Creditors and Bankruptcy/Creditor Lawsuit


I'm a 41 year old divorced male.  After my ex and I separated I moved back to my hometown of Buffalo, NY, and could not find a suitable job.  I searched and searched, and for the better part of a year I was not able to secure suitable employment.  I had to take a cleaning job just to make my rent.  This, despite having a master's degree in counseling.  I ran out of money, completely.  Nothing in a retirement, savings, or pension ...I almost had no place to live.  So, after guarding my credit with my life since I first had it at 18, I began missing payments.  Now, I owe approximately $20K, plus $126K in student loan debt.

I have not made any credit payments in over a year, now, and my student loans are still on economic hardship forbearance.  I've struggled trying to decide what would be best -just not pay my credit debts, settle, or file personal bankruptcy.

Then, back on November 1st, 2012 I received a letter from a local attorney who informed me Discover Card had commenced legal action against me to collect the $5,000 credit card debt I owed.  I confirmed via public online records that, in fact Discover Card did file against me in the local municipal court.  On two occasions there was a knock at my door, and when I looked through the peephole I could see a man standing there holding papers.  On neither of these two occasions did he stay long -perhaps 10-15 seconds, then he left; he didn't even knock a second time!

Here's what I'm wondering: What's going on!?  My guess is that the server who was at my door may have lied and claimed he served me with papers -but I was never served!  He did not tape them to my door, I didn't get any papers via certified mail --- I haven't heard anything more, whatsoever!  How can I know whether Discover Card is continuing this legal action against me, and why have I not heard a single thing from anyone?  Remember, the complaint was filed November 1st, 2012, and I still have heard nothing.

My fear is that the server lied and claimed her served me when in fact he did not, and that the courts may rule a default judgment against me.  I need to know what's going on because I'm considering settling for 50% with Discover Card, and if there's a default judgment in the works, that would of course eliminate the possibility of settling.  But even aside from that, I wouldn't want a judgment against me for anything when I haven't been served.

Many thanks for your assistance!


Hello Frank:   

Your concern that the process server or the sheriff's deputy lied and said you were served when you were not is justified.   That happens all the time.  They may already have a default judgment against you, and even if they don't, if you don't handle this right, they will.

Settling is an option here, but certainly not the best option you have.   Even if you get these people to settlement with you, you will not find them to be very cooperative -   they already sued you and if you pay them a settlement, they will keep the lawsuit going until they actually get the cash from you - and then they will mark it on your credit report marked as a paid collection account -   and don't believe if they tell you that they won't.   They NEVER mark it as if you had paid it on time.     Next to not doing anything, settling with them is the worst thing you could do.   

That leaves you a couple of other options -  fighting them, or filing for bankruptcy protection.    This would be a lot easier to talk to you on the phone.   You can call me anytime you wish at this number:   915  261-3893    I will not charge you just to talk on the phone.   I could then explain in more detail what I could do to help you and how much I would charge depending on how you wanted to proceed.   Depending on some facts you have not stated in your question, it may be possible for you to file for chapter 7 bankruptcy protection and have the filing fee of 306 dollars waived.     I would charge you 250 to do a chapter 7 and this lawsuit and all of your other unsecured credit (credit cards and medical bills and some other debts)  would be discharged.  Depending on your specific situation, it is possible that you may be able to do something about your student loan debt as well.   Contrary to what some people think, student loans can be discharged in bankruptcy if you can show an undue hardship - and it sounds like that may be possible in your situation.        

On the other hand, if you wanted to fight this one lawsuit, I would charge less than I would for the bankruptcy, and we may be able to get the case dismissed by making you prove that you owe the debt, not you having to prove that you don't.    However, it is not like with a bankruptcy where you can be absolutely certain of how it will turn out.   Plus, you would still have the other debts to potentially worry about.     

In any event, you are welcome to call me at any time you choose to call.   I look forward to hearing from you.

Jack Hall    J.D.
915  261-3893  

Creditors and Bankruptcy

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Can answer questions about bankruptcy, lawsuits or judgments that have been filed against you. Also can answer questions about tax issues, property that is facing foreclosure, repossession of vehicles, and wage garnishments. 915 261-3893


Over 30 years experience assisting consumers with lawsuits and bankruptcy matters since graduating from law school.

Numerous published appellate court opinions; Law review publications; Article on consumer bankruptcy in Black Enterprise magazine; was requested to author a book on consumer bankruptcy by Doubleday Publishers

Over twenty years of education including law degree (J.D.); masters and bachelors degrees in political science; author of magazine articles related to consumer bankruptcy; hundreds of hours of continuing education legal education and seminars

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Have had well over a thousand bankruptcy clients during the past 30 years and have had many clients in civil lawsuits during the same time period

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