Expert: John Varghese - 9/10/2010

Question
I became unemployed a little over a year ago, couldn't find a job so began collecting social security. I am unable to continue payments on unsecured credit cards and I recently received a notice from a creditor, via a local attorney, (less than $5000.) that they are seeking a judgment against me for the amount owed. It will be by default as I can't afford to appear/file. My question is should they obtain a judgment against me, what can they do? I have no income other than social security, own a 15 year old car and have less than $2000. in the bank. I had paid on the account for over five years with no problems prior to becoming unemployed. Any advice/recommendations you may have would be greatly appreciated. Thank you.
                                          William  

Answer
Dear William,

I think it is not a good idea to leave the case unattended and allow a judgement to be passed against you ex parte. I would suggest that if you cant afford an attorney, you can appear directly before the court in person, and the court will direct you to the appropriate legal aid counsel. I am saying this for two reasons:
1. By appearing in the court, you can get some time to defend yourself and in the mean time if you can pay the amount, even by installments, that may be acceptable to the court given your financial condition.
2. You may also be able to find some good defence against the amount,something like the exorbitant charges or even the method of computation of the amount allegedly due from you, which would reduce your burden. For taking such a plea you need to appear in the court.

Now if you chose not to appear, the problem is that a judgement will be passed against you without hearing your side, and the amount, whatever it is, as claimed by the creditor will be accepted by the court without questions. This has two repercussions:
1. In case you want to challenge the amount allegdly due from you in future, it wont be possible.
2. If you are unable to pay the amount, the creditor may file an application to declare you an insolvent, which will affect your rights as a citizen in a great way.
So it is better to avoid the situation and to appear in the case and defend it.

Regards

John Varghese