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  • debt collection

    Maybe I missed it, but I don't think I've seen this question answered: What happens if you don't pay? Besides your credit rating becoming terrible. Is it just phone calls forever?

  • #2
    some creditors dont do anything some (american express, discover) are very aggressive and will sue.

    Comment


    • #3
      I've posted a lot of my opinions related to your question at various places in this forum. I'll repeat a few for you.

      The first question you should ask yourself is how much of a stomach do you have for dealing with potential collectors and collection activities? If your feathers are not easily ruffled, then there are only a few actions others can take against you. While these are few, they can have heavy implications.

      Are you judgment proof? Do you own assests? Do you know your state exemptions against actions that might be taken through a judgment? In many states the exemptions for judgments are similar to those for bankruptcy. This won't stop liens against future sale of real property, but exemptions can stop forced sales of real property. Be familiar with your state laws. Google "your state name" followed by exemptions or judgment exemptions, etc.

      If your state is a wage garnishment state, be prepared for any local creditors and/or collectors to go after the non-exempt portion of your wages. In my state the limit is 25% after taxes. I can live quite fine on 75% of my takehome.

      Learn the small claims amounts for your state. Small claims actions move quickly. Debts above the small claims threshold generally require the action of a suit. A lawsuit can take time to move through the courts. I would be careful about fighting the tide against a debt you know you owe. While you can temporarily stall creditors/collectors in a court case, if you owe the money, eventually you will not win. It is not a good thing to get too many judgments backed up against you. My plan has been to work with folks who have judgments against me (currently two). One will be paid off, and a notice sent to the courthouse that the judgment has been satisfied, next month. I'm negotiating with a collection company on the other judgment. I'm quasi-judgment proof. The only "assets" I have are my wages. Garnishment can be a "pain" for creditors/collectors in my state, if a large amount of debt is involved. In Oregon, a writ of wage garnishment only lasts for 90 days and then needs to be renewed. Big creditors don't want the hassle of renewing or running the risk of "waiting in line" behind a current writ, only to have their writ expire LOL.

      The big problem is fees and interest can grow quickly. This is not a problem if you know you will be declaring BK in the future. Judgments can be a problem if they lead to a lien against real property or autos. This can create a 'secured' debt.

      Some folks advocate not talking with any of your creditors. I preferred to speak with all of mine. I just refuse to make any promises I can't keep. Debt collectors are a different beast. ALWAYS go through the motions of requiring a collector to validate/verify the debt they are claiming.

      I've never told a creditor "I won't pay them." I have told my creditors I can't afford to pay them what they want on a monthly basis, including their freaking interest. Most major creditors finally caved in and I have new payment programs at reduced interest with five-year pay-off plans and interest down ot 1.75% - 2.00%. All this could collapse if I get a wage garnishment against me for an extended period of time. But, there is very little anyone can do to me for something that is beyond my control, so I'd just go back to square one.

      Sorry about the long response here. But, when it comes down to it, if you have very few assets, there is not much that folks can do other than sue you. Even then, sueing you and collecting on a debt are two very different actions. A lawsuit simply gives the creditor/collector other avenues of trying to get any money/assets you might have.

      Protect your cash assets. Bank accounts can be "garnished." Is your paycheck direct deposit? If so, then you should move to a paper check. Collectors and creditors can be ruthless when it coems to ignoring the laws. You don't wan tto wake up some morning and discover your account is empty. While such actions require a court order and are illegal without a court action, there are plenty of folks who are willing to ignore laws. While you might eventually sue and get your money back, it doesn't help you in the present.

      Local creditors and collectors can act quickly.

      In terms of your credit, kiss it goodbye if you quit paying your debts. My scores fell from the 790 range to 480 in a few months. I don't care.

      Another thing to consider is your employment. For instance, I make very good money in a very stable job. In my circumstance I let my monthly debt payments out-pace my monthly income. I'm not ready to go down the chapter 13 path at this time, but knowing that in a worst case scenario BK 13was available, empowered me.

