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They hope that you will be so upset and unsettled by the constant phone calls that you will agree to pay just to make the calls stop.
You now know, however, that bill collectors can do little to force you to pay. Yes, they can refer your account to a lawyer to file suit - but that costs money and takes time. So if your phone is ringing off the hook, stop talking to the bill collectors and call our office for sound advice about your options.
First, let’s talk about the need for cash. Our experience has been that collection agencies are very unlikely to settle if you cannot provide a lump sum payoff. They are not set up to track payments and they will generally not entertain payment plans. If you are dealing with a collection law firm, they may consider up to a year of payments, but they will want you to enter into a consent judgment in court first. There are many reasons why a consent judgment may not be in your best interest - call us for more information about this.
Second, let’s talk about leverage. You will get the best deal if you have little or nothing to seize using court processes. For example, if you are unemployed, own no bank account or home and your only source of income is Social Security, you are what is known as judgment proof . In this case, you have the most leverage to demand a favorable deal because the collection agency has few other options.
By contrast, if you are gainfully employed, own a bank account containing several thousand dollars, or own a house with significant equity, the collection agency or collection lawyer has numerous collection options and you probably won’t get much of a discount.
Needless to say, you don’t want to negotiate if you don’t know how to evaluate your leverage for settlement.
As a practical matter, however, this lawsuit process takes time, costs money (in the form of filing fees, service costs and legal fees) and rarely will the creditor end up collecting 100% of the debt claimed.
Creditors know that the older a debt becomes the less likely it can be successfully collected, especially when the defendant (you) will be looking for ways to avoid paying the debt.
So, at various times during the collection process up to and including the post-judgment phase - there will be opportunities for you to settle, make payments or otherwise negotiate some resolution. Of course, bankruptcy is your ultimate “out” in that you can use bankruptcy to get rid of credit card debts entirely.
Would you like to learn more about your options to deal with unpaid credit card debt? Call our office at 770-393-4985 to learn about your bankruptcy and non-bankruptcy possibilities.
However, if your Social Security funds are “co-mingled” with other funds in a bank account, your money could be at risk. Therefore if you are receiving Social Security benefits, make sure to ask your bank to set up a special “sub-account” specifically for Social Security funds.
If a credit card company or other civil judgment creditor improperly seizes your Social Security funds, you can get the money back but recovering your funds can be difficult and time consuming.
The credit card business is extremely profitable for banks - in many case, fees from credit cards generate a large percentage of a bank’s income. Because they are legally allowed to charge high fees and outrageous interest rates, banks make big dollars even if some customers default or file bankruptcy.
Bankruptcy has the power to completely wipe out credit card debt, or, in the case of Chapter 13, to pay it back at pennies on the dollar. Equally important, interest and penalties stop accruing and they go away as well. Bankruptcy is like no other solution to credit card debt - whether you owe just a few thousand dollars or tens of thousands of debt to multiple credit card lenders.
Once you have filed your bankruptcy, we can cancel most judgments against you by filing a Motion to Avoid Judgment Lien. Once the judgment is gone, the underlying debt will disappear as well.
If you have already read up about bankruptcy and are ready to get started, we invite you to download and complete our full intake package. This intake package gives us everything we need to prepare a Chapter 7 or Chapter 13 petition for your signature.
As always, we invite you to call our office at 770-393-4985 to ask any questions you may have.
NOTICE: Your information remains 100% confidential with Ginsberg Law. No one else will have access to your info. Your Privacy is always respected. There is no obligation for this review.
Consultations are always 100% FREE & 100% CONFIDENTIAL. Call Ginsberg Law now at 770-393-4985
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Office location: 1854 Independence Square, Atlanta, GA 30338
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