Summons

[airahcaz]

Some folks ignore cc debt and all collections till the SOL.

Is there any way to determine situations when the OC will keep the debt as their own and file lawsuit?

[Freddy03]

From my experience if the credit card company knows you are working and own a house they will sue. If you contact the collection agency and ask for payments, they know you have some money to pay them.

I have had 3 lawsuits so far and all 3 cases were extremely different.

One sued right at 120 days when another waited almost 2 years. All 3 of my cases were NOT sold to a debt buying agency.

[catleg]

Freddy is right. It is extremely unpredictable but they will pull your credit and if you're still making a house payment and car payment then they'll figure you have some income and sue you. In some states (such as NJ) it has gotten so automated that it's really easy and cheap to file a lawsuit. NJ is not a good state to be a debtor. The state courts are in the pocket of the collection attorneys. The BK courts on the other hand are extremely fair here.

[treehugger1]

As others mentioned, there does not appear to be any rule. I have had several accounts that were actually sold to jdb's about 2 years ago. They don't call, and they have not initiated any suits. I don't think they will given that I live in a very remote area in terms of JDB attorney firms. (This may become easier in the very near future as Oregon has/is moved to an electronic format. I dontl think my local circuit court is plugged into the system as of yet.

I had two original creditor accounts with Chitibank (one with Chiti and the other a Sears.) I was sued for both accounts within 18 months of default. They have judgments and they know I have a job. They have not attempted to garnish wages. Of course, because I am under a permanent 15% student loan garnishment, the 10% may not seem lucrative to the plaintiff's attorney. (I think the attorney firm bills hourly, and so they have nothing to gain by screwing around with garnishments. They already got paid.) In addition, they have to refile and re-serve a garnishment writ every 90 days in my state. I think the attorney firm has finished their job and the judgments are out in limbo land. These judgments are over a year old with no action.

I was sued on one Crapital1 account after 30 months of not paying. The attorney upstate got a judgment and wage garnishment. This has been satisfied through wage garnishment. The other three C1 accounts are beyond the Virginia SOL (I live in Oregon, but I have choice of law.)

Other than those 3 major accounts and some suits from local creditors, I have not been sued by my remaining creditors or jdbs (about 15 or so.)

My credit report looks like the aftermath of a gigantic train wreck. My defaulted creditors have not even pulled my credit reports for over a year.

Keep in mind that I was a bit ahead of the curve when I started defaulting in 2006. In another 24 - 30 months, most of my defaulted non-student loan debts will be beyond the SOL of 6 years in my state or beyond the contractual SOL where the original agreement stated a state of jurisdiction with SOL less than my state.

Final answer: There is absolutely no way to tell when you could be sued. I have friends withotr jobs or assets who were sued before charge-off. Others were sued within 90 days of default. Others have never been sued.

Your state laws probably determine the likelihood of suit rather than whether or not you have a job or assets. In some states, it costs the plaintiff a considerable amount of money to initiate a suit. In some states, you have mandatory state arbitration, etc, etc. In some staes, small claims suits can be initiated by attorneys. In some states, attorneys are not allowed in small claims. With small claims now set at up to $7500 or $12000 threshold, these can be easy to sue for if attorneys are allowed to represent plaintiffs in small claims. This is not the case for small claims in Oregon.

Bottom line for me is that I can survive a continuous 25% wage garnishment. I budget each month with 15% - 25% decrease in takehome pay due to garnishment. I have no other non-exempt assets. What can you stomach? Only you can answer this. Prepare for the worst and consider yourself blessed when the worst does not occur.

Just my experience! Your mileage will vary. TH

[airahcaz]

As others mentioned, there does not appear to be any rule. I have had several accounts that were actually sold to jdb's about 2 years ago. They don't call, and they have not initiated any suits. I don't think they will given that I live in a very remote area in terms of JDB attorney firms. (This may become easier in the very near future as Oregon has/is moved to an electronic format. I dontl think my local circuit court is plugged into the system as of yet.

I had two original creditor accounts with Chitibank (one with Chiti and the other a Sears.) I was sued for both accounts within 18 months of default. They have judgments and they know I have a job. They have not attempted to garnish wages. Of course, because I am under a permanent 15% student loan garnishment, the 10% may not seem lucrative to the plaintiff's attorney. (I think the attorney firm bills hourly, and so they have nothing to gain by screwing around with garnishments. They already got paid.) In addition, they have to refile and re-serve a garnishment writ every 90 days in my state. I think the attorney firm has finished their job and the judgments are out in limbo land. These judgments are over a year old with no action.

I was sued on one Crapital1 account after 30 months of not paying. The attorney upstate got a judgment and wage garnishment. This has been satisfied through wage garnishment. The other three C1 accounts are beyond the Virginia SOL (I live in Oregon, but I have choice of law.)

Other than those 3 major accounts and some suits from local creditors, I have not been sued by my remaining creditors or jdbs (about 15 or so.)

My credit report looks like the aftermath of a gigantic train wreck. My defaulted creditors have not even pulled my credit reports for over a year.

Keep in mind that I was a bit ahead of the curve when I started defaulting in 2006. In another 24 - 30 months, most of my defaulted non-student loan debts will be beyond the SOL of 6 years in my state or beyond the contractual SOL where the original agreement stated a state of jurisdiction with SOL less than my state.

Final answer: There is absolutely no way to tell when you could be sued. I have friends withotr jobs or assets who were sued before charge-off. Others were sued within 90 days of default. Others have never been sued.

