Expert: Michael Brotherton - 1/31/2009

Question
QUESTION: Thank you in advance. I am resubmitting a previous question. The initial response I received requested additonal information, and I foolishly just hit 'reply' on Yahoo, the information never reached you. Hence, I'm starting again, and will provide the initial question, plus the requested information.

Question: I have a $35,000.00 credit card debt with B of A. No payment has been made on the card in over two years. I have a settlement agreement, in writing, from National Enterprise Systems (Ohio) for $10,000.00. I paid $2,000.00 in January, am scheduled to pay $1,000.00 in February (which I can do), and am scheduled to pay the balance ($7,000.00) in March. I do not know how I can make the March payment. While I did agree to paying $10,000.00, I did not agree to the payment schedule. I am considering liquidating my pension, but the money could not be available until April. The collection agency is threatening to sue if I do not make the payments on time. I do not know if they are serious, or if this is a threat. I have told them that I need an additional month, and will do it then (contingent upon liquidating the pension). It seems to me I need to do this because this is not my only expense, and I have no income now. He says I am in, 'pre-legal' and that they will sue based upon the amount of debt, the length of time, and some tax info they have. In '07 I did take about $40,000.00 from an IRA and reported that in my '08 taxes. At present, I do not believe that I am a fat target for a judgement, but really want to solve this before that. One other thing, while I was not paying the card, I was paying a 'Hess Kennedy' affiliate $827.00/month. Just as payoff was approaching, I received a letter from a court appointed attorney to oversee the dissolution of those companies and the distribution of their assets. I have submitted my records, and will know what if anything (of about $14,000.00 paid) I will get back in April. I do not know, and suspect not, that the 'Hess Kennedy' money was held in an escrow account. Help, I just want to get this behind me with as little damage as possible. Also, what is the best credit ranking that I can ask be applied to this debt. Thanking you in advance for your info. Jed.

ANSWER: First, the collection agency is just trying to tweak you. It would not be productive to sue you if you are not employed. Although they could it is not likely. Collection agencies are hired to collect money, not file suit. If the original creditor wanted to sue you they would have. You are not refusing to pay you only need time to work it out.

You need to get something in writing from them confirming any arrangement for settlement and agree to the terms. You may agree with the amount but if therms are not workable you will default and they will void the agreement.

If you do not feel comfortable negotiating with a collector or they are making threats you may need someone to negotiate for you, either an attorney or a company such as mine that has a history of success negotiating with creditors. I'm not trying to sell you anything but you have a much better chance of success using someone with experience. You may also be able to yourself but be careful or they will try to find a way to void the agreement after it is paid. It happens all the time.

More than likely they will report this as a paid or settled collection. Make sure they agree to report it with a 0 (zero) balance once it is paid or it will show up as a charge off with a balance due.

You can ask for anything reasonable in your proposal but do it in writing. Start this process over and ask for terms you can meet. Be assertive.

---------- FOLLOW-UP ----------

QUESTION: Michael,

Thank you for your input. Did you answer my earlier question, or do you know who did? It was signed All Experts Financial Group. If I start over, what happens to the $2,000.00 that I just paid them. I am really being worn thin by this whole mess, and do not have money to keep starting and stopping. I am getting very frustrated and weary. Please tell me a little about your company or where I can find information. Thank You....Jed

ANSWER: Account for the $2000 in  your proposal. Whatever your total proposal is deduct the #2k as a good faith payment. Play hard ball. Be assertive and give them no options. Aim low and give yourself just a little room to negotiate.

For information on my company and me go to my web site at www.financialemergency.com. You can also check out my bio here on allexperts.

I have been in the financial serivces industry for 30 years and have negotiated many millions of dollars in settlements. I have established my name in this business as being honest and I get things done. I would be happy to provide references upon request.

My direct phone number is 937 372 8581 and my email address is mediator@financialemergency.com

By the way, I did answer your question earlier.

---------- FOLLOW-UP ----------

QUESTION: Thank you Michael,

Just two final questions:

(1) If I am sued, will your company represent me, or provide me enough support to handle it myself?

(2) What are your fees for debt settlement services?

Thank you so much for the help that you have provided me.

Jed

Answer
I am no longer with a law firm and cannot represent you in court, however most collection lawsuits are one sided and unless you can show some violation of your rights the lender will eventually obtain judgment. One of the best options in these cases is to negotiate. I know of no creditor or attorney that are not willing to negotiate to avoid a long drawn out court battle. And it is not likely they will sue you as long as there are negotiations in process. There is no need to.

I would need to talk to you directly concerning fees. I never discuss fees on this blog. It isnt kosher. You may call me to discuss this and I will be happy to provide any informaiton or answer questions. My office number is 937 372 8581. You may also send me an email directly to mediator@financialemergency.com