I get e-mails here once in and awhile and while I advise that you consult with an attorney or get legal help when it comes to your debt, I can hopefully help you walk in the right direction.  I received a question the other day about a debt judgement and I thought I’d do my best to answer it.

Q:  Hi, I recently had a credit card account that was in collection.  I owed around $7,000 and the collection agency said we could settle with $3,500 if paid off in full.  Right now, I don’t have the full $3,500.  I would only be able to pay $2,000 or so.  They won’t accept monthly payments on this? What will happen?

A:  Well, it sounds like you took the first step and negoiated with the collection agency, which is a good thing and I think many people should learn from this because many just pay the full balance over time and plus some.  I just wanted to say you’re on the right path at least.

Since it sounds like the credit card company sounds like they will settle on 50 cents on the dollar (this is the industry standard it seems), it sounds like you could potentially tell them what you can pay in full.  You mentioned you have around $2,000.  Call them back up and tell them this.  Tell them that you can’t afford the $3,500 and you’re willing to give them $2,000 in full by the end of the day tomorrow.  The worst thing they can say is NO.

If this doesn’t follow through though, the company is more than likely going to file a judgement on you and they have every right and let me tell you why.  When you signed up for your credit card, you are allowing them to sue you in court to collect the money that is due and this is exactly what they are doing.  They are a business and they would rather get a few dollars rather than nothing.

If you receive a notice from an attorney, make sure you respond to this, it’s important!  Never ever ignore something like this and instead, call up the collector and work something out.  If you’re willing to pay, they will do something for you.  Tell them you want the 50 cent on the dollar but can only pay $500 every month.  They may take this, they may not, it’s all up to you.

If this fails, you may have to show up in court.  The worst thing you can do is NOT show up.  Please, if you can take any advice, SHOW UP in court and if you don’t, you’re just hurting yourself even more.  When you show up, be honest and tell the judge that you’re willing to work with them.   Tell the judge you’re more than willing to work something out and tell the court that you have tried but they won’t follow through on it.  Providing this alone can save you from more legal battles.  This is why it’s essential to go.

If you fail to show up, the creditor can then garnish wages, put a lien on your property or home, take personal property or whatever they have to do.  This is why you need to go to the court to get things worked out, it will only harm you more.

If you’re getting threatened to have a debt judgement thrown at you, try everything in your own power to get them to work with you.  Try and figure out some sort of payment plan that you can work out.  This will be the best thing that you can do rather than ignore them.  As long as you don’t ignore, you should be fine with the entire process.