Information regarding debt judgements reported by credit card co

I have 3 civil judgments against me from credit card companies. What is the best way to settle as I am unable to pay the full amounts.

I have 3 civil judgments against me from credit card companies. What is the best way to settle as I am unable to pay the full amounts?

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Bill's Answer
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You have some options, including:

  1. Settling on the amount owed behind the judgments (necessitating a lump sum),
  2. Setting up a payment plan directly with the law firms (called a stipulated judgment), or
  3. Letting the creditors apply the judgments with a lien, levy or garnishment, or
  4. Filing bankruptcy.

Find an attorney to represent you in this matter. If you do not already have a regular attorney, contact your state or country Bar Association's attorney referral service to help you find an attorney in your area who should be able to assist you. I cannot say specifically what action you should take in regard to the judgment entered against you, as I do not know all of the details of the case. Generally speaking, when a party to a lawsuit fails to appear at a hearing, the court will enter a default judgment against the party which failed to appear.

When entering a default judgment, the court generally does not consider the facts of the case; rather, it simply assumes that you owe what is demanded in the complaint based on the fact that you did not appear to defend yourself. Thankfully, courts will sometimes set aside default judgments if a defendant can show that he or she had a good reason for not appearing at the previous court hearing. In addition, if you can show that you have a strong defense to the original claim, the likelihood of having the judgment set aside should increase. The only way to determine your chances of prevailing in this case is to consult with an attorney to discuss the details of your case. I suspect that your attorney will file a motion to set aside the default judgment entered against you; however, your attorney may find another strategy better suited to the specifics of your case, so it is imperative that you consult with an attorney as soon as possible to discuss ways to resolve this judgment.

If after consulting with an attorney, you find that you cannot resolve this debt through the courts, you may want to consider alternatives to resolving the judgment, such as negotiating a lump-sum settlement or a repayment plan with the creditor. You or your attorney will need to contact the creditor, or the creditor's attorney, to discuss repayment options available to you. You should also discuss your state's exemption laws regarding the enforcement of judgments. Depending on your state, the source of your funds, and several other factors, your bank account, wages, or other property may be exempt from creditor execution. Your attorney may need to file requests for exemption with the court, so make sure that you consult with your attorney as soon as possible to help you resolve this situation.

You can also speak with a qualified bankruptcy attorney to discuss the relief available to you in bankruptcy. You can search for a American Bankruptcy Institute certified attorney in your area by visiting the ABC World Web site.

Consulting with an attorney does not mean you are going to file bankruptcy, but it will help you better understand the options available to you in case other solutions I mentioned above do not work out. For more information about bankruptcy, I invite you to visit the Bills.com Bankruptcy Information page.

An qualified bankruptcy attorney should also be able to carefully analyze each aspect of your financial situation to advise what non-bankruptcy solutions may help you.

Depending on your income and amount of debt, one of the several options I have described above may be able to help you. I encourage you to explore the Bills.com Debt Help page to read more about these and other options available to you.

Watch some Bills.com online videos about consumer finance topics.

I hope this information helps you Find. Learn. Save.

Good Luck,

Bill

Bills.com

29 Comments

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  • 35x35
    May, 2010
    Bill
    Generally speaking when it comes to levy (sometimes called attachment or garnishment depending on the state), joint accounts are fair game to judgment-creditors. In non-community property states, a spouse's separate account is off-limits. In community property states, judgment-creditors have the right to receive a judgment from a spouse. However, it is rare, in my experience for them to do so. Regarding you question, if you open a separate financial account, there is a high probability it will be safe from levy. In what state the institution is located is irrelevant.
    0 Votes

  • 35x35
    May, 2010
    D.
    My wife has a judgement against her for unpaid credit card debt. I was an authorized user on the account however the judgement only had her name on it. We are in Arizona and it is a community property state. So, if I have a bank account without her name on it, are they allowed to garnish from that bank account. They already took money out of our joint account. Also, if I opened an account in another state that was not a community property state, would they be able to get to it?
    0 Votes

