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

Now what?I received a summons


  • You are not going to jail!
  • You most likely (about 99.9% of the time), will not go to court!
  • They are not going to come take all of your belongings!


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

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

When a creditor cannot get a consumer to pay as agreed they may choose to start legal action in order to collect the debt.

A CLAIM will be filed in the county court where you reside.

Then, you will receive a SUMMONS. This is usually hand delivered.

The summons will state something to the effect that you have 20 or 30 days after receipt of the summons to APPEAR IN COURT TO ANSWER THE CLAIM.

An ANSWER is your side of the story if you feel you do not owe the amount of the claim.

Now, just because you don't like the additional interest, late fees and now court costs that have been added to the claim doesn't matter!

So, if you owe the debt, there is no reason to spend the time or money for an answer and NO, YOU DO NOT NEED TO GO TO COURT.



If you are employed  and receive normal W-2 wages(not self-employed, we’ll  get to that later), then you should try to work out a repayment plan so that they don't proceed with legal action.

The Plaintiff is the Creditor and since the collection agency failed to get some kind of payment or repayment plan from you has decided to take the legal route in order to force your hand.

And, IT WORKS! You might have ignored the letters and calls up until now, but now they have your attention!

If a repayment plan cannot be agreed upon, then the creditor may decide to go ahead and apply for a court date.

They will win the judgment in favor of the plaintiff by default, as there is no need for you to show up as you have no defense…you owe the debt!

With a judgment entered in favor of the plaintiff, they can now seek to:

  • Garnish your wages or
  • Levy you bank account

But again, DON’T PANIC!

A wage garnishment is usually 25% of you net take-home pay, and your employer has no choice but to comply with the court order.

For most people, losing 25% more of your income would be devastating, and you would have to seek bankruptcy protection (Chapter 7 or 13).

But hold on… there is another option:

Most creditors will agree to a STIPULATED AGREEMENT.

It is an agreement (sometimes filed with the court) whereby you agree to pay $XXX.00 per  month until the entire balance (including court costs, attorney fees and back interest) is paid-in-full.

If you can and do get such an agreement, GET IN WRITING before sending any funds!

If you have a source of funds available (401(k), family, friends) so that you could get around 50% of the balance all at once, the creditor may accept that and close the claim.

Once again, GET IN WRITING before sending any funds!



Certain forms of income are exempt from wage garnishment:

  • Unemployment income
  • Social Security or Pension income
  • Disability income
  • Child support
  • And in most states, net income

For more information about wage garnishment, visit: US DEPARTMENT OF LABOR.

If all of this is a little intimidating, you may need our help. We have been helping our clients settle accounts and avoid wage or bank garnishment for over 8 years and have the experience that you may need.

For a FREE, NO OBLIGATION review of your situation, click here.

 received a summons



Tags: wage garnishment, summons, stipulated agreements

Oregon Wage Garnishment

If you receive a wage garnishment, knowing your rights may saveoregon wage garnishment you hundreds of dollars!

It is a common misconception that a creditor can automatically garnish your wages if you fail to pay your debts!

If a debt collector is unsuccessful in collecting for unpaid debts, they may decide to file a claim in your local county court.

You would receive a SUMMONS, which is usually hand delivered to you.

The summons basically states that you have 20-30 days (varies by state) to "answer" the claim.  An answer is what you would do if you disputed the claim.  To file an answer will usually cost you a court fee and is a waste of time and money if you owe the debt.

If you do not contact the collector and arrange a repayment plan, usually called a STIPULATED AGREEMENT, then a court date is set and the creditor or PLAINTIFF will be awarded a DEFAULT JUDGEMENT.

In other words, the creditor wins the judgment by default because there was no reason for you to contest the claim since you owe the debt.

So now that the creditor has the judgment, what can the creditor do?

If you have a job and earn normal, W-2 income, your creditor can apply for a WRIT OF GARNISHMENT. This will be sent to your employer and the employer has no choice but to comply with the WRIT.

DON'T PANIC! There are several sources of income that are exempt from garnishment:

If you receive any of the following types of income, they are exempt from wage garnishment:

  • Social Security benefits
  • Supplemental Security Income (SSI)
  • Welfare or public assistance
  • Spousal support or child support
  • Public or private pensions
  • Veterans benefits and/or loans
  • Disability proceeds of life insurance policies
  • Cash surrender value of life insurance policies
  • and many others

For a complete listing see Oregon Garnishment Forms.

If you are working, only a certain amount of your W-2 income can be garnished.  Here's an example:

Let's say you earn $15 per hour and work 40 hours per week.