      In conclusion, while it may not be a crime to not pay your debts, there are consequences for not paying. Know what the consequences are in your state. Sit down and list all your debt and creditors. Take your best guess at the risk involved in not paying each of them. Those you deem the most risky (local, how quickly they can act, etc), you might want to attempt to work with.

      Have a plan of action. Eventually, you will need to address "not paying." If you know that BK is in your future, no big deal. If you can adjust your lifestyle to accomodate wage garnishment, no big deal. If you have assets, you have a problem.

      Probably more info than you wanted. But, it comes down to, "How much can you stomach?"

      Comment


      • #4
        For more insight, read the "stickies" posted above. CPO has posted some great threads related to dealing with the aftermath when one stops or can't pay bills. When you stop paying, you are essentially firing the first shot across the bow. It will not go unanswered.

        Comment


        • #5
          Need your advice treehugger1

          What if question for you then treehugger1

          I had a creditor call me at work for the second time (about 5 months ago) that blindsided me (after the 1st time I told them never to call me at work) and he asked me if I had any intention of paying my bill. My boss was standing right behind me at the time so I just said "No". Creditor then procedes to ask me "no...well why not". I was so stressed, and just wanting to get this jerk off my phone so that I could deal with the issues my boss had... I just told him..."look...I can't discuss this with you right now...call me at home"...then the creditor rep just blurted well you owe blah da blah da dadda, and call us back at this number..

          Can this bite me on the butt when I go to my 341 meeting?

          Thanks in advance for any and all advice!

          Comment


          • #6
            You are peachy fine!! You have no obligation to even speak to creditors!!
            Chapter 7 Pro Se....Discharged Feb. 2006

            Comment


            • #7
              There is not a great deal you can do about "original" creditors in most states. You can deal with collection agencies more effectively as the you have a great deal of federal and state laws on your side. However, many state have laws regulating creditors in the same manner that the federal debt collection laws regulate collectors. In terms of calls at work, that is a tough one. In my state (Oregon) a creditor cannot call you at work "more than once per week." But, its your word against theirs. BTW, I have not filed for BK 13 yet, and am hoping to avoid it, but there is a great deal of satisfaction knowing you have the ultimate weapon should things turn bad. Hopefully, the creditor who called will not harrass you again. If you told them you are not going to pay, then they will either send the debt to a collection agency (not such a bad thing if you are planning on filing BK), or they will begin their own legal proceedings if the debt is local and small claims. On the other hand, it is not illegal to tell someone you intend to make payments if your financial situation improves. "Intent" is not a promise. I think all of us originally intended to "pay as agreed." But, stuff happens. Don't worry about the 341 meeting and creditors or collection agencies. You have no obligation to speak to either. Visit a few BK attorneys and tell them of your plight. You might learn some info that will help you stall for the time you need.

              Comment


              • #8
                Originally posted by treehugger1 View Post
                I've posted a lot of my opinions related to your question at various places in this forum. I'll repeat a few for you.

                The first question you should ask yourself is how much of a stomach do you have for dealing with potential collectors and collection activities? If your feathers are not easily ruffled, then there are only a few actions others can take against you. While these are few, they can have heavy implications.

                Are you judgment proof? Do you own assests? Do you know your state exemptions against actions that might be taken through a judgment? In many states the exemptions for judgments are similar to those for bankruptcy. This won't stop liens against future sale of real property, but exemptions can stop forced sales of real property. Be familiar with your state laws. Google "your state name" followed by exemptions or judgment exemptions, etc.

                If your state is a wage garnishment state, be prepared for any local creditors and/or collectors to go after the non-exempt portion of your wages. In my state the limit is 25% after taxes. I can live quite fine on 75% of my takehome.

