Charged off . . now what?

[jb4lcm]

I have 88,000 in debt on 2 business credit cards. They just charged off. The bank called and offered 50% settlement, but I obviously don't have that kind of cash or I wouldn't be in this mess to begin with. My business is seasonal - which is now over for 2010 - and I don't have enough saved to weather the winter til March. I'm doing anything I can to just survive. Am I correct that if they file a law suit they can actually take money from my bank account? Take a car that is paid for? What about the business bank account - can they take that over as well? I'm a sole proprietor so there's no protection in place. How bad is it?

JB

[jo23171]

Hi there,

THEY CANNOT TOUCH ANY PROPERTY UNLESS YOU PUT AS A COLLATERAL.

Credit cards is unsecured debt, it means if you default there not no collateral (property or personal belongs) they can take away. Unsecured credit pretty much means borrow at your own risk.

Once they do the charge off they will either sell the debt to a collection agency or sue you. In the state I live in they have to sue you within 5 years once you stop paying them, after 5 years they cannot sue you anymore. I stopped paying my credit cards almost 2 years ago and they still have not sued me. I spoke with an attorney and he told me the creditors usually wait until the last year to sue.

The creditors cannot take away your car(assuming it is paid for) or the money out of your bank account. Again, credit cards is unsecured debt, they cannot touch anything you have.

Once they take you to court and win they will put a lien on you and apply for wage garnishment (25% off your paycheck will be deducted and paid to the creditors every month until the debt is paid off). You will not be able to finance a home or a car until this "lien" is paid off or it expires ( I think after 7 years).

The collection agencies will call you and tell you all kinds of lies to try to scare you into paying the debt, DON'T BELIEVE IN ANYTHING THEY SAY. I RECOMMEND YOU DON'T EVEN ANSWER THEIR CALLS. It will only get you more stressed. I changed all my phone numbers.

I had a line of credit w/ BofA for $75k. 2 years ago they offered to settle for just $12k. Since it was not the only debt I had I declined.

I don't know if they can touch your business account, I closed and withdraw all the money out of my biz account and put in my personal because I knew they could not touch it.

[jo23171]

I did some further research and the creditors CAN take the money out of your account AFTER they get a judgment against you.

[treehugger1]

Hi there,

Once they do the charge off they will either sell the debt to a collection agency or sue you.

Where did you get this? I have plenty of charge offs 2-3 years old. This debt has not been sold nor have I been sued for it.

The creditors cannot take away your car(assuming it is paid for) or the money out of your bank account. Again, credit cards is unsecured debt, they cannot touch anything you have.

Not true. Once they have a judgment, they can go after any and all non-exempt assets.

Once they take you to court and win they will put a lien on you and apply for wage garnishment (25% off your paycheck will be deducted and paid to the creditors every month until the debt is paid off).

They may or may not apply for wage garnishment. I have several judgments and not all judgment creditors have attempted to garnish my wages after a year now. My wages are currently garnished by others.

Be careful about posting "facts."

[jo23171]

The statue of limitation is 4 years in my state, a lawyer told me they usually wait until the last year to sue, but it all depends on the amount owed and if you have real estate. If you owe less than $1500 they may not sue.


Not true. Once they have a judgment, they can go after any and all non-exempt assets. --- I made a mistake on this one.