  • 35x35
    Jun, 2009
    Mike
    I am tired of credit card companies trying to abuse good customers to make up for giving money to bad customers. I appreciate what you are saying about trying to avoid the situation but I am sick and tired of seeing companies going bankrupt and thereby avoiding their debts. Every day the government is giving away money to businesses because they are "too big" to be allowed to fail. Maybe the plan for me should be to go even deeper in debt so the credit card companies will think I am "too big" or I owe them too much money to allow me to default. As far as ever moving and therefore needing a credit check for apartment renting, etc., I have 15 years left on the mortgage on my house, I am a school teacher and lived in NC all of my life and so won't be moving. I am assuming I can use a debit card for everything as opposed to a credit card. Therefore, unless someone points out a larger problem I'll incur other than a poor FICO score and a little harassment from the creditors, not paying the credit card bills does not seem to be too bad of an option at this point. Instead of paying off the $50,000 I'll put the payments in my retirement plan.
    0 Votes

  • 35x35
    Jun, 2009
    Mark
    Before I offer my thoughts I want to encourage readers to weigh in with their thoughts on Mike's idea. I think you're heading in the wrong direction for several reasons. First, no one knows what the future holds. You may be settled in NC now, but you may have an opportunity elsewhere and move to a different state with different laws (I have not researched NC's debt laws, so I'll assume your interpretation is accurate). You may move within your state and need a credit check as a condition of renting an apartment. You may need to rent a car. You may go on vacation and not want to carry a large amount of cash. You may face an emergency where having a functioning credit card may make your life easier. Before you commit FICO suicide, consider debt consolidation http://www.bills.com/consolidate-all-bills/ and debt negotiation and settlement http://www.bills.com/debt-negotiation-and-settlement/ Make a plan for handling your debt, work the plan, and any reduction in your credit score will be far less severe than putting your head in the sand.
    0 Votes

  • 35x35
    Jun, 2009
    Mike
    I owe +$50,000 in credit card debt but have a good credit score because I have always paid on time. Recently, however, several companies have doubled my required minimum payments and I may be unable to handle the increase. What are all of the repercussions if I decide to stop making the payments? I live in North Carolina and I understand that garnishment for credit card balances is not lawful; therefore, assuming I do not "need" credit for the next ten years, what is the downside to not paying? In fact if I quit paying my credit card payments, I won't need any credit.
    0 Votes

  • 35x35
    May, 2009
    Bill
    The out of state company would first have to get a judgment in their state and then would have to domesticate it in the state/county where you live.
    0 Votes

  • 35x35
    May, 2009
    alberto
    If i live in colorado and if a company out of state files a debt judgement would court be in colorado or in the state of company filing judgement ?
    0 Votes

  • 35x35
    Apr, 2009
    Soumya
    Virginia does not appear to be a community property state, so I don't think your wife will be held responsible as long as she is not a joint account holder or an authorized user on any of these accounts. See http://www.bills.com/collection-laws/.
    0 Votes

  • 35x35
    Apr, 2009
    Farmer
    I live in Virginia and incurred credit card debt on two different credit cards. I have no job and my business has gone under. My question is, can these companies include or hold my wife responsible for these debts? The credit cards are in my name only. She is the only working in our household and it takes what she makes to pay our monthly bills. Can they garnish her wages? Take our truck, which is the only thing paid for and is in her name? I wish I knew.
    0 Votes

  • 35x35
    Apr, 2009
    Sam
    I have spoken with a close friend who is an Alabama bankruptcy attorney, and he advised me that the Alabama DMV should be willing to reinstate your driver's license if the judgment against you is discharged in bankruptcy. You should know that my source has not practiced law in Alabama for several years, so I encourage you to confirm this information with a currently practicing AL attorney before you make a final decision about filing bankruptcy. I wish you the best of luck in resolving this judgment!
    0 Votes

  • 35x35
    Apr, 2009
    Craig
    I was invovled in an auto accident that was my fault and did not have insurance at the time. Since the accident the insurance company sued me and put a lien on my drivers license. In order to get my license back, they say I have to pay this judgement which went from $31,000 to over $41,000 in a year. Can bancruptcy by filed in this case. I live in Alabama.
    0 Votes

  • 35x35
    Mar, 2009
    Bill
    Linda - if you see a judgment on your credit report, then the matter has already gone to court and the creditor has got a judgment against you. It is not going to automatically fall off. Judgments are different from regular debts, if they are not fully paid the creditor who got the judgment can renew it so that it stays on your credit report. It does not matter which state you live in, once a judgment is passed you are responsible to pay the amount that was ordered by the court. I strongly suggest that you contact the the company in question and try to resolve the matter by way of a payment arrangement.
    0 Votes

