topic Re: Negotiate paying off judgment? in General Credit Topics

Negotiate paying off judgment?

Anonymous — Wed, 14 Aug 2013 20:08:46 GMT

So my husband has a ton of student loan debt all incurred before we were married. He has 200,000 in federal loans, 25,000 in private and a 20,000 judgment for a bar study loan which doesn't count as a student loan (yikes! I know!!). We are currently paying off the federal and private student loans but haven't touched the 20,000 judgment. He was underemployed for a long time making around $12,000/yr so he just couldn't pay. He recently got a better job (yay!) but now I'm worried they are going to try to garnish his wages. My question is, should we try to negotiate to pay off the judgment at a reduced rate before he files taxes in April and they find out he has a job, or should we just wait and hope that the SOL passes/they never come after the money. The judgment was issued in 2008 and we live in WA state. The money we would use to pay is my money from an inheritance that they will not be able to take unless we give it to them. He doesn't have anything they can take other than wage garnishment but as far as they know he only makes $12,000/yr and in WA that is below the limit so they can't garnish. I just don't want to stir the pot and have them re-examine his file and figure out he now has a better paying job. Any advice? If you think we should negotiate, what is a reasonable offer to make?

Re: Negotiate paying off judgment?

Anonymous — Wed, 14 Aug 2013 21:01:44 GMT

Judgments in WA are collectable for 10 years and can be renewed for another 10, making them collectable for 20 years.

The law in WA also allows for a judgment to remain on your CR for up to 20 years. I have never seen that happen and I did live in WA for 20 years and had a judgment there.

I would do whatever you can now to keep from having wages garnished.

Not sure what you mean that $12,000 is below the limit for garnishment. 75% of that would be exempt from garnishment, the other 25% would not be.

Re: Negotiate paying off judgment?

Anonymous — Wed, 14 Aug 2013 21:11:11 GMT

I thought that in WA they could only garnish your disposable income less 35 times the federal minimum wage (35x 7.25=$253 per week). $12,000/yr = $250 wk and since $250<253 they can not garnish.

Re: Negotiate paying off judgment?

Anonymous — Wed, 14 Aug 2013 21:27:10 GMT

Either way, it sounds like you think I should negotiate. What do you think a reasonable offer would be to make. They don't know anything about my finances so I could tell them I have $5000, $10,000, $15,000.....I just don't know what a reasonable offer would be. I feel like I have a little bit of power in that as far as they know, they might not ever get anything if they don't negotiate with us so I'm trying to get the best deal possible. I know before the judgement they had offered to settle the debt for $10,000 but obviously now they have a judgement so it's a different story. I don't want my starting offer to be so low that they don't even consider it but I obviously want to pay as little as possible. Does anyone have any experience negotiating in a situation like this?

Re: Negotiate paying off judgment?

blondy250 — Wed, 14 Aug 2013 21:33:28 GMT

guiness, I think you misread the OP's intent which is clearly is to commit fraud by misrepresenting her husbands income.

Re: Negotiate paying off judgment?

Anonymous — Wed, 14 Aug 2013 21:37:19 GMT

Seventy-five (75) percent of disposable earnings or thirty-five times the federal minimum hourly wage, whichever is larger, is the exempt amount. This 75 percent (or thirty-five times) must be paid to the employee. The remaining 25 percent is subject to the writ of garnishment (continuing lien).

Re: Negotiate paying off judgment?

webhopper — Wed, 14 Aug 2013 21:39:25 GMT

@blondy250 wrote:
guiness, I think you misread the OP's intent which is clearly is to commit fraud by misrepresenting her husbands income.

I'm not sure that the OP intends to defraud the creditor, I think the OP is simply trying to negotiate a settlement before her husbands wages are discovered and garnished. I don't see this as a fraud.

Re: Negotiate paying off judgment?

Anonymous — Wed, 14 Aug 2013 21:41:23 GMT

@blondy250 wrote:
guiness, I think you misread the OP's intent which is clearly is to commit fraud by misrepresenting her husbands income.

Re: Negotiate paying off judgment?

Anonymous — Wed, 14 Aug 2013 22:11:34 GMT

I'm not trying to misrepresent his income. I would just decline to tell them what his income is. There is a big difference. As far as I know I don't have to disclose any information to them if I don't want to. Am I wrong about that?

Re: Negotiate paying off judgment?

Anonymous — Thu, 15 Aug 2013 16:26:27 GMT

I think that negotiating the judgment before it goes farther is a fantastic idea. In fact I had one that was already being satisfied by wage garnishment and they were still willing to negotiate. What they are going to expect (in my experience) is that you are prepared to send payment in full for any negotiated amount in a relatively short period.

My judgment was for about $15,000 at the time I settled. What I did (on the advice of a friend who is financially savvy) is contact the law office directly by phone. She told me to have a figure in mind (I chose 50%) but start the conversation with the ball in their court. So I asked "What would you accept as payment in full IF I could send it in one week?". I didn't offer any figures or tell them what I had. They shot back a figure of about 30% of the total. I asked them to put it in writing and send it to me as an offer. They actually gave me 2 weeks from the date of their letter. Sent a certified check and they halted the garnishment and filed a satisfaction with the court.

I think making them open with a number gives you a stronger bargaining position. If you want to try for better with them after their offer then you can. But if you make it too antagonistic they may just start looking to see what assets your husband may have that they can attach.

Re: Negotiate paying off judgment?

Anonymous — Thu, 15 Aug 2013 16:58:20 GMT

Thanks, that is really helpful. I'm surprised they were willing to negotiate even after they were garnishing. If they wanted us to pay 30% I would be ecstatic. There is just a lot of risk that goes along with that reward for us since they are not garnishing already. Once they start garnishing I suppose you have nothing to lose with trying to negotiate.

Re: Negotiate paying off judgment?

Anonymous — Thu, 15 Aug 2013 19:53:24 GMT

It was the reward of getting their money right now. With the garnishment they can only get 25% of available wages and if you quit the job they have nothing. Plus at the rate of garnishment it would take them more than a few years to get it all. I don't know what resources they use to find out about new employment but they seem to and it's a bad way to introduce yourself to the HR department. If you can afford to pay off a settlement offer it gets the monkey off your back because as stated previously the judgment is good for 10 years. That's a long time to keep looking over your shoulder and hoping for the best.

Re: Negotiate paying off judgment?

RobertEG — Fri, 16 Aug 2013 00:31:56 GMT

Garnishment of pay is not the only possible basis for their going back to the court and seeking satsfaction of the debt.

They can seek a writ of satisfaction of the judgment, and most likely motion the court for a statement of assets.

With a court order to do so, discosure of assets beyond simple income that could form basis for ability to satisfy the judgment mght be required.

Negotiation on reduction of the amount they might accept is always possible, but they have a court order for satisfaction of the entire amount.

That's a pretty strong negotiation position on ther side.....

Re: Negotiate paying off judgment?

Anonymous — Fri, 16 Aug 2013 01:02:01 GMT

In my situation, he doesn't have any other assets. They don't have any other options other than garnishment at this point. You can't get blood from a turnip as they say. I realize they have the right to full payment of the debt (plus interest) but as I read more about this, a lot of the time they would like a big payment now instead of risking the person losing their job or something and them never getting anything. Obviously people in this situation sometimes don't have the best employment history. Honestly, if they were to garnish, it would make more financial sense in the short term to just quit his job. It's kind of sad that you go through all those years of education and are better off not working at all. I don't think we would choose that option because we try to be productive members of society, but maybe would look for a lower paying job (or ask to be paid less for the same job!) that would put us in a better situation as far as other payments go.