1.  Gross wages for this period (example 2 weeks):

     $15 x 80 hours =                                     $1200

2.  Total deductions withheld by law                $ 360

3.  Net Disposable Wage (2-1)                        $ 840

4.  Normal exemption (OR 75% of line 3)          $ 630

5.  Minimum exemption (OR $435 for 2 wks)      $ 435

6.  Greater of line 4 or 5 = exempt wages          $ 630

7.  Nonexempt wages (6-3)                             $ 210

In this example, $210 would be withheld from your BI-Weekly check to satisfy the garnishment until the entire amount of the debt is repaid!

In Oregon (and every other state has similar exemptions), you can use the WAGE EXEMPTIONS CALCULATION WORKSHEET to determine how much can be garnished.

If you are SELF EMPLOYED, receiving 1099 or commission income, is is unlikely that an attempt of wage garnishment by a collector will be successful.

Click below for FREE INFORMATION

How to Stop Wage Garnishment

How to Eliminate Your Debt for Less

How to Stop Collection Calls

If you have questions or would like more information, please give us a call!


Tags: debt collection, summons, stipulated agreements, oregon wage garnishment

I received a summons. What can I do?

credit card help

HELP! I received a summons for my credit card.

What can I do?

First, don't panic! 

  • You are not going to jail
  • You most likely will not have to go to court
  • If this was an unsecured debt, no one is going to come take your personal property
  • The creditor is not going to garnish your wages...unless you ignore the summons
  • For the time being, your bank account is OK

OK, so now what?

Somewhere on the first part of the summons it will tell you that you have 20 or 30 days from receipt of the summons to ANSWER the complaint.

To answer means that you file a reply with the court explaining why you don't owe the debt, THAT IS, IF YOU DISPUTE THE DEBT.

But in this case, you owe it, you just don't have enough money to make the payments.  To answer DOES NOT mean to explain why you are in a hardship position, financially.  So don't waste your time or money filing an answer.

Instead, contact the attorney who filed the claim for the creditor.  Ignoring the summons is not a good idea!

But before you do, take time to write down all of your net income and expenses so that you will be able to explain why you cannot keep up with the payments at this time.

It might be helpful to use a basic household budget. 

For a free copy, click here.

If you had about 50% of the balance somewhere, you could make a settlement offer and most likely they would accept it.

But, most people do not have that kind of money available or they wouldn't be in trouble in the first place!

So, let's say that your minimum payment was supposed to be $125, but you can only realistically afford $50.

Offer to pay $50/month if they will stop the interest and finance charges.

If the monthly interest and other charges (late fees, over-the-limit fees, etc.) are more than $50/month, it doesn't make sense to send them $50.  You wouldn't get anywhere!

If they accept the offer (most likely will come back at you with a counter offer), MAKE SURE TO GET IT IN WRITING.

This is critical to protect you in the future.  Many people agree with a service person, authorize a check-by-phone, make several payments, and when the check on the account, find out that nothing from the original account agreement was modified.


Once the agreement is set, do not miss a scheduled payment.  This is usually grounds for voiding the agreement and you are back to square-one!

If you can't afford anything, then you may want to consider bankruptcy protection.

Although bankruptcy should be your last option, it is not the end of the world.

Seek the advice of a bankruptcy attorney (one who specializes in bankruptcy) before proceeding.

You may also want to consider other options such as Debt Management or Debt Settlement.


Be proactive and most likely, you'll work something out.



Tags: wage garnishment, debt relief solutions, summons, alternatives to bankruptcy, stipulated agreements

Stop Wage Garnishment!

I need your helpHELP! They took money out of my paycheck and I can't pay my rent!

Debt collectors have the right to file a claim for an unpaid account or loan.

Once they have been awarded a judgment, they can apply for a writ of garnishment.

Although the amount of money they can take from your paycheck varies from state-to-state, it is usually about 25% of your net take-home per paycheck until the entire debt is repaid!

For most people, this would spell DISASTER

It is hard enough paying the bills without losing an additional 25% of your income.

What can you do if you have received a wage garnishment?

Take a few minutes to complete an accurate personal budget that lists your total net income and all of your bills.

Write a brief account of why you are in a financial hardship.  Don't be too long or brief and simply state the facts. 

Make sure to state that if an alternate agreement to the wage garnishment cannot be set up, then you will have to consult a bankruptcy attorney for protection.

Contact the attorney or collection agency that initiated the claim. They will probably ask for the budget and hardship statement before considering an agreement.

In most cases, they will be willing to work out a Stipulated Agreement, whereby you agree to repay the debt at a monthly amount your budget can reasonably handle.

GET IT IN WRITING!  Do not agree to a check-by-phone or any other method of payment without the agreement.

The agreement should specifically state the terms, interest rate (each state sets a maximum rate that can be charged) and the exact dates the payments is due in their office.

