to "just ignore" it!

When we open a credit card account (or any other unsecured account), we are signing an agreement/contract that basically says that we agree to the terms the terms of the contract.

If we do not make the required payments when due, then we have broken our promise and the creditor has a right to contact you.

What can you do?

If you can afford to catch up and get back on track, then great, just send the balance due and start making regular minimum payments.

The problem is that most people who find themselves in a stressful financial situation just cannot do this!

There are several reasons you may have gotten into trouble:

  • Unemployment
  • Divorce
  • Serious Illness or Disability
  • Trying to make it on a fixed income of Social Security or Retirement Income
  • Or other reasons beyond your control

So, if you cannot get caught up and start making the minimum payments due, what options do you have?

Debt Management Program

These used to be called "Credit Counseling".

Basically in the Debt Management or Credit Counseling program, you will make a monthly payment to the company.

The past due balances, fees and interest rates will be modified, but you will end up repaying what you borrowed/charged.

The problem with these types of programs is that the monthly payment is about the same (sometimes a little more) than the previous minimum payment was!

If you can handle this...great!

If not, then you should consider a:

Debt Settlement Program

After 3-4 months of non-payment on your account, the account will most likely be transferred or sold to:

  • Internal Recovery Department of the creditor
  • Debt Collection Agency
  • Law Firm/Debt Collector
  • Purchased by a Debt Buyer

At this point, the Collector may be willing to accept a reduced amount called a settlement.

These can be as much as 40% - 80% of the balance, depending on several factors.

Here's a couple of examples:

In a Debt Settlement Program, you will be making a monthly deposit (that you can afford) to a Settlement Savings Fund.

As this fund grows, the company will negotiate with the creditor, collector or attorneys for a settlement agreement.

By the way, there are many so-called Debt Settlement Companies that are NOT registered with the state and violate the laws of what they can charge, etc.


BBB        A+        Accredited Click here!


If a settlement cannot be negotiated, then there is the possibility that the creditor or owner of the account my decide to retain an attorney in order to start legal action.



First, you will get a SUMMONS. 

The summons legal document stating that the Plaintiff (creditor) has made a legal CLAIM that you (the DEFENDENT) have not met the agreements of the contract.

It will basically say that if you cannot PROVE that you do not owe the CLAIM within 30 days (varies from state-to-state) and submit to the court your Proof called an "ANSWER", then the Plaintiff may petition the court for a DEFAULT JUDGMENT.

If this happens, then the attorney for the plaintiff can petition the court to issue a writ of garnishment or bank levy!

Certain assets and income are exempt, but you have to be very careful!

The point of this is...


Yes, even if you have a judgment awarded against you, there are ways to stop wage or bank garnishments, but prevention is the best way!

What if you cannot afford a Debt Management Program or a Debt Settlement Program...

Then you may have to consider Bankruptcy.

If you have a wage garnishment awarded, your employer will be legally obligated to send 25% (may be different in some states) of you net, after-tax income to the creditor!

Think about that...

Let's say your take-home, after-tax income is $5000/month.

If you are garnished, your employer would send $1,250 to the creditor per the garnishment order, leaving you only $3750 to pay all your bills!

A Bankruptcy attorney may be able to help.

Check around and interview several.

There should be "no charge" for the initial consultation.


If you're in a financial situation where you just can't keep up, DON'T "BURY YOUR HEAD IN THE SAND", reach out for help/options:

Personalized  Program Comparison Click here!


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Tags: best way to eliminate credit card debt, oregon wage garnishment, how to pay off credit card debt, making just the minimum payments