Debt settlement after being served

[mnmlsky]

I am helping out a friend. She seems to be shooting herself in the foot again and again. She is not American and doesn't understand how to negotiate or how this works or how shady these collectors are. You could probably sell her salt water in the middle of the Pacific Ocean.

She was served on a debt (CapOne) of $10K. She was out of the country for 2 years and ignored the debt. When she was planning to take action the card was aleady discharged and sold to a debter. I advised her to contact them and try to negotiate. I have in the past negotiated for no more than 40% of all debts. Ranging from 10% to 40%. They are giving her a settlement of $6700. I think that's ridiculous, but they are telling her that it's because it's in court now. I told her to tell them that it's a ridiculous amount and advised her not to settle. She has very low income. I advised her to tell them that she is going to file for bankruptcy because she doent have that kind of money. And that it would be in their interest to settle for 40%-50% instead of a Ch.7 and they get nothing.

How does she negotiate? She is telling me that they are not willing to budge. Are they bluffing? Should she call their bluff and not agree on the settlement amount? I would not agree on that amount. I would limit it at $50000 TOPS. 

Thanks!

[rostrow416]

Has she responded to the court action already?  That should come first.  After that, she should only offer $1,000 to start without acknowledging anything or speaking to them about it at all.  If they aren't going to negotiate, go to court, get a hearing date, and wait for them to make an offer.

[FireMedic1]

No one matches settlement offers. It went to court and she defaulted. Sounds like they didnt go. So they have a right to garnish wages and so on.  Saying BK when it isnt going to happen, isnt the moral thing to do. They dont care. They want to be paid. Shes going to have to come to some kind of agreement and make payment arraingements. No way around it. If she can get them to go back to court or contact the law group if there is one and show low income. They may lower the amount and payments.

[Anonymous]

What state is she in? In my state creditors cannot garnish wages. If you are low income there is basically nothing they can do here other than lein you. A lein isn't the end of the world. If you ever get enough money to buy a house or something you just deal with the lein then. If you stay low income your entire life then the lein does nothing and disappears when you die.

Is there a judgement against her? Where is it? What's the case number? Contact the court where the case was supposedly tried. That's the starting point. Judgements are civil, not criminal. We don't have debtors prison in America. So if she's low income and in a state with decent laws, not much comes of them either. If she ever gets money she can pay then. If she never does, then the debt disappears when she does.

Cut off contact with the collection agency. Only contact them through a lawyer, and if that is not possible then with everything written out and sent through the mail.

Bankers are not moral. And morals aren't enforcable by law. At least not in a secular country like the United States. She has no obligations other than what the law states in her jurisdiction.

[Anonymous]

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@FireMedic1 wrote:

No one matches settlement offers. It went to court and she defaulted. Sounds like they didnt go. So they have a right to garnish wages and so on.  Saying BK when it isnt going to happen, isnt the moral thing to do. They dont care. They want to be paid. Shes going to have to come to some kind of agreement and make payment arraingements. No way around it. If she can get them to go back to court or contact the law group if there is one and show low income. They may lower the amount and payments.

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What's so immoral about saying BK and not doing it?  @FireMedic1 is standing on higher moral grounds with empty pockets against corporate banks?  

Saying BK won't do anything, but the fact that she is low income means BK is a possibility she should actually consider.  Consult with a BK attorney and see where that leads, maybe use the money that she is going to settle with bank to pay attorney.  

[vntrsc]

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@Anonymous wrote:

What state is she in? In my state creditors cannot garnish wages. If you are low income there is basically nothing they can do here other than lein you. A lein isn't the end of the world. If you ever get enough money to buy a house or something you just deal with the lein then. If you stay low income your entire life then the lein does nothing and disappears when you die.

Is there a judgement against her? Where is it? What's the case number? Contact the court where the case was supposedly tried. That's the starting point. Judgements are civil, not criminal. We don't have debtors prison in America. So if she's low income and in a state with decent laws, not much comes of them either. If she ever gets money she can pay then. If she never does, then the debt disappears when she does.

Cut off contact with the collection agency. Only contact them through a lawyer, and if that is not possible then with everything written out and sent through the mail.

Bankers are not moral. And morals aren't enforcable by law. At least not in a secular country like the United States. She has no obligations other than what the law states in her jurisdiction.

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Judgment enforcement is dependent upon state law.  A judgment lien is placed property such as a home.  In some states, a judgment may last only a certain amount and cannot be renewed.  Once that time has passed and if no action was taken, a judgment is no longer enforceable.  In other states, a judgment can be renewed.   For instance, it may last for 10 years and can be renewed for another 10 years.

A judgment does not necessarily disappear upon a person's death.  Depending upon one's state laws and if a deceased has any assets, it may be taken out of the deceased's estate.