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Question
I was served a letter from a law firm about a debt that I owe. It was a credit cart debt I used for my business. The business is closed. I don't generate any sale to pay off the debt. I was making monthly payment in it and it was still sent to collection. I'm going thru a divorce and only have a job thru temp-agency. My total personal credit debts is $12,000.00. I don't want to file for bankruptcy. What are my options.
Thanks!
Hi Shoua:
I'm sorry you are in this position. you options are basically as follows:
1.) Pay it. Get a loan, sell stuff, or whatever to pay the debt before court.
2.) Settle it. Try to negotiate a lower amount, better terms, or monthly payments to keep it from getting to court. They will likely want a written contract. Make them feel you are going to file bankruptcy and you may be able to get terms. There is still a good chance they will not want to give up the hammer of a judgement but it may be worth a try.
3.) Fight it. Is it being properly reported on your credit reports? Is it actually a legitimate business debt, not a personal one? Did they validate the debt? Are they licensed to collect it in your state? Is it in the proper court? These and a whole host of other questions can be raised before and at trial to try and delay, win, or offset the debt.
4.) Ignore it. Ignoring it produces the same results as losing in court - a judgement against you. This may allow the judgement debtor to garnish wages, attack bank accounts, place liens on property and even confiscate certain personal property to pay the judgement. Not all states allow those collections techniques and there are exemptions but they may be possible.
5.) Bankruptcy. Sounds like you have researched this. It costs money, destroys credit and may keep you from certain jobs but it can eliminate the debt in its entirety. Note that a judgement and collection have/will already really hurt your credit.
Good luck. I wish I had better options for you :#
Regan
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Answers by Expert:
Regan Shinski
Expertise
I can answer questions on collections, repossessions, bankruptcy, credit repair, credit counseling, FICO scores, credit planning, and the cause and effect of credit related decisions. I can also answer questions on collection settlements and preparing to sue your creditors for false debts and credit credit reporting.
Experience
Fifteen years ago I was financially devasted due to severe health issues. I filed bankruptcy, had a foreclosure, car repossession, tax lien, and ruined credit. I immersed myself in credit law. I settled dozens of accounts and had them removed to improve my credit. I personally sued four creditors and collection agencies and won cash settlements for their false reporting on my credit reports.
Since then, I have completely recovered and have nearly $100,000 in revolving credit lines and perfect credit. I have owned a credit repair company for the past five years and have an additional three years of specific work in the collections and debt management industry.
I am fully versed in the Fair Debt Collection Practices Acts (FDCPA), Fair Credit Reporting Act (FCRA), and have used them successfully in collection settlements and lawsuits for myself and others. I am also familiar with and abide by the Credit Repair Organizations Act (CROA).
I have deleted or helped delete literally hundreds and hundreds of derogatory items from consumers' credit reports and helped negotiate many settlements with collection agencies and creditors. I have also advised people on bankruptcy at any stage.
In the current credit market, I have successfully advised numerous people on how to obtain credit and how to negotiate for better terms.
Education/Credentials
BA University of Minnesota
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