freaking out... need some help!

[brainless twit]

I haven't been here in a long time, but I need any information or advice you guys can give me. I'll try to keep the long story short.

• Summer 2009: I was seeing a doctor and had a balance after insurance that I was making payments on.
• Late 2009: I got divorced and moved. I called the doctor's office to tell them I would be unable to make payments for a few months and they said it was fine. My balance was $800.
• March 2010: I called the doctor's office to resume payments, and they informed me that the debt was sold to a collection agency. The billing lady stated I would have to wait until I received a letter from the collector. I never received a single letter or phone call.
• November 2011: I was served with a civil summons from an attorney's office with the doctor listed as plaintiff. I sent a certified letter requesting validation of the debt.
• December 2011: I received validation of the debt, along with an added $174 in fees from the collector, making my total $974.
• 2012: I offered to settle with the collection agency. They refused any settlement or payment plan and say if I don't pay the full $974 by the 31st, they will pursue the judgment against me.

So here are my questions:

First, how can the doctor be listed as the plaintiff when they no longer own the debt? I called the billing department this morning to verify that. She clearly told me that she cannot accept any payments because the collection agency owns the debt now.

Second, I am unemployed after resigning from my job in December (a "quit or be fired" situation). I'm not drawing unemployment. The only property I own is my car. What can they really do to me when they get the default judgment? Put a lien on my car?

Third, what in the WORLD can I do in this situation? I didn't file an answer with the court within 20 days like the summons said, because I thought my letter to the collector requesting validation of the debt counted as a response. (Stupid, I know.) Plus I'm not disputing the debt - I know I owe it and I'm willing to pay, but I can't pay the full amount.

I apologize for the length, but I am desperate here. Please help!

[GoingDown]

I haven't been here in a long time, but I need any information or advice you guys can give me. I'll try to keep the long story short.

• Summer 2009: I was seeing a doctor and had a balance after insurance that I was making payments on.
• Late 2009: I got divorced and moved. I called the doctor's office to tell them I would be unable to make payments for a few months and they said it was fine. My balance was $800.
• March 2010: I called the doctor's office to resume payments, and they informed me that the debt was sold to a collection agency. The billing lady stated I would have to wait until I received a letter from the collector. I never received a single letter or phone call.
• November 2011: I was served with a civil summons from an attorney's office with the doctor listed as plaintiff. I sent a certified letter requesting validation of the debt.
• December 2011: I received validation of the debt, along with an added $174 in fees from the collector, making my total $974.
• 2012: I offered to settle with the collection agency. They refused any settlement or payment plan and say if I don't pay the full $974 by the 31st, they will pursue the judgment against me.

So here are my questions:

First, how can the doctor be listed as the plaintiff when they no longer own the debt? I called the billing department this morning to verify that. She clearly told me that she cannot accept any payments because the collection agency owns the debt now.

Try searching for "Junk Debt Buyer". If the collection agency bought the debt, that's what they are now. In most cases, the collection agency calling you is not the Junk Debt Buyer, but merely a third party debt collector hired by the Junk Debt Buyer to attempt to collect the debt from you. Fortunately, both Junk Debt Buyers and Collection Agencies are subject to the Fair Debt Collection Practices Act, so you can get them to stop calling you by sending them a cease and desist letter. As unfair as it sounds, Junk Debt Buyers often pay only a tiny fraction of the face value of the debt, somewhere around 3 to 7 cents per dollar of debt, to the original creditor, and then are entitled to collect the entire face value plus interest. But most of them will settle for far less because they paid so little for the debt, and so even a steeply discounted settlement is still making them a huge profit.

Second, I am unemployed after resigning from my job in December (a "quit or be fired" situation). I'm not drawing unemployment. The only property I own is my car. What can they really do to me when they get the default judgment? Put a lien on my car?

They could put a lien on your car, but in my experience, they don't even bother with that. I have a small default judgment against me and they never put a lien on my vehicle, nor did they ever take it from me. All they did was call me on the phone about it, make threats about taking stuff from me and send me nasty letters. But other than that, they never did anything to me, because I am judgment proof. I have no significant assets, no wages to garnish, and no checking account to seize.

They mainly seem to go after wages and checking/savings accounts through garnishment. Remember, once someone files a lawsuit against you, your money is no longer safe in a checking/savings account.

Personally speaking, I would try to calm down and then get all of my money out of whatever banks you might have it in, start using cash, money orders, and pre-paid debit cards to pay for everything from now on.



Third, what in the WORLD can I do in this situation? I didn't file an answer with the court within 20 days like the summons said, because I thought my letter to the collector requesting validation of the debt counted as a response. (Stupid, I know.) Plus I'm not disputing the debt - I know I owe it and I'm willing to pay, but I can't pay the full amount.

No, the DV letter does very little in reality. It does not stop them from filing a lawsuit. It merely stops them from calling you on the telephone until they "verify" the debt, which is often little more than sending you a letter saying when they bought the debt and from who. It is often nothing more than a few sentences they typed out on paper and then sent to you. I don't even bother with DV letters anymore. I just send them a Cease and Desist Letter, and get them to stop calling me on the phone.

I apologize for the length, but I am desperate here. Please help!

Now, please take some time and read the stickies above, especially the ones about EXEMPT FUNDS, lawsuits, garnishments, etc. Most of your questions have already been answered in them.

[brainless twit]

I did read the stickies before I posted. I was an active reader/poster here for a long time; I didn't forget the protocol.

I'm not receiving any phone calls from the collection agency; I have never received anything from them until I got served. All communication since then has been in writing.

My bank accounts are safe considering I have maybe $300 total in them and no income. I haven't kept large sums of money in the bank since before my BK7.

I was simply asking what action I should take. I can't pay the full amount by the 31st, so I'm assuming the collection agency (an attorney's office, actually) will get the default judgment. I was making sure there was nothing else I could do other than wait.

[GoingDown]

I did read the stickies before I posted. I was an active reader/poster here for a long time; I didn't forget the protocol.

I'm not receiving any phone calls from the collection agency; I have never received anything from them until I got served. All communication since then has been in writing.

My bank accounts are safe considering I have maybe $300 total in them and no income. I haven't kept large sums of money in the bank since before my BK7.

I was simply asking what action I should take. I can't pay the full amount by the 31st, so I'm assuming the collection agency (an attorney's office, actually) will get the default judgment. I was making sure there was nothing else I could do other than wait.

Can you afford to lose the $300 in your checking accounts? If not, I would get that out of them, just in case they make a move on them. Also, you might want to close those accounts, because some banks charge fees just for responding to a wage garnishment, even if there is little or nothing left in the account. That may cause the account to become overdrawn, leading to more fees. Check with your bank about this to make sure. And if there are fees for responding to a court order such as a wage garnishment, I would close them.

Other than that, there isn't a whole lot left for you to do.

I would prioritize whatever money I had left for things like rent, utilities, food, transportation, etc. The last thing I would ever pay is this debt. And only at a very steeply discounted settlement amount, and of course, I would get it in writing from them with their letterhead and their signature before I would pay them a dime. And keep in mind, you may get a 1099-C for any amount "forgiven" or "cancelled", so make sure you save back some money for taxes next year.

[bcohen]

I suggest you research what are the nonbankruptcy exemptions in Kentucky, and if there is no exemption for money in a bank account, then I suggest you close your bank account(s) and go to an all-cash and money order basis. In some states, you can exempt a significant money in bank account(s) from garnishment, whereas in some states you can't exempt anything at all. In Arizona, a judgement creditor can take all but $150 in a bank account, however most of that would be gobbled up by bank fees to respond to the judgement, so the exemption really protects the bank rather than you.