                Learn the small claims amounts for your state. Small claims actions move quickly. Debts above the small claims threshold generally require the action of a suit. A lawsuit can take time to move through the courts. I would be careful about fighting the tide against a debt you know you owe. While you can temporarily stall creditors/collectors in a court case, if you owe the money, eventually you will not win. It is not a good thing to get too many judgments backed up against you. My plan has been to work with folks who have judgments against me (currently two). One will be paid off, and a notice sent to the courthouse that the judgment has been satisfied, next month. I'm negotiating with a collection company on the other judgment. I'm quasi-judgment proof. The only "assets" I have are my wages. Garnishment can be a "pain" for creditors/collectors in my state, if a large amount of debt is involved. In Oregon, a writ of wage garnishment only lasts for 90 days and then needs to be renewed. Big creditors don't want the hassle of renewing or running the risk of "waiting in line" behind a current writ, only to have their writ expire LOL.

                The big problem is fees and interest can grow quickly. This is not a problem if you know you will be declaring BK in the future. Judgments can be a problem if they lead to a lien against real property or autos. This can create a 'secured' debt.

                Some folks advocate not talking with any of your creditors. I preferred to speak with all of mine. I just refuse to make any promises I can't keep. Debt collectors are a different beast. ALWAYS go through the motions of requiring a collector to validate/verify the debt they are claiming.

                I've never told a creditor "I won't pay them." I have told my creditors I can't afford to pay them what they want on a monthly basis, including their freaking interest. Most major creditors finally caved in and I have new payment programs at reduced interest with five-year pay-off plans and interest down ot 1.75% - 2.00%. All this could collapse if I get a wage garnishment against me for an extended period of time. But, there is very little anyone can do to me for something that is beyond my control, so I'd just go back to square one.

                Sorry about the long response here. But, when it comes down to it, if you have very few assets, there is not much that folks can do other than sue you. Even then, sueing you and collecting on a debt are two very different actions. A lawsuit simply gives the creditor/collector other avenues of trying to get any money/assets you might have.

                Protect your cash assets. Bank accounts can be "garnished." Is your paycheck direct deposit? If so, then you should move to a paper check. Collectors and creditors can be ruthless when it coems to ignoring the laws. You don't wan tto wake up some morning and discover your account is empty. While such actions require a court order and are illegal without a court action, there are plenty of folks who are willing to ignore laws. While you might eventually sue and get your money back, it doesn't help you in the present.

                Local creditors and collectors can act quickly.

                In terms of your credit, kiss it goodbye if you quit paying your debts. My scores fell from the 790 range to 480 in a few months. I don't care.

                Another thing to consider is your employment. For instance, I make very good money in a very stable job. In my circumstance I let my monthly debt payments out-pace my monthly income. I'm not ready to go down the chapter 13 path at this time, but knowing that in a worst case scenario BK 13was available, empowered me.

                In conclusion, while it may not be a crime to not pay your debts, there are consequences for not paying. Know what the consequences are in your state. Sit down and list all your debt and creditors. Take your best guess at the risk involved in not paying each of them. Those you deem the most risky (local, how quickly they can act, etc), you might want to attempt to work with.

                Have a plan of action. Eventually, you will need to address "not paying." If you know that BK is in your future, no big deal. If you can adjust your lifestyle to accomodate wage garnishment, no big deal. If you have assets, you have a problem.

                Probably more info than you wanted. But, it comes down to, "How much can you stomach?"

                Moderators, this should be a sticky. There is a lot of useful information in this thread for newbies.
                The world's simplest C & D Letter:
                "I demand that you cease and desist from any communication with me."
                Notice that I never actually mention or acknowledge the debt in my letter.

                Comment


                • #9
                  Originally posted by treehugger1 View Post
                  I've posted a lot of my opinions related to your question at various places in this forum. I'll repeat a few for you.

                  The first question you should ask yourself is how much of a stomach do you have for dealing with potential collectors and collection activities? If your feathers are not easily ruffled, then there are only a few actions others can take against you. While these are few, they can have heavy implications.