  • 35x35
    Mar, 2009
    Linda
    I have a judgement against me of which I didn't know of until today. The last I talked to them said they would take me to court. It was done in Mass 2006 and I have lived in Ca since jan 2005 can I do anything now amount is $2100. I have 4 yrs left before it can come off I think 7 yrs
    0 Votes

  • 35x35
    Feb, 2009
    Sam
    Texas offers extensive protections to consumers who have judgments against them. First, wages cannot be garnished in Texas for the enforcement of judgments on consumer debt--wages in TX can generally only be garnished for delinquent taxes, child support, alimony, etc., but certainly not for credit card debt. In addition, Texas law exempts your primary residence (your homestead) from forced sale by judgment creditors, so your home is not at risk as a result of this judgment. It is possible that the creditor could try to levy your bank account; however, from my experience, it is rare for judgment holders to try to take such action because the process is difficult and can result in liability for the creditor if done improperly. My point is that if you stop making payments on this debt, there is probably very little that the creditor can do to enforce it. I would encourage you to pay it when you can so that the judgment does not haunt you indefinitely. Also, interest is probably being charged on the judgment balance, so you should try to pay it as soon as you can to prevent the balance from continuing to increase. As for the "promise to pay," it does not change your rights and exemptions under Texas law, so your inability to make these payments should not result in any additional problems. Keep in mind that I am not an attorney, and that I do not know all of the details of your financial situation. I encourage you to consult with an attorney licensed in Texas to make sure that your decision to stop paying this debt will not result in any unexpected ill consequences.
    0 Votes

  • 35x35
    Feb, 2009
    knight
    I had a credit card default judgement from a collection agency in 6/2008 and they talked me into signing a promise to pay monthley until the full balance is paid. Can they hold me to that agreement I am unable to pay it and don't know how to handle this.I have no money no job and only have my homestead I live in tx.
    0 Votes

  • 35x35
    Feb, 2009
    Bill
    That really depends on whether you had a signed promissory note when you lent the money. Without a signed document it becomes harder to prove a court that you actually did lend the money. If you do have the paperwork, you should consult with an attorney to see if it is a viable proposition.
    0 Votes

  • 35x35
    Feb, 2009
    Shirley
    In 2007, I loaned my niece and her husband money to keep up with their mortgage. They have since divorced and the debt was awarded to the husban in the dissolution of marriage. It is an usecured note. Since I am on a fixed income, my last correspondence to him requested payment in 15 days. He still has'nt contacted me for payment. Can I file a judgement and, if so, how? Thank you
    0 Votes

  • 35x35
    Feb, 2009
    Bill
    Retirement income is exempt form bankruptcy. If you are eligible for a tax refund, then the creditors might be able to get a hold of it, but that depends on the terms of the judgment that they recieved. You can read more about bankruptcy at http://www.bills.com/bankruptcy/.
    0 Votes

  • 35x35
    Feb, 2009
    c
    We had purchased a motorhome back in 98 when times were better. In 2002 my husband was laid off from a job of almost 20 years. We survived a couple of extra years because prior to this happening we refied our house and had an extra 15k loan. This kept us afloat during that 2 year unemployment. We were down to 0 when he finally found a job. By that time all that we had carried came tumbling down. We almost lost the house but thankfully the bank worked out something more manageable. The motorhome a 2 of the top credit cards now about 65-70k have just about buried us. I haven't paid them in the last 2-3 years. The motorhome has a judgement on us and stopped us at the bank. I don't I have this motorhome anymore as I had it towed away one day. The credit cards are also trying to go judgement. Where does this leave you at tax time? Can they take anything you MAY get back? I don't have medical insurance as it would cost more than I can afford, yet they tell me my husband makes too much. What hurt us was my son became of age so he no longer counts as part of the family. Bankruptcy is in our future but it scares me. Can they go after life insurance, 401k's or anything if you may have it?
    0 Votes

  • 35x35
    Mar, 2008
    Jeff
    I have a debt that was borrowed 3 years ago. The person told me over and over to not worry about the repayment. Now since I divorced his daughter he want payment in full or he told me we are going to court. He accepted payments before but will not now. I don't have the ability to pay in full but I can make payments. Can he sue? I live in Texas.
    0 Votes

