I Have a Lot of Credit Card Debt, a Repossession and a Judgment. – Eric

“Dear Mitch,

I have a lot of old credit card debt. Recently I had a repossession go to judgment in which I received a letter in the mail. I contacted the law firm but was not left felling comfortable.. They answered the phone by just saying “law office” , the person I spoke to seemed completely uniformed of anything. I asked about payment arrangements. They told me it would take a week to get back to me. I was not sure if filing for BK would be best. My credit is already damaged.

IS being in debt reduction program looked at the same way as being in bankruptcy?


Dear Eric,

If you enter into a debt reduction program, your credit will be hit each month when payment is not made in full. If the remaining debt is not forgiven, you will be responsible for that as well and can be sued for it. If it is forgiven, you need to see a tax professional about tax consequences on the forgiven debt. If you are sued on this debt, the report remains for 7 years or the length of the statute of limitations on a judgment in your state.

If you file for bankruptcy, the pain ends when you file assuming that the debt is discharged. There are no taxes from the debt being discharged (again see a tax professional for any other tax consequences). The bankruptcy remains on your credit report for 10 years.

It sounds like you have a debt collector after you. If that is the case, you have rights under the Fair Debt Collection Practices Act. A local consumer law attorney can help you there.

Mitchell Goldstein is an attorney licensed in Virginia. His practice focus is consumer bankruptcy, mortgage and debt defense and technology issues. He is a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA) and National Association of Consumer Attorneys (NACA). His goal is to educate people with solid advice and give guidance to consumers to help them made decisions that impact their financial well-being.

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

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