I took out a HSBC loan about 13 years ago for $4000.00. I got behind on payments and I am a single mother working 2 jobs, living pay check to pay check. They have turned this over to a law firm for collection. The law firm called and said the amount is now $7000.00. They asked if I wanted to pay the balance, half of it, or make a down payment and then $250.00 per month after. I offered $100.00 monthly, and they did not accept. He then said that If I can not pay, my wages would be garnished. Can they do this to me? Please help.
In almost all cases involving non-governmental debts, a creditor must file a lawsuit against the debtor and obtain a judgment before the debtor’s wages can be garnished. In addition, the lawsuit usually must be filed in the county where the debtor currently lives, where the debtor lived at the time the account was opened, or where the contract creating the debt was physically signed. There are two primary ways a judgment can be issued. First, if you fail to respond to a lawsuit that has been filed against you, the court will likely issue a "default judgment" against you. Second, if you respond to the lawsuit, but the judge thinks you owe the money based on the evidence, he can issue a judgment against you.
Before I go into more detail, if you want a free debt consultation to help you deal with these debt problems and the attorney collections, you can apply with one of Bill's approved debt help partners.
Once a creditor has obtained a judgment against you, it can request that the court order your employer to withhold a certain portion of your wages to repay the judgment. The amount of your wages that can be withheld varies by state, but no state allows more that 25% of a debtor’s net wages to be garnished to repay a judgment. If you are sued by a creditor, you should retain an attorney in your area to protect your interests.
The threats that you describe in your question are a common technique employed by collectors to intimidate debtors. If the collector contacting you is not a law firm licensed to practice law in your state, the collector may be breaking the law by threatening to garnish your wages. Because collection agencies cannot generally file lawsuits themselves, they cannot threaten to do so. Nor is a collector in a position to analyze the law regarding wage garnishment in your state. The Federal Trade Commission offers a wealth of information regarding the federal laws regarding debt collection practices.
If you feel that a collector has broken the law, you can file a complaint with the FTC or your state Attorney General’s office, or file a lawsuit against the collector for violation of the Fair Debt Collections Practices Act, the primary federal law regulating debt collectors.
The Fair Debt Collections Practices Act also requires collectors to stop calling you if you notify them in writing to cease communication. While a request to cease communication will not make the debt go away, it can end harassing credit calls. Be warned that sending a cease communication request can sometime lead to creditors filing a lawsuit since they are no longer able to conduct traditional collection activities. You must weigh the stress being caused by the calls you are receiving against any risk that sending a cease communication request may cause.
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