Your state laws probably determine the likelihood of suit rather than whether or not you have a job or assets. In some states, it costs the plaintiff a considerable amount of money to initiate a suit. In some states, you have mandatory state arbitration, etc, etc. In some staes, small claims suits can be initiated by attorneys. In some states, attorneys are not allowed in small claims. With small claims now set at up to $7500 or $12000 threshold, these can be easy to sue for if attorneys are allowed to represent plaintiffs in small claims. This is not the case for small claims in Oregon.

Bottom line for me is that I can survive a continuous 25% wage garnishment. I budget each month with 15% - 25% decrease in takehome pay due to garnishment. I have no other non-exempt assets. What can you stomach? Only you can answer this. Prepare for the worst and consider yourself blessed when the worst does not occur.

Just my experience! Your mileage will vary. TH

You don't have to answer, but why not file bk?
Secondly, you had no mindset, nor incentive for that matter, to settle any beforehand, and thus rolled the dice, correct?
Lastly, once served, why not try to settle? (unless of course lack of funds)
Thx

[treehugger1]

Go back a few years and read my posts leading up from my initial panic to decision not to file a BK 13. Bottom line: My student loan interest would have increased by $35K, I would be in a 100% payback plan, and the local trustee would have seriously limited my ability to defer wages in 403(b) and 457 deferred-tax savings accounts. I have stated this before and will state it one more time. I do not care about my credit. I care about saving and protecting money in exempt retirement/tax-deferred accounts. I cannot get out of my student loans. I recruited legal counsel and a CPA to help me make a decision. A BK 13, post 2005 revisions, would have cost me 10's of thousands of dollars over 5 years. So far, My creditors have received about $17K. I fully suspect that about 80% (or more) of my outstanding unsecured debt will be SOL; as in shit-out-of-luck and statute-of-limitation defensible. My student loans are being paid at a higher rate (15% of disposable income) then the initial 25 years monthly payments and my student loans are being reduced by nearly $1.5K per month. I kept two credit cards that are paid off each month. My credit score is beginning to improve 3-10 points almost every quarter! But, it makes no difference. CASH IS KING!!!!!

I am BANKRUPT but filing was a more evil option post 2005.

Do your own research if you are a high-wage earner.

[frogger]

Go back a few years and read my posts leading up from my initial panic to decision not to file a BK 13. Bottom line: My student loan interest would have increased by $35K, I would be in a 100% payback plan, and the local trustee would have seriously limited my ability to defer wages in 403(b) and 457 deferred-tax savings accounts. I have stated this before and will state it one more time. I do not care about my credit. I care about saving and protecting money in exempt retirement/tax-deferred accounts. I cannot get out of my student loans. I recruited legal counsel and a CPA to help me make a decision. A BK 13, post 2005 revisions, would have cost me 10's of thousands of dollars over 5 years. So far, My creditors have received about $17K. I fully suspect that about 80% (or more) of my outstanding unsecured debt will be SOL; as in shit-out-of-luck and statute-of-limitation defensible. My student loans are being paid at a higher rate (15% of disposable income) then the initial 25 years monthly payments and my student loans are being reduced by nearly $1.5K per month. I kept two credit cards that are paid off each month. My credit score is beginning to improve 3-10 points almost every quarter! But, it makes no difference. CASH IS KING!!!!!

I am BANKRUPT but filing was a more evil option post 2005.

Do your own research if you are a high-wage earner.

If you can control your net income, therefore controlling garnishments, then not filing for bk can work very well. Looks like you've got a good plan.

[airahcaz]

If you can control your net income, therefore controlling garnishments, then not filing for bk can work very well. Looks like you've got a good plan.

Hi, how does one 'control' net income? (besides maxing out 401K, etc, if that's what was meant)

[catleg]

tree, have you ever worried about being 1099'd on these debts?

[shark66]

My line of thinking would be that the most important thing to consider is how much it will hurt if they sue...

Do you work and have wages that can be garnished? Can you survive with 25% being taken out of your paycheck?

Bank accounts that hold a significant amount of money? Better empty them out now...

Do you own a house they could put a lien on? Granted, if it's underwater...who cares, for the most part...

My $0.02 only...

Good luck.

[treehugger1]

I'm not out to control my net income. 25% is based on any pretax-deferred income. You do not get to subtract your tax-deferred contributions before garnishment. That would be great, but it is not the case.

As to 1099's. Yes, this is a potentially big issue. Again, I can only suggest you speak with a reputable CPA or tax attorney. It appears you can legally reduce your exposure to taxable amount on a 1099 forgiveness of debt even if you are not insolvent. There are very specific rules regulating "what" is supposed to be reported as income when it is forgiveness of debt. It is far too complicated for me to understand, but I'll pay someone to sort it out if I need to. You can't remove your obligation to pay the taxes, but the amount that is considered "reportable income" is a job for your accountant. It is also true that "all things in life are negotiable" even taxes owed. I'm not the expert, but I have a couple of colleagues who are. I'll worry about 1099's if they are mailed out. I've also worked out my own deals with the IRS. Contrary to some opinions, I found the IRS to be quite pleasant and acommodating as long as I didn't try to hide from them or ignore them. I'll cross the bridge...

Shark, Yes you are absolutely correct in my opinion. I have no assets that are within reach or are non-exempt. I can hold out for another 5-6 years if possible, and depending upon the bankruptcy laws, possibly file a BK7. Or, if I determine I have enough set aside for retirement and my student loans are paid down to a reasonable level, declare a BK 13. For now, my method works well for me.