Being sued by creditor

[my4dogs]

I received by certified mail last Monday the paperwork that was filed for a lawsuit from an attorney. Unfortunately I have absolutely no idea where to go from here. I have an appointment Monday with a BK attorney to look into filing a chapter 13. Chapter 7 isn't even an option since I filed in 2005 and learned nothing since it just gave me a chance to start over.
In the letter I got a small slip of paper saying it's not too late to work out a payment plan. Would it make more sense for me to try to work out a payment plan with these people until I can get it together enough to file 13? I'm thinking it would buy me a little more time.
Either way, I'm scared to death and I'm clueless as to what to do. I feel like a deer stuck on a highway dodging vehicles. It's all so overwhelming.

[momofthree]

How much debt do you have? Any idea what your disposable monthly income will be in figuring a ch. 13 payment?

[my4dogs]

I spoke with Consumer Credit Counseling and after pulling our credit reports, our unsecured debt is 45,000. We have a mortgage payment of 1040.00. I have one car payment of 540.00 but my husband desperately needs a newer vehicle. He has a 96 ford truck that is pretty much falling apart and needs new tires, however it is paid off. Last year we made about 95,000 but after paying in over 700.00 a month on the credit card payments that we are able to keep up with, we end up living off of them when unexpected things come up.
We are not behind on our mortgage or the car payment. However, this law suit is forcing me to make some quick decisions which may not be in my family's best interest.

[momofthree]

With $95k of income and a fairly low mortgage payment, you're probably going to end up in 100% payback plan. With $45000 of debt, it would only take $750/mo to pay them back 100% over 5 years. Unless you have very high ongoing medical expenses or a boatload of kids, the courts should easily be able to find at least that much in your budget each month. Another option to consider is debt settlement. You'll find that it isn't normally suggested around here, but if you're going to end up paying 100% of the debt back anyway, then it's worth considering....

[my4dogs]

so I'm paying a little over 700.00 a month on some of the cards. Would it make sense to default on these and then try to settle with them one at a time?
The attorney who is currently sueing me says they will settle for 1800.00 in 4 monthly installments. I can do that but I will have to default on the other cards.
My biggest worry is if this company is sueing me, how many more are to follow? I have to assume all of them would and I can't settle with them if they all start to sue me at the same time.

[LadyInTheRed]

The attorney who is currently sueing me says they will settle for 1800.00 in 4 monthly installments. I can do that but I will have to default on the other cards.

How much is the balance on that card?

[my4dogs]

I don't know what the balance is...but they are suing me for 2500.00. They will settle for 1800.00 paid in 4 monthly installments. This is what they said to me when I called a little over a week ago.

[momofthree]

Many offer to settle before they pursue legal action against you. I was only 2 months late when I began to receive settlement offers. By the time I filed, I was 8 months late and didn't have any legal action begun against me yet. The DAY before we filed, we received a settlement offer of 24% on a card with over a $10k balance!

[my4dogs]

so maybe it makes sense for me to just go ahead and default on the rest of the cards that I've been trying to keep up with and save that money I've been paying them. I can go ahead and make the 400.00 a month payments for the next 4 months to get this one company off my back and will be able to settle with the rest as they come in because I will have the money to do so.
I just don't want to deal with getting law suit after law suit that's why I am considering chapter 13.

[lrprn]

Keep in mind that if you decide to try settling with the cc companies, the IRS considers what you don't have to pay them back as income and you'll be taxed for it next year.

There's really no way to even guess at this point what your monthly Ch 13 payment might be - we just don't know enough about your current financial situation. Set up at least 3-4 free initial consultations with experienced bk lawyers in your area who file a fair number of Ch 13s. You'll learn a lot about what's going to be possible in your situation and where any problem areas might be.

Whenever you have questions, just want to vent, or need some understanding folks to hang out with, we'll be here. Post anytime and we'll help you sort things out as best we can.

[secondtimer]

No matter what. If the court date comes around before you sort things out be sure to show up.

Explain to the judge your circumstance and ask for an extension. You could even ask the court to change the hearing date to give yourself some breathing room.

In some states you can even claim exempt from wage garnishment.

The plaintiff may not even show up = you win.

I've not been served yet so this is all secondhand information gleaned from other posters. Don't know if these tactics really work or not. Be careful.

Tis my plan right now if summons begin showing up before I'm ready to file.