  • 35x35
    Mar, 2008
    Bill
    If you signed a promissory note when the money was loaned to you, then the person that lent you the money has the right to sue you. I am not an attorney, so I would suggest that you take the opinion of a qualified attorney to look at your recourses. Even if he does sue, you can state the facts in court and then the judge will decide on the payment terms.
    0 Votes

  • 35x35
    Oct, 2007
    Brads
    You do have rights, but I would highly suggest meeting with an attorney. IF you were meeting the terms of your stipulated judgment... then they should not have garnished your husbands wages (that is exactly what a stip is for). BUT, i do not know enough about the situation, so i might make sense for you to contact a local attorney (maybe a bankruptcy attorney can review all of your options, including bk). Good luck.
    0 Votes

  • 35x35
    Oct, 2007
    stephani
    We have judgement against us for unpaid rent. I did go to court and their was a stipulated judgement, as we can to an agreement. I thought they were going to take the money out of our deposit. Now, they are garnishing my hubands wages. I still have two kids at home and one in college at BU. How can I fix this. The women at the collection agency is evil and mean. Do I have any right?
    0 Votes

  • 35x35
    Oct, 2007
    Chuck
    Iam in Texas..I have no earned wages as i am on Social Security disability and parial pension..I have heared that they are exempt income and cannot be touched in your bank account...No other income...is this judgement proof....Also i have 50 percent interest in my house...The owner gave it to me and was documented at the couthouse...Can the collection ageny get a judgement...there is hearing...I responded earlier at the couthouse to this matter and informed the court and the attorney for the collection ageny about the exempt income...Thank you Chuck Smith...There is a hearing set.
    0 Votes

  • 35x35
    Oct, 2007
    Nathan
    Honestly, I do not know enough about the details of your financial situation to tell you whether or not you are "judgment proof." In order to determine your vulnerability to creditor action to enforce a judgment against you, I encourage you to consult with an attorney licensed to practice law in Texas. You can obtain a referral to an attorney in your area by visiting the Texas Bar Association website at http://www.texasbar.com. Generally speaking, judgments are more difficult to enforce in Texas than in most other states, due to the fact that Texans' wages are exempt from garnishment for most judgments (with the exception of taxes, child support, and certain other debts). Social Security and pension payments are also generally exempt from creditor attachment. In addition, Texas law provides a 100% homestead exemption for property used as a primary residence; there are exceptions to this rule, as well as requirements to claim it, so again, you should consider consulting with an attorney to discuss your situation. To learn more about the exemptions offered in Texas, you can visit http://www.bcsalliance.com/debt1_texas.html. Based on the information provided in your question, you very well may be "judgment proof," but you should speak with a qualified professional to make sure you are not making incorrect assumptions about your financial status.
    0 Votes

  • 35x35
    Jan, 2008
    timothyv
    That is incorrect. If you are making payments to one creditor on a stipulated payment for a judgment, then another creditor is certainly allowed to come in and obtain a new judgment and then apply that in a garnishment. If you are tight on cash, you could simply stop paying the stipulated payments and let the creditors fight for the garnishment limitations in your state (in California, for example, they can not garnish more than 25% of your paycheck). or, seek bankruptcy counsel.
    0 Votes

  • 35x35
    Jan, 2008
    Heather
    I think you misunderstood me. We have a stipulated judgement through one company. However another company/collection agency put out a garnishment for payments. We were told by the company with the stipulated judgement that the other company should not have been able to garnish the wages due to the stipulated judgement. Is this correct?
    0 Votes

  • 35x35
    Jan, 2008
    timothyv
    Typically, a stipulated judgment means that you 'stipulate' that you will make payments on your debt in lieu of the creditor enforcing the judgment. Most times, if you are making your agreed upon payments on time then the creditor will not enforce the judgement or pursue garnishment. In your case, either you have not been making the payments or the collection agency mistakenly is garnishing you in addition to the stip. Just call the agency and ask them to remove the garnishment and then go back to making the payments... or you could have your husband quit his job!
    0 Votes

  • 35x35
    Jan, 2008
    Heather
    We have a stipulated judgement through one company. Well a collection agency put a judgement garnishment through and now my husbands checks are being garnished. I was told by the company with the stipulated judgement, that the collection agency shouldn't have garnished the wages due to this stipulated judgement. Is that correct and if so, what can I do to stop the garnishment?
    0 Votes