Once you have the agreement, make sure that you make your payments on time!  Failure to meet the due date will usually void the agreement!

Negotiating agreements and dealing with collectors/attorneys can be very difficult and time consuming.  You may find it is worthwhile to consult a qualified debt management company.


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Tags: wage garnishment, debt settlement, debt elimination without bankrupcy, stipulated agreements

What Can I Do to Prevent a Wage Garnishment?

help stop wage garnismentA collector threatens you with a possible wage garnishment.

What can you do?

Let's say you receive a call from a collector, and he says that unless you send money right away, then they will start the litigation process to sue you.  A little scary, right?

Of course, that's why they do it! Their job is to collect money from you, and they will use most any tactic possible, especially intimidation.

I won't get into what the collector, legally can and cannot do in this article. You can read more about that in previous posts. Let's focus on what you can do to prevent this.

For more information, visit the FDCPA Guide for Consumers.

Tell the agent you need a couple of days to raise the cash (even if there is "no-way") and get a phone number to call back.  This will stall them from moving forward.

By the way, don't be surprised if they tell you they can't wait and that they need a down payment right now using check-by-phone or else they will start the litigation process.

Again... this is their way of trying to INTIMIDATE you.

Get their phone number and hang up the phone!

I am going to assume you do not have a large sum of cash to make a lump sum offer to settle.  (If you had a large sum, you probably wouldn't be in this situation!) It is very important that you know how much money you can afford each month before you make a repayment offer. 

Take the time to complete a detailed Budget so you can know exactly how much is coming in and how much is going out each month.

The goal is to arrange a settlement for less than the full amount paid out monthly with payments you can afford.  You may not get a huge reduction (maybe down to 75%-80%), but its worth asking.

Once an agreement has been negotiated, make sure you get the agreement in writing...PERIOD!  No written agreement...No deal! If you cannot get the agent to agree, ask for the supervisor.  You may not have any better luck, but it's worth a try.

Most creditors would much rather agree to a settlement repayment plan rather than being forced to go through the litigation proccess.

  • DON'T be intimidated
  • Know what you CAN afford to pay monthly
  • Get the agreement IN WRITING
  • Prevent any judgment/litigation

Hope this helps!

Prevent Wage Garnishment


 Photo by Caston Corporate

Tags: fair debt collection practices act, debt collection harassment, wage garnishment, common collection practices, stipulated agreements

Are Stipulated Agreements a good deal?

If a judgment has been entered against you for a delinquent, unsecured debt, you may be offered a stipulated agreement.

What should I do?

Are Stiplated Agreements a good deal?

It depends.  When you signed up for your credit card or took out an unsecurred loan, you agreed to the terms and will be held accountable if you don't pay.

Most creditors will try several tactics to get you to repay what you owe, but if unsuccessful, they may decide to file a complaint in your local county court.

You'll receive a summons and since you owe the money, there is really no reason to answer (respond) or appear to explain yourself.

The creditor (the plaintiff) will be awarded a default judgment in the future if you do not arrange a plan to repay the debt you owe.

With the judgment in the creditor's favor, they can now seek:

  • to garnish your wages or
  • levy your bank account

But before they do, they would most likely agree to a stipulated agreement, whereby you agree to repay all or a portion of the debt owed.

Each state has a maximum interest rate that can be charged during a stipulated agreement.  In many cases you should be able to negotiate a 0% rate.

A Stipulated Agreement is not a bad deal if:

  • you currently receive W-2 income from your employer or
  • if you usually keep a substantial amount of fund in your bank account

In a wage garnishment, an employer would be forced to deduct an average of 25% of your net take home pay each pay period!

For most people, this would prevent them from paying the important bills like the mortgage or rent, food, utilities, etc.

So, by accepting a stipulated agreement for a lot less than the wage garnishment would be might be in your best interest.


  • If you are retired and receiving a pension or Social Security, these funds are exempt from garnishment.
  • If you are receiving unemloyment income, these funds are exempt.
  • If you are disabled and receiving Disability Income, these funds are exempt.
  • If you are self-employed, it is very difficult for a wage garnishment to be enforced as most self-employed people take a very small "income" and in most states, this would be exempt from wage garnishment.

In those cases, you would NOT agree to a stipulated agreement but should negotiate a settlement, usually a a substantially reduced amount.

Before accepting a stipulated agreement, you should seek the advice of a debt management or debt settlement specialist.

In most cases, a settlement agreement can be negotiated before the creditor decides to seek legal action.

A stipulated agreement should only be considered if all other options have been exhausted.


Tags: debt relief programs, common collection practices, stipulated agreements, debt consolidation vs. debt settlement