Information regarding debt judgements reported by credit card co

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Mark Cappel

UpdatedSep 12, 2024

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?

You have some options, including:

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

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Debt statistics

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q1 2024 was $17.69 trillion. Student loan debt was $1.60 trillion and credit card debt was $1.12 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

The amount of debt and debt in collections vary by state. For example, in Arizona, 27% have any kind of debt in collections and the median debt in collections is $1903. Medical debt is common and 12% have that in collections. The median medical debt in collections is $719.

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.

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10 Comments

BBill, May, 2010

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.

DD. Priest, May, 2010

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?

MMike Yarbrough, Jun, 2009

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.

MMark Cappel, Jun, 2009

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 https://www.bills.com/consolidate-all-bills/ and debt negotiation and settlement https://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.

MMike, Jun, 2009

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.

BBill, May, 2009

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.

aalberto flores, May, 2009

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 ?

SSoumya, Apr, 2009

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 https://www.bills.com/collection-laws/.

FFarmer, Apr, 2009

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.

SSam, Apr, 2009

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!