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How to work with lawyers to settle debt when I have filed judgements against me.

3 years ago I had accumulated 40-50,000.00 in debt, I was making all my payments and on time, I had a fantastic credit score. At that time I was injured and required surgery, long story short 5 surgeries later and 2 years spent in recovery I lost my job and my income.

I found myself unable to pay my minimum payments, at that time the credit card companies started lowering my limit and hitting me with over the limit fees and late charges.

I contacted a credit consolidating company and after paying them 3500.00 ( yes seen your form on trying to recoup that ) and 6 months time they did nothing. I cancelled those services and felt I would go at it alone.

I have managed to pay 5 accounts off with settlement offers totaling just over 10,000.00 I have been contacted by attorneys with some of the other card companies but were not as flexible as working with the companies themselves.

It took me a few years on another matter before I received the monies I had to pay them off. My situation now is that these attorneys have now entered judgements on me and have garnishments on my checking accounts ( fearing a repeat of another financial disaster ) what can I do? My debt increased from 40k to almost 74k and to pay all these off even at 50% I would have to have 35k dollars which I do not have.

I am still unemployed and living on a fixed income. I am very willing to pay off my debt and not file bankruptcy however looking for a win/win solution. Any suggestions?

Julie

How to work with lawyers to settle debt when I have filed judgements against me. by

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  • Julie

    Micheal,
     Yes I have contacted a bankruptcy attorney. He told me I had a 50/50 chance of being granted bankruptcy. Because of some assets that were acquired after my fathers passing.  I am not the only recipient of my fathers trust and perhaps that makes a difference. No liquid assets, but effects others as well.

    • http://www.consumerrecoverynetwork.com/ Michael

      If your bankruptcy does not complicate things for others, and given the amount of your debts while unemployed and on a fixed income, the bankruptcy will provide you the most (and needed) relief for the least cost.
      Even if there are some affects to others relating to the trust, this may be the best path to take.

      If there are knock on affects to the bankruptcy that suggest it should still be avoided if at all possible, and depending on the fixed income and hardship scenario, the judgment debts may be negotiable to a level that would make sense for you.

      It may be worth the effort to speak with a couple of experienced bankruptcy attorneys. The 50/50 thing sounds an awful lot like flipping a coin. If that same opinion is held by a few attorneys, then it is what it is.

      As far as settling at this point, it may be an uphill battle. If you can answer the following questions in a reply, it may help to further understand how long and steep the hill is.

      How old are the judgements? What amount are the judgments for? Which accounts were you sued on and who by – the original creditor or a debt buyer? What state do you live in? What is the source of the fixed income? What amount of money can you accumulate to throw at these settlements today? What amount can you add to your settlement war chest over the next several months?

      • Julie

         Michael,
        I appreciate your time in assisting me with my question.

          I was originally told that with the situation I was in I only had a 50/50 chance that bankruptcy would be granted, and once I filed the creditors would be aware of my situation and would likely not settle and could/would attach the assets, which would 100% contribute to another financial disaster.  The fixed income I am receiving is from this source. ( received quarterly) Right now I am using 100% of this source to sustain my current expenses and still falling short month to month however managing with some creative juggling. :/  To be honest with you I have reached the point where I would like to file bankruptcy just to end the nightmare and concern of garnishment etc.  have some resources left to start my financial future going the other direction. However like I stated before with the concern of the situation. I am very willing to speak with some experienced Bankruptcy attorneys. 
           To answer your questions: I know of 2 judgements currently One is about 5-6 months old and the other just last month.  The amounts are 19K and the other is $4505.00  Both are with Attorneys. ( same law firm ) I received a letter today with an offer for roughly $1300.00 off of the $4505.00. The settlement offer for the 19K debt is 13K  The accounts are midland funding LLC ( GE ) and Chase.  I had another chase account that I settled for 25%. ( 12K for 3K )  I am in Utah.  I am pretty confident that I could gather 5-9K right now but that would wipe me out for future payments unless I cashed in my 401 K which could host a new set of financial problems.

      • http://www.consumerrecoverynetwork.com/ Michael

        Thanks for the additional detail Julie.
        If creditors can make a claim against those assets, they will.

        Have you been called in for an asset hearing where the attorney asks you questions about your assets and sources of income? Received paperwork post judgment requesting same?

        I agree that hitting up the 401k is not a great place to be. Doing so would have to be favored by the math. Meaning you preserve and protect more of the trust income given the remaining disbursement amounts and over how much more a period of time.

        Doing nothing for a little while – until you come to terms with the decisions you have to evaluate – means living on a cash basis, keeping little on deposit in a bank account that could be levied where you wake up and your money for necessities and bills are gone due to the judgments being collected through legal means.
        The judgments are likely increasing with legal interest allowed in Utah, so they are not getting smaller. Having said that, the longer judgments remain uncollected, my experience is that they can be settled for more favorable amounts that may meet your ability to fund them.

      • Julie

        Thank you Micheal, 
           I have not been called in for an asset hearing nor have I received questions regarding same. I am not sure if creditors can make a claim against them as they are in my fathers trust, I simply receive an income from them. At least so I thought until I was told otherwise. I bring in 28,000.00 a year and with child support those are my income sources.  So if I sit and wait and keep funds out of accounts and live on a cash only basis. ( they have requested banking information via subpoena from 2 banks to date.) 1 account is my mothers SSDI account and so they have not been able to touch, the other account has very little activity and funds in it. Other than my personal car and my home that is all I own. Can they take those? Or belongings in my home? What about my childrens accounts in which I believe I am a co~owner cause of their ages at the time we opened those accounts?  The monies in them now are from their jobs.  Thank you for your valuable information. 

      • http://www.consumerrecoverynetwork.com/ Michael

        Any bank account that has your name on it that has non exempt funds placed in it is at risk.
        CAN they come and take stuff from you? Yes.
        WILL they come and take stuff? I don’t know. That kind of thing does not occur much, but you should know it is a possibility.

        Here is a quote from a bankruptcy attorney in Utah:
        “Though debtor’s exemptions are very limited, bankruptcy trustees seldom take household items from debtors because household goods have so little resale value that they are not often worth the trustee’s time to try to sell them.  On the other hand, creditors’ attorneys outside of
        bankruptcy, like to attach and have execution sales of non-exempt household items because of the extreme emotional leverage it gives them
        in pressuring debtors to pay a judgment for fear of loss of possessions that are very important to the debtor.”

  • http://www.consumerrecoverynetwork.com/ Michael

    Hi Julie,

    Why are you trying to avoid bankruptcy? Are there assets you are trying to keep?

    If you can file for chapter 7 and it would not force the liquidation of certain assets the cost/relief comparison between settling and filing bankruptcy are stark.

    If your bankruptcy were a straight forward chapter 7 the cost would be somewhere around 2k.

    If you were able to settle at the estimate you have in mind, the cost is 35k.

    Have you spoke with a bankruptcy attorney in your area? If not, speak with a couple and learn more about it.

  • http://www.consumerrecoverynetwork.com/ Michael

    Hi Julie,

    Why are you trying to avoid bankruptcy? Are there assets you are trying to keep?

    If you can file for chapter 7 and it would not force the liquidation of certain assets the cost/relief comparison between settling and filing bankruptcy are stark.

    If your bankruptcy were a straight forward chapter 7 the cost would be somewhere around 2k.

    If you were able to settle at the estimate you have in mind, the cost is 35k.

    Have you spoke with a bankruptcy attorney in your area? If not, speak with a couple and learn more about it.

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