WHat happens if I receive a judgement against me from a collection agency?

Question

A collection agency contacted me about paying off a debt, close to $40,000, in June of this year. I have made no payments on the debt since the fall of '05. What is the likelihood of a judgment made against me for this debt when I have no assets? If they do file a judgment what am I responsible for paying? Is it better to directly negotiate with the collection agency or to go through a debt settlement company? With which do I have a better chance of making the smallest payment?

Answer 1

If you have any assets whatsoever they can and will seize them. Either go bankrupt or make a deal to pay them a small sum every month.

Answer 2

As bdancer2 has said, check your states SOL.

I just wanted to add my 2 cents worth of advice,   Due to the fact that you made payments in 05, you have reset the state SOL.  States vary in time from 3 yrs to 10 yrs so you may have or be close to the SOL time frame.

If they do seek legal action and win and you have no assets, then they will seek wage garnishment.North Carolina, Pennsylvania, South Carolina and Texas — do not allow wage garnishment at all except for debts related to taxes, child support, federally guaranteed student loans, and court-ordered fines or restitution for a crime the debtor committed. Several other states observe maximum thresholds that are lower than the 25 percent maximum provided by federal law. States may also prohibit garnishment altogether in certain circumstances. For example, in Florida the wages of a person who provides more than half the support for a child or other dependent are exempt from garnishment altogether (though this exemption is subject to waiver).

Use the following link to find your states law

http://www.bcsalliance.com/y_debt_statel...

Hope this answers your question

LEGAL DISCLAIMER: The advice contained herein is for informational purposes only. It is not to be construed as Legal Counsel nor Legal Advice.

Answer 3

The collection agency does not have the power to directly file a judgement...only a court can do this. The collection agency would have to officially serve you a summons for a court date...and on that date they'd have to win a judgment.  If this happens, they can garnish wages if you live in a state that allows this....They can also freeze your checking account.

Stay away from any debt settlement company...they would only make matters worse. Since you've already defaulted you can make your own settlement offers....you don't have to pay anyone to do this for you. Try to get a written settlement...the problem here is that they'd want any settlement paid off fairly fast...as in a lump sum....

Answer 4

If you have no assets just declare bankruptcy. That is the smallest payment because then the debt is gone and you owe a grand total of $0.00

Answer 5

Check here for the Statute of Limitations (SOL) for your state:  http://www.bcsalliance.com/statute_of_li...

I suspect the debt is still within the SOL and the debt is large enough that they are likely to sue.  If you receive a summons be sure to respond to it and show up in court.  Otherwise, they would win  a default judgment.  With a judgment they can attach your bank account, garnish your wages, and lien your property.

With a $40K debt, even if you negotiate a settlement for half,  they are not going to allow you to string payments for more than 6 months, maybe a year.

Be very careful before you sign up with a settlement company.  There are a lot of scammers out there that will just take you money.