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Reporting as Bad Debt and Small Claims Decision

Frequent Contributor

Reporting as Bad Debt and Small Claims Decision

I have a situation that I'm trying to minimize the damage from.  I was out of work for most of this year, like so many other people, and I fell behind on a installment loan from American General Finance.  They subsequently have been reporting that the debt has been charged-off as bad debt.  However, they went ahead and sued me in small claims court to get a judgment, this was this past Monday.  They offered me a stipulated Judgment, such that I could pay the loan off in monthly installments, and then they'll file a Satisfaction of Judgment.


However, I will have the judgment and the bad debt tradeline on my Credit File.  I was just thinking about this and I think what I want to do is Appeal the Judgment, as I never signed anything, which will give me 30-days, plus 90-Days to figure out what to do.  


My plan is I will issue a letter to American General via Fax today, stating that I want them to guarantee me in writing that they will file a motion to vacate the judgment once the final payment is made.  And that they will discontinue reporting the original account as bad debt once the account has been paid off.


I don't know if I can make the payments that they want, but if I don't make the payments then I'm defaulting again and they will take me back to court to get a full judgment.


Does anyone have any advice on what my options are?


I don't want to be saddled with the Bad Debt and the Judgment for the next years, when the adverse actions that have probably afflicted millions of people during the recession will linger until the next recession! 


Does anyone know if American General has been sued or investigated for predatory lending practices? 



Chris Derrick 

Message 1 of 5
Valued Contributor

Re: Reporting as Bad Debt and Small Claims Decision

I didn't know you could appeal a small claims judgement. I wonder if that varies by state?
Message 2 of 5
Epic Contributor

Re: Reporting as Bad Debt and Small Claims Decision

You would need to look up your states law on appealing judgments.  In most you can appeal the final judgment or decree.  It depends on what type of case it was in the first place.


Message 3 of 5

Re: Reporting as Bad Debt and Small Claims Decision

Has the statute of limitations expired on this debt? That could be a defense in even dealing with this company.


But you should make sure you can afford the monthly payments, there is no need to stress yourself out every month trying to make the payment. You need to TELL them what you can afford. DOn't let them bully you into agreeing to their terms. Remember, they want you money!! This will bite you in the butt if you agree to terms that you already know that you cant make.


The ball is in your court, renegoitate your terms/monthly payments. You are on top of with negoitating your credit rating. Upon full payment they will delete from your reports entirely.  Make sure you get that in writing and signed by the appropriate personnel.


Good Luck!

Message 4 of 5
Frequent Contributor

Re: Reporting as Bad Debt and Small Claims Decision

First off, in California you have 30 days to appeal the judgment.  I need to file my appeal by the end of this week, because American General wants their first payment on September 15, 2009.  I don't think I'm going to be able to make that.  I'm faxing them a request for changes in the terms, but I intend to file an appeal to the judgment by this Friday regardless of what they say to buy myself some more time to find a job.


Secondly, I'm not sure about other states, but the California Superior Court paperwork that came in the mail said I had 30 days to appeal the judgment before it can be entered in to the public record.  Therefore, I have some time to wheel and deal.


Thirdly, does anyone know if a Satisfaction of Judgment will enable the Judgment to be removed from my credit report?




Message 5 of 5