                  Are you judgment proof? Do you own assests? Do you know your state exemptions against actions that might be taken through a judgment? In many states the exemptions for judgments are similar to those for bankruptcy. This won't stop liens against future sale of real property, but exemptions can stop forced sales of real property. Be familiar with your state laws. Google "your state name" followed by exemptions or judgment exemptions, etc.

                  If your state is a wage garnishment state, be prepared for any local creditors and/or collectors to go after the non-exempt portion of your wages. In my state the limit is 25% after taxes. I can live quite fine on 75% of my takehome.

                  Learn the small claims amounts for your state. Small claims actions move quickly. Debts above the small claims threshold generally require the action of a suit. A lawsuit can take time to move through the courts. I would be careful about fighting the tide against a debt you know you owe. While you can temporarily stall creditors/collectors in a court case, if you owe the money, eventually you will not win. It is not a good thing to get too many judgments backed up against you. My plan has been to work with folks who have judgments against me (currently two). One will be paid off, and a notice sent to the courthouse that the judgment has been satisfied, next month. I'm negotiating with a collection company on the other judgment. I'm quasi-judgment proof. The only "assets" I have are my wages. Garnishment can be a "pain" for creditors/collectors in my state, if a large amount of debt is involved. In Oregon, a writ of wage garnishment only lasts for 90 days and then needs to be renewed. Big creditors don't want the hassle of renewing or running the risk of "waiting in line" behind a current writ, only to have their writ expire LOL.

                  The big problem is fees and interest can grow quickly. This is not a problem if you know you will be declaring BK in the future. Judgments can be a problem if they lead to a lien against real property or autos. This can create a 'secured' debt.

                  Some folks advocate not talking with any of your creditors. I preferred to speak with all of mine. I just refuse to make any promises I can't keep. Debt collectors are a different beast. ALWAYS go through the motions of requiring a collector to validate/verify the debt they are claiming.

                  I've never told a creditor "I won't pay them." I have told my creditors I can't afford to pay them what they want on a monthly basis, including their freaking interest. Most major creditors finally caved in and I have new payment programs at reduced interest with five-year pay-off plans and interest down ot 1.75% - 2.00%. All this could collapse if I get a wage garnishment against me for an extended period of time. But, there is very little anyone can do to me for something that is beyond my control, so I'd just go back to square one.

                  Sorry about the long response here. But, when it comes down to it, if you have very few assets, there is not much that folks can do other than sue you. Even then, sueing you and collecting on a debt are two very different actions. A lawsuit simply gives the creditor/collector other avenues of trying to get any money/assets you might have.

                  Protect your cash assets. Bank accounts can be "garnished." Is your paycheck direct deposit? If so, then you should move to a paper check. Collectors and creditors can be ruthless when it coems to ignoring the laws. You don't wan tto wake up some morning and discover your account is empty. While such actions require a court order and are illegal without a court action, there are plenty of folks who are willing to ignore laws. While you might eventually sue and get your money back, it doesn't help you in the present.

                  Local creditors and collectors can act quickly.

                  In terms of your credit, kiss it goodbye if you quit paying your debts. My scores fell from the 790 range to 480 in a few months. I don't care.

                  Another thing to consider is your employment. For instance, I make very good money in a very stable job. In my circumstance I let my monthly debt payments out-pace my monthly income. I'm not ready to go down the chapter 13 path at this time, but knowing that in a worst case scenario BK 13was available, empowered me.

                  In conclusion, while it may not be a crime to not pay your debts, there are consequences for not paying. Know what the consequences are in your state. Sit down and list all your debt and creditors. Take your best guess at the risk involved in not paying each of them. Those you deem the most risky (local, how quickly they can act, etc), you might want to attempt to work with.

                  Have a plan of action. Eventually, you will need to address "not paying." If you know that BK is in your future, no big deal. If you can adjust your lifestyle to accomodate wage garnishment, no big deal. If you have assets, you have a problem.

                  Probably more info than you wanted. But, it comes down to, "How much can you stomach?"
                  I agree with GoingDown.

