I recently decided to seek help though a debt settlement co. Now I have been sued because they didn't contact anyone. Can you
I have always paid my bills and all of my ex-husband's to avoid bankruptcy. I could never collect on a judgment against him and raised his child by myself. I have struggled for 20 years and recently decided to seek help though a debt settlement co. Now I have been sued because they took 4,000 as maintenance and didn't contact anyone because my account doesn't have enough money to settle the cards. Now my credit is destroyed even though I have remained current with home and car. I have no one to lend me $23,000 to fully fund this so they will settle the rest of my cards. Is there anywhere that you know I can turn to borrow the money?
The nature of debt settlement, in which you stop making monthly payments to your creditors, sometimes leads to problems like the one you are describing. From the information I have gathered from several settlement firms and other sources, it is uncommon for a person enrolled with a debt settlement firm to be sued. However those few that are sued can find themselves in a tough spot.
My first recommendation would be to discuss this situation with your debt settlement firm and see what they recommend. Many reputable debt settlement firms have knowledgeable staff that may be able to help you resolve this problem. If you feel that you settlement firm is not pointing you in the right direction, two possible solutions come to mind. First, if you own your home and have equity in it, you could possibly refinance or take out a home equity loan to repay this debt.
You can apply with Bills.com's approved mortgage providers.
In fact, your debt settlement firm may still be able to negotiate a reduced balance settlement on the debt if you can raise the funds through a home loan. Since you are enrolled in debt settlement, your credit score has probably suffered, and you will probably not qualify for the best mortgage rates, but when you consider how much money you may be saving in future interest and a reduction in the current principal, a home loan may make good financial sense. Again, I recommend that you coordinate any loan with your debt settlement firm to make sure that they are able to negotiate the best possible settlement terms for you.
If you do not own a home against which you can borrow, you may want to negotiate a payment arrangement with the creditor that has sued you. Some debt settlement firms will negotiate payment plans for you, while other will not, so check with you settlement firm if they can help you with this. If they cannot, you can still do it on your own. Basically, you need to call the law firm handling your account and explain your financial difficulties to them. Make them an offer, say $400 per month, to stop the lawsuit against you. Make sure any agreement you reach with the law firm is in writing; you do not want this to become a problem again once you think you have it resolved. The law firm will probably want you to sign a document called a ?consent judgment? stating that they will have a judgment against you, but as long as you make your payments, they will not try to enforce it. Once you set up a payment plan with the law firm, you can focus your energies on resolving any other debts you may have outstanding.
I hope that one of the two solutions I have discussed above will help your situation, and will help you Find. Learn. Save.
Best,
Bill
www.bills.com
Dealing with debt
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in Utah, 19% have any kind of debt in collections and the median debt in collections is $1943. Medical debt is common and 12% have that in collections. The median medical debt in collections is $980.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.
