How Do I Handle the One Creditor Not in My Debt Consolidation Plan That is Suing Me? – Tony

Steve Rhode — Thu, 22 Apr 2010 23:20:24 +0000

Tony

“Dear Steve,

I currently have most of all my credit cards in a debt consolidation program except one. One of them cant go on the debt program because its in litigation How do I handle that ?

Tony”

The Answer:

Dear Tony,

I’m left wondering how effective this debt consolidation program is that you are in. If the goal was to resolve all of your debt, having one car left out because they are suing you seems like a slow simmer recipe for a hell of a mess.

Here is what I predict will happen. You will receive a court summons when you get sued over the one omitted debt. The court will rule in favor of the creditor that sued you because they have a contract that shows your promise to pay and what you agreed they could do to you if you didn’t pay.

The creditor will win, get a judgment and potentially garnish your wages. Once that happens your debt consolidation payments will become unaffordable and you will default on them. All the money you will have paid in the debt consolidation plan to date will be pissed away since it did not resolve the problem.

Talk to your debt consolidation company about this issue. If they are willing to guarantee you that my predication will not come true, stick with them. If they won’t and you are not prepared to face a slow downhill slide, go talk to a bankruptcy attorney and ask them for their professional thoughts about your situation.

A bankruptcy will stop the litigation and neutralize the other debts as well. I’m not anti-debt consolidation. I’m against solutions that will not resolve the primary problem.

Big Hug!

@GetOutOfDebtGuy

I Was Scammed By a Debt Consolidation Company in New York. – Maria

Steve Rhode — Tue, 26 Jan 2010 20:09:16 +0000

From How to Get Out of Debt

“Dear Steve,

Because of a family situation I was forced to go into debt consolidation with a company in NY. I went into contract with them. I paid my monthly amount for one year. At the first of the month of November, I received a legal notice, from a law firm in Miami that this company, headed by a lawyer, was closed down and the lawyer was disbarred for stealing the clients monies. Hence, I was being notified that in order to recover my monies, if at all possible, I needed to supply proof of all my payments. It is now in litigation. I was also told I could contact another debt consolidation company to handle my debts. The litigation is to be settled by April of 2009. And I am not guaranteed that I will receive any
monies, since the lawyer being charged has assets that do not match her obligations.

Meanwhile, I am starting to receive phone calls from the company who is handling one of the credit card companies. And he is threatening me that the
company is going to sue me for breach of contract. I am desperate to know what to do. And can in the state of Pennsylvanis garnish your wages for this situation?
I am 65 work part-time, receive Social Security and have no assets whatsoever. No savings, or investments, no 401 K and I live in a Hud regulated housing. My income is just not able to support and further financial needs.

What, should I be doing to start resolving this situation? Can I lose my part-time job and have my wages garnished in all this at this time?

Maria”

The Answer:

Dear Maria,

I am so sorry you got scammed. You did not mention the company but your situation sounds a lot like the Laura Hess mess. I wrote about this in “Lawyers Lose Licenses Over Debt Relief. Dangerous Waters For All“.

I certainly hope you recover money for you losses and get a check back sometime in 2009.

Your creditors have every legal right to sue you for non-payment. it isn’t their fault you got scammed. All they care about is that they are not getting paid.

Based on your assets, you sound as if you are almost judgment proof. Meaning, if a creditor sued you and won, there would be nothing they could go after except some of your part-time income. This is a legal matter and you’ll need to speak to a lawyer licensed in your state for specific advice.

But rather than worrying about when you will or might get sued over these past debts, and based on your assets, I think there is a strong case to be made for you to consider bankruptcy at this time. Bankruptcy will close the door on these debts so you’ll never need to worry about them again. Any payment plan you enter into at your age and with your lack of savings would be financially reckless on your part. Don’t do it. You are not a good candidate for a credit counseling or debt consolidation program, in my humble opinion.

So you asked what you should do to start resolving this situation, I think you need to meet with a bankruptcy attorney. Click here to get a free bankruptcy consultation. If you meet with a bankruptcy lawyer for free to discuss your situation you can also get a free answer to your question about the restriction on garnishment of your part-time wages in your state. From that free bankruptcy consultation meeting you should walk away with information that will either convince you to file bankruptcy or answer your questions about having your wages attached.

Please Maria, think nine time before launching into a debt consolidation program, it really isn’t a good fit for your situation. I know you want to do the right thing but in my book, the right thing would be to file bankruptcy and work and save whatever you can moving forward.

Big Hug!

@GetOutOfDebtGuy

How to Get Out of Debt With the Get Out of Debt Guy » litigation

How Do I Handle the One Creditor Not in My Debt Consolidation Plan That is Suing Me? – Tony

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