Reply
Frequent Contributor
PayYouNever
Posts: 396
Registered: ‎08-11-2007

Charge-Off and Being Sued

I have a situation that I'm trying to minimize the damage of.  Due to job loss, I wasn't able to make payments on the remaining balance of a car that was repossessed since December of last year. I was making partial payments when I could, but in May American General Finance -- that stand-up organization -- filed a small claims lawsuit against me. We go to court on August 31, but in the meantime American General has been harassing me to pay them whatever I could such that we could have a "stipulated judgment" entered in a trial.

 

As I figured out what I could pay each month leading up to the court appearance, I learned that they Charged-Off my debt.

 

So my question is, barring paying off the remaining balance (only about $2200), what is my strategy to minimize the damage to my FICO score?  I have borrowed money from too many people just to survive the last 7 months, so I'm tapped out of sources to get money to make any settlement offers.

 

Also, if the debt is Charged-Off, how does that affect the Creditor's accounting if gets the judgement?  If I eventually pay, isn't that double-booking?

Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008

Re: Charge-Off and Being Sued

 

Either paying it or making arrangements with them prior to the court date is about all you can do.

Established Contributor
CreditDrama85
Posts: 1,014
Registered: ‎07-03-2007

Re: Charge-Off and Being Sued

how quickly can you get the $. you have 30 days until the intitial court day. you could

 

not show up but keep track of the next date then decide whether you want to let a judgment get entered or ask the court for leave to file an appearance before that happens. if you decide to let a judgment get entered chances are you could get it vacated and then drag out the process by getting a continuance or filing a motion the other party will dispute etc.

 

eventually you will have to pay the $ if you drag out the court process and pay before the judgment is FINAL, it will not hurt your credit.

Frequent Contributor
Underh20
Posts: 322
Registered: ‎11-15-2008

Re: Charge-Off and Being Sued


CreditDrama85 wrote:

how quickly can you get the $. you have 30 days until the intitial court day. you could

 

not show up but keep track of the next date then decide whether you want to let a judgment get entered or ask the court for leave to file an appearance before that happens. if you decide to let a judgment get entered chances are you could get it vacated and then drag out the process by getting a continuance or filing a motion the other party will dispute etc.

 

eventually you will have to pay the $ if you drag out the court process and pay before the judgment is FINAL, it will not hurt your credit.


It is far from being a sure thing that the judgment can be vacated.  Having a judgment on your credit file is one of the worst things you can have.

 

I'd talk to the creditor and try to work out a payment plan without going to court.  Even a stipulated judgment can have a serious effect on your credit report.

Established Contributor
CreditDrama85
Posts: 1,014
Registered: ‎07-03-2007

Re: Charge-Off and Being Sued

agreed that it is a serious thing but disagree about it being a sure thing to have it vacated within a certain period of time. cite a relevant statute and have a good reason and it will be vacated the first time around.

 

didnt the original person say it was already in court? they were making partial payments when they could and they still got sued. this doesnt sound like a finance company that can be trusted  on their word.

 

the partial payments should be good enough to make defendant not responsible for 100% of plaintiffs attorney fees.

 

also, it is not always a guarantee that a FINAL judgement will show on a CR. a lot of time it will eventually but sometimes it will only show on 1 or not show at all.

 

while these are my opinions, the point of my feedback was to illustrate how the process can be dragged out because it sounds like the original person could eventually pay the $2000 in which case this would be dismissed.

 

a lot of people confuse a summons with a judgment or an ex parte judgment (which can easily be vacated) with a final judgment which is what i think you are referring to. 

Frequent Contributor
Underh20
Posts: 322
Registered: ‎11-15-2008

Re: Charge-Off and Being Sued


CreditDrama85 wrote:

agreed that it is a serious thing but disagree about it being a sure thing to have it vacated within a certain period of time. cite a relevant statute and have a good reason and it will be vacated the first time around.

 

didnt the original person say it was already in court? they were making partial payments when they could and they still got sued. this doesnt sound like a finance company that can be trusted  on their word.

 

the partial payments should be good enough to make defendant not responsible for 100% of plaintiffs attorney fees.

 

also, it is not always a guarantee that a FINAL judgement will show on a CR. a lot of time it will eventually but sometimes it will only show on 1 or not show at all.

 

while these are my opinions, the point of my feedback was to illustrate how the process can be dragged out because it sounds like the original person could eventually pay the $2000 in which case this would be dismissed.

 

a lot of people confuse a summons with a judgment or an ex parte judgment (which can easily be vacated) with a final judgment which is what i think you are referring to. 


 

OP was making, at best, sporadic payments and lenders don't like that.  If he enters into an established payment plan, most creditors will take that rather than plodding through legal action which costs them even more money -- that they aren't even sure of recovering.  That's about his only chance now short of getting hit with a judgment.

 

Obviously you missed Civil Procedure in law school.  You cannot just pick any statute and get a judgment vacated.  All valid reasons for vacating a judgment boil down to two issues:

 

1.  The court had personal jurisdiction over the respondent; and / or

2.  The court had jurisdiction over the matter.

 

Also, there is no ex-parte judgment.  The proper term is default judgment where judgment is entered because the respondent failed to appear. If proper service was made, it is not very likely the judgment can later be vacated.

 

Again, if you were properly served, chances are you are SOL.

 

However, if the goal is to drag out the process, it is relatively simple to appeal a small claims court action.  Or request a continuance about one week prior to the actual court date.

Established Contributor
CreditDrama85
Posts: 1,014
Registered: ‎07-03-2007

Re: Charge-Off and Being Sued

this is the part where we simply agree to disagree. anytime your comments are directed at me-- for example "obviously you missed civil procedure in law school" , they are not helpful to the OP and you are taking things too personal.
Moderator Emeritus
fused
Posts: 16,243
Registered: ‎03-12-2007

Re: Charge-Off and Being Sued

Thread is locked and under mod review. In the meantime, please read the link below. Thank you!

 

Friendly, Supportive And Respectful


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+