[jayalln]

First off you made a mistake. You stated in your original post that you had no idea what the debt was in reference to. If that is the case then why have you been speaking to the attorney discussing any kind of payment options with him or his firm. I assume you have talked to them. Your speaking to them should only been to inquire what the debt related to. When you went to court you should have denied the claim or ask them to show you evidence of their claim by providing you with who the original creditor is. Remember they have to show that you owe them money. And in many cases the statue for collecting on the amount has ended. You can easily restart the process by simpling agreeing you owe the money to them and not to the original creditor. If this is an attorney I assume he is working for a collector who purchased the account or he is working for the creditor. You need to remember that after a period of time they can't sue you for the debt. The statue limits them on how long they have to sue you after the debt has been defaulted on. It doesn't mean you don't owe the money it just means they have loss their legal rights to per sue legal action against you. You need to find out who this creditor is what the statue is in your state related to your situation and see if the statue has ended if so you can use that in your defense or you can simply deny you know who these people are. I hope this helps some.

[my4dogs]

First off you made a mistake. You stated in your original post that you had no idea what the debt was in reference to. If that is the case then why have you been speaking to the attorney discussing any kind of payment options with him or his firm. I assume you have talked to them. Your speaking to them should only been to inquire what the debt related to. When you went to court you should have denied the claim or ask them to show you evidence of their claim by providing you with who the original creditor is. Remember they have to show that you owe them money. And in many cases the statue for collecting on the amount has ended. You can easily restart the process by simpling agreeing you owe the money to them and not to the original creditor. If this is an attorney I assume he is working for a collector who purchased the account or he is working for the creditor. You need to remember that after a period of time they can't sue you for the debt. The statue limits them on how long they have to sue you after the debt has been defaulted on. It doesn't mean you don't owe the money it just means they have loss their legal rights to per sue legal action against you. You need to find out who this creditor is what the statue is in your state related to your situation and see if the statue has ended if so you can use that in your defense or you can simply deny you know who these people are. I hope this helps some.

No I didn't say I had no idea what the debt was in reference to. I know exactly what it is for. Applied Card Bank and the attorney works for the creditor. The attorney is Michael J. Scott. I am in Texas and I have to assume he will show up in court because he is in Texas too. I also know the SOL has not passed.
What I said was I have no idea where to go from here. I just received the court paperwork from the creditor by certified mail a week ago tomorrow. I know I only have so many days to file an answer but I don't know how to do that and I can't seem to find an attorney in my town who handles this kind of stuff...as if I could afford to pay him anyway.
If I deny that I owe the money when I know I do can't I get in trouble with the courts?

[tigergem]

I'm wondering though... if you default on the other cards to pay this settlement and then decide whether to file BK, if that could be considered to be a preferential payment - - depending upon when you file of course. There is a look back time frame on that. The BK Trustee might demand they pay it back to him for distribution to your other creditors anyway. Something to think about.

[jayalln]

No I didn't say I had no idea what the debt was in reference to. I know exactly what it is for. Applied Card Bank and the attorney works for the creditor. The attorney is Michael J. Scott. I am in Texas and I have to assume he will show up in court because he is in Texas too. I also know the SOL has not passed.
What I said was I have no idea where to go from here. I just received the court paperwork from the creditor by certified mail a week ago tomorrow. I know I only have so many days to file an answer but I don't know how to do that and I can't seem to find an attorney in my town who handles this kind of stuff...as if I could afford to pay him anyway.
If I deny that I owe the money when I know I do can't I get in trouble with the courts?

My apology I apparently misread your original post. Now that we are on equal footing let me make reference to your last sentence. Denying that you owe the money is up to you. But if you agree that you owe the money you will have to pay some or all of it. That you are likely aware of . Remember when I stated in my earlier post that they have to prove you owe them money. The only thing the attorney of theirs likely has is the amount you owe them. I doubt if he has any detailed receipts of purchases you made. I am assuming this is for a credit card?Correct. He likely doesn't have your signature on anything. Remember he has to prove you owe them the money. The law suit is claiming you owe them but can they prove it? Most of the time the way they prove you owe them money is by you agreeing that you owe them. If you agree that yes I had this account and I used it then there you go case for the plaintiff. If you deny it and ask them to prove it with evidence then they have to come up with the evidence. Usually they won't have any to come up with. Now getting in trouble is unlikely this is civil court. The only thing the court will do if it finds that you have been dishonest is raise the amount of the judgment to the plaintiff usually. In rare cases they will make you pay a plenty to the court. The thing you have a problem with is being dishonest knowing you owe them and that is understandable but the question is can you afford to be sued by this creditor or any creditor? Sometime you have to put honesty to the side and do what is best for you and your family and I am not saying being dishonest is the right call for you that is your decision. I hope this helps some.