                  Tree...this is an excellent post, most informative. I'm sure most visitors would get outstanding advice and gain a realistic understanding of what happens in this process.

                  Stick it!!!

                  CPO

                  Comment


                  • #10
                    i hate reading the long posts
                    i just want to know one thing what will happen after being sued and doing nothing

                    Comment


                    • #11
                      Originally posted by mightybuzz View Post
                      i hate reading the long posts
                      You are here because you need free answers, right? Bankruptcy is neither simple or short so long posts come along with that. I saw in your other post that you aren't working....have to be somewhere?

                      i just want to know one thing what will happen after being sued and doing nothing
                      Your creditors or the collectors they sell your debt to will eventually take you to court and win easy judgments against you to take your assets or garnish your wages. Don't have assets or a job now? The judgments will be there waiting years from now to collect when you do. Short enough answer?
                      I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

                      06/01/06 - Filed Ch 13
                      06/28/06 - 341 Meeting
                      07/18/06 - Confirmation Hearing - not confirmed, 3 objections
                      10/05/06 - Hearing to resolve 2 trustee objections
                      01/24/07 - Judge dismisses mortgage company objection
                      09/27/07 - Confirmed at last!
                      06/10/11 - Trustee confirms all payments made
                      08/10/11 - DISCHARGED !

                      10/02/11 - CASE CLOSED
                      Countdown: 60 months paid, 0 months to go

                      Comment


                      • #12
                        Funny - people spend years getting themselves into situations that require or look to bankruptcy as a solution - then all they want is the Cliff Notes version of "what to do". No wonder.

                        Comment


                        • #13
                          well cliff notes or not, i think everyone is different in character, demeanor, lifestyle etc. so cant judge, we all need some kind of help one time or another, and most of the time we must get hit with a brick a few times before we learn our mistake of not standing next to a home while its being built. :p
                          Successful debt reduction starts with a plan and ends with success.
                          get out of debt

                          Comment


                          • #14
                            This is an excerpt from the Oregon Revised Statutes regarding garnishments. Section 18.385 also lists wages on deposit in a bank account as exempt from seizure up to $7500 so long as the funds can be identified as wages. So, either make sure your direct deposit memo entry on your account clearly indicates it's an employer direct deposit, or make sure you can retrieve an image of a paper deposit showing that the deposit was indeed money earned from wages. This is only for Oregon, so you should check your own state laws to see what is exempt from garnishment/seizure.

                            "18.348 Certain funds exempt when deposited in account; limitations. (1) All funds exempt from execution and other process under ORS 18.358, 18.385 (2) to (4), 238.445, 344.580, 348.863, 401.405, 407.595, 411.760, 414.095, 655.530, 656.234, 657.855 and 748.207 and 38 U.S.C. 3101 and 42 U.S.C. 407 shall remain exempt when deposited in an account of a judgment debtor as long as the exempt funds are identifiable.

                            (2) Except as provided in subsection (3) of this section, the provisions of subsection (1) of this section do not apply to any accumulation of funds greater than $7,500."
                            Filed 9/20/07
                            341 on 10/26/07
                            awaiting discharge 12/26/07 (best Christmas present of all!)

                            Comment


                            • #15
                              Incidentally, I had posted earlier last week in another thread about a bank garnishment that happened to me in which the collector wiped out my checking account and kept the $2,000. I contacted my bank and advised that all of the money that was taken was money from wages. I will be getting back 75% of what the judgment collector took under the writ of garnishment because I had proof that the only monies deposited into the account came from my net wages. They still have the $500...but I'll make sure that the trustee knows about that "payment," and hopefully s/he will get it back for distribution to all of the creditors. I just want to cost the collection agency as much as they have cost me in NSF fees...don't be scared, just research, learn, and know. You know the cliche--knowledge is power!
                              Filed 9/20/07
                              341 on 10/26/07
                              awaiting discharge 12/26/07 (best Christmas present of all!)

                              Comment

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