“Dear Steve,
I had a judgement from a credit card against me, I filed for chapter 13 , but the plan was dismissed early. I saw on my credit report that the judgement was there but the company never contacted me. My wages were never garnished etc
While going through my paperwork I found a letter from the sheriff that said credit card had a lien on my property. So today I investigated it, and sure enough there is an 11,500 lien on my property. How do I handle this? Do I pay them the 11,500,
Or do I try to have my bankruptcy lawyer negotiate with them? Additionally this was filed in 2010 so will I be charged interest on that amount?
Joanne”
Dear Joanne,
In order for them to get a judgment they had to sue you. So the timing is the issue here. If they sued you and got the judgment before or after them time you were in the chapter 13 then that seems like it would be not a problem. There would be nothing for your former bankruptcy attorney to deal with.
If they sued you or got the judgment when you were in the chapter 13 bankruptcy, that would be a problem and something your bankruptcy attorney could address.
Typically a judgment will sit and earn interest at the rate set by your state,
You can always try to negotiate with them to settle the debt. They may be interested in cash in hand today rather than waiting for some point in the future when you sell your house.
If you do negotiate a settlement, make sure you get the offer in writing and they the lien holder agrees to notify the court the lien was satisfied and should be released. Also make sure they agree to not pursue you for the remaining balance not paid.
If this came as a surprise, it might be a good idea to get a copy of your consolidated credit report and see what else might be out there.
Please post your responses and follow-up messages to me on this in the comments section below.
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Hi Michael,
It was the original creditor and as soon as they got the judgement they put the lien on the property. This was 3 years ago, 2 1/2 of those years I was in chapter 13, so I don’t think they can collect interest for the entire time. I’m glad I ran it by Steve an started investigating, they would have left it ther collecting interest and when I went to sell my home they would have grabbed the money, sneaky!!!
Thanks Joanne. Judgment interest inflating a debt (and the later payout), makes for a better payday if collecting the full amount owed. Most creditors and collectors would prefer to get paid and resolve the debt sooner than later though. Real time value of money, and consumers later filing bankruptcy to wipe out judgment debts, are motivations.
Hi Steve, My concern is they got the judgement prior to me filing my chapter 13 and my second concern is I had my chapter 13 dismissed early. I have had many creditors contact me and I have settled with all of them. If the lien is for 11,500
Does that amount of interest get added to the lien? Do they have to wait till I sell my home to get their money? Can they require me to sell my home to get their money?
I currently owe more than my home is worth.
Thanks for your help,
Joanne
Since it predates the bankruptcy then it sounds valid. Since the bankruptcy was dismissed rather than discharged the debt continues.
Interest is charged on the lien amount.
They do not have to wait to get paid but they filed it against the property to wait to get paid and earn interest.
They can’t force the sale of the home.
It sounds like you are experienced at settling with your creditors, go for it if you have the cash to settle.
Steve
Hi Steve, on the amount I owe, in your opinion , what is the best and worst cases scenario r/t settlement figures or percentages?
Thanks again,
Joanne
I think it would wind up somewhere around 50 percent of the balance if they are motivated for the cash now in a lump sum.
Really Steve,
That would be awesome, should I contact the original creditor directly?
If the lien holder is the original creditor, then yes. If you are not sure, check your consolidated credit report or check the public records for your property.
By consolidated credit report do you mean the reports from all 3 agencies? Transunion, and the other two? Is it different from what you see online when you order from transunion for example?
No one bureau report contain all reported information. The consolidated credit report makes it really easy to spot difference, find out information and identify information in error. This is the one I use http://www.experian.com/consumer-products/3B3S_demo.html
Hi Steve,
Just to give you an update on what has transpired today, I contacted the chaper 13 attorney. He looked into the matter,
The lien has grown to over $14,000 with interest. He is going to try to settle it for me at 50% of what I owe. Of course this doesn’t include his fee. Uggghhhh……
The fee is worth it to me to not have to deal with a law firm. I’m
So happy that I have saved an emergency fund….
I will probably be writing back to you again to see how I can defuse all these forgiven charges on my taxes. I know everything I’ve settled for less than what was do, if I understand correctly will be added to my income.
Thank you so much for all your help, if you have any further advice I would surely appreciate it!
Thanks again,
Joanne
Steve is great and really points people in the right direction when it comes to these types of problems. Good luck to you, I just faced a similar issue and was glad to finally have it behind us.
Thank you for the kind words.
Thank you so much Steve, I’m starting to feel like there is light at the end of the tunnel, and Bella thank you so much for your well wishes!
Just curious Joanne – Who was the original creditor for the debt, and is that who sued you, or is the plaintiff in the suit someone other than your original lender? How many years ago was the judgment entered?