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We Are Working With a Settlement Company But Chased Just Sued Us. – Myra

“Dear Steve,

We are living paycheck to paycheck, trying to sell our home (shortsale) to make the most of the small income we have, due to the fact I lost my job over 2 yrs ago, I am working now but only enough to still stay at home to not have to pay the expensive childcare which we can’t afford because I’m not making even half of what I used to make.

My husband & I decided a couple of years ago to contract a company that negotiates with creditors on your behalf. We pay this company monthly & the contract is for 3 1/2 yrs. Obviously we stopped paying our cards at the time the contract was made. Many of the debtors settled, however his Chase account would not settle.

We just received a summons for civil court. I contacted the company we contracted, & they have a litigation team working on trying to settle before it goes to court. My questions are what if they don’t want to settle. My husband owes 10k + 3 in accrued interest, we have no money, I had lost my job and we are in a really bad situation with just barely scraping by. We have about 4k in the account with the contracted company to offer ( and i figured if they wouldn’t maybe offer them another 1-2k with the money we’ll receive back from taxes) but what if they dont want to settle, what kind of judgment can be given if we present tht we’ve been payg this co. to help?

Myra”

Dear Myra,

I hate to tell you this but, I’m not surprised. When you stopped paying your creditors and defaulted on your agreed payments they immediately had the right to sue you, go for a judgment and even garnish wages.

If some creditors decided to settle, that was a choice they made. Chase has publicly said they will not work with settlement companies and in lawsuits has little love of that approach. See this article.

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You need to understand that a debt settlement company has NO legal authority to force a creditor to accept less that you contractually agreed to. A creditor has EVERY legal option to enforce the contract you agreed to.

This is a big reason I most often suggest bankruptcy. For about $1,500 people that qualify for a Chapter 7 bankruptcy discharge their debts in just a few months, can not be sued, and all collections calls stop.

I’m really not trying to make you feel bad here, just tell it like it is. And now you know why most debt settlement programs fail.

Time is not on your side since you’ve already been served. I suggest you click here to find a local bankruptcy attorney and go talk to them PRONTO.

Then draw a line in the sand and let your settlement company know that if they can’t reach an agreement by X date you will have to file for bankruptcy to get legal protection.

If your employment situation has changed it might make logical sense for you to pay for bankruptcy out of the money you have saved, end this issue with Chase and focus on moving forward rather than trying to fix the past. You need to worry about how to make it through the month, not about Chase.

Please update me on your progress by

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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