Judgments are possible after a lawsuit in civil court. A judgment is a court order requiring a defendant to pay a certain amount of money. The party filing the suit, called the plaintiff, cannot file directly for the judgment. Instead, the plaintiff lists certain allegations in a lawsuit and the judge decides on a possible judgment later. It is possible to make payment arrangements to settle a lawsuit before a judgment.
Effects
Judgments are extremely harmful because they can lead to bank and wage garnishment. Bank garnishment allows a debt collector to freely withdraw money from the debtors bank account to satisfy the full amount of the judgment. Wage garnishment forces regular deductions from the debtors paycheck.
Notices
People with debt problems should pay special attention to court notices. Lawsuits begin with the delivery of legal documents called a summons and complaint. The summons is the notification of a lawsuit and the complaint is the lawsuit itself. Ignoring the summons and complaints leads to a so-called default judgment for the debt collector. Bank or wage garnishment is possible several weeks after a default judgment.
Strategy
Debtors receiving a summons and complaint can end the lawsuit by making payment arrangements with the attorney filing suit. However, the debtor should first hire an attorney of his own. A reputable consumer affairs attorney can handle the lawsuit and negotiate a settlement. It is possible for the debtor to handle this. However, debt collection attorneys usually have far more experience in debt settlement than debtors. A consumer affairs attorney, because of her experience, is more likely to negotiate favorable terms than the debtor.
Options
Debtors filing lawsuits for defaulted debts, such as credit cards, usually demand the entire amount due. Installments are possible, but an aggressive debt collection attorney may tack on an extra fee for the convenience. This is where a consumer affairs attorney can help. The attorney can threaten to stall the lawsuit for months -- or even longer -- by filing various legal motions. The consumer affairs attorney can use the tactic to force the opposing attorney to accept payment arrangements for less than the full balance.
Percentages
The New York Times reports that unsecured creditors such as credit card companies often settle delinquent debts for 20 to 70 percent of the balance. A consumer affairs attorney would likely begin negotiations at 20 percent and increase the offer until reaching a reasonable deal. The deal does not become official until the debtor and the debt collector sign an agreement. Debtors determined to negotiate on their own should contact the debt collector before a judge issues a judgment. A judgment gives the debt collector tremendous leverage and may make a favorable settlement impossible.
0 comments:
Post a Comment