Hello all, I have got car loan on my name for someone else and person who I got the car could not make payment so the bank came and got the car back. In that time bank had sent me letter to settle the money I owe on that car to them but I was not there so could not respond to banks letters. Now, few years later the attorney the attorney represents the bank has got levy on my house. So, I make thousand dollar up front so they will take the levy off and made arrangements now where I am making regular monthly payments to them. I called the original bank who I had got the loan from and the amount they are saying that I owe to them is about about six thousand less than what attroney is trying to collect from me. The bank said once they turn the account over to attorney that represents them than they no longer can discuss anything with me. The monthly payment I am making to the attorney's office 35% of them goes into the interest that keeps occuring. I tried to call them and settle but they would not come down less than thousand dollar. The bank is saying the amoutn I owe to them is $12,895 The attorney's office is saying they received $16,695 from bank to collect from me. The judge awarded them $18,895 + 6.25%+Court cost interest. Currently I owe them as of today $19,985. I am still making monthly payment. But if I keep making montly payment it's going to be long time before I can pay them off. And the pay off is not small number eithr around $19,000. Can they still keep charging me interest? Not sure what to do. Thanks for any advice.
Welcome to Creditnet xxtino. This is a tough situation you're in. They already have a judgment against you, so yes- they can collect what the judge told them they can collect, including interest. Do you think the original judgment was obtained lawfully? If not, you may want to talk to a good consumer protection attorney about what options you have to fight the judgment.
Hi Joshua thanks for the reply...I am not sure how I can check if it was obtained lawfully or not. I really don't have lot of documents to track everything back when the judgment was awarded. I am not sure if they sent me letter and if I was suppose to be there when the judgment was awarded. I don't know what to do. Twenety thousand that attorney is asking is lot for me. I have been making him payment but the way interest rate is (6.25%) lot of the money goes toward interest. Not sure what to do. I really want to take care of this debt (eventhough I got the loan from someone else). Any help would be greatly appreciated it. Thank you
Hi Joshua, I am not sure if I was served with Summons or not. Is there anyway for me to find out now (when and where the summmons was served)? Thank you again for your help
You may want to try checking with the court in the county where you live. They might have a website you can use to search for the records.
I called them and it was served at the right address. What is Process Server? It was served/deliveried via that.
Xxtino Hi â?? I got some questions: Do you have a written agreement between the person whom was suppose to make the payments but did not? Could you go after them for any money â?? possibly in small claims court? What state are you in? What year was the judgment granted? If I read your post correctly there was a lien placed on your home, but you entered into an agreement to pay 1,000 and they were to release the lien â?? then you entered into an agreement to make monthly payments correct? Do you have proof a release of lien has been entered and there is no lien on the property? If you donâ??t mind me asking what is the monthly payment? Depending on what state you are in you may want to take the garnishment vs. the monthly payments you agreed to. So if you currently are not able to make the monthly payment you might find the weekly garnishment will be a more manageable amount. Little bit about garnishment: The amount of pay (salary, wages) subject to garnishment is based on an employee's "disposable earnings," which is the amount (wages) left after legally required deductions are made. Deductions include federal, state, and local taxes, the employee's share of State Unemployment Insurance and Social Security. The Federal law sets the maximum amount that may be garnished in any workweek or pay period - the weekly amount may not exceed the lesser of two figures: 25% of the employee's disposable earnings, or the amount by which an employee's disposable earnings are greater than 30 times the federal minimum wage (currently $7.25 an hour). Depending on what state you live in you might find that the State garnishment max is lower than the Federal Law of 25%. Example, I live in Michigan which follows Federal Law of a max of 25% of my disposable earnings is garnishable. But if I lived in New York the max would be 10% of my disposable earnings are garnishable. If you want to pursue the improper service angle, you will have to research how to vacate a judgment in your state and there might be time limits are on when you can petition the court. Also keep in mind if the court does vacate the judgment due to improper service it does not stop the law firm from re-filing the lawsuit and process starts all over again. Oh and yes they can continue to charge interest till the debt is paid in full; it varies from state to state and can range from 15% (Maine) to 1% above the 5-year T-note rate (Michigan) â?? which is why itâ??s important to research your state judgment laws. Good luck with everything.
Hi Desdemona - Thanks for taking time to reply to my post. I am answering some of the questions you had on the post. You mentioned something about Wage Garnishment being better than making monthly payment and I understand that it might be less than what I am paying now ($250.00) but if I have to pay these individuals sooner or later than I might as well pay off as soon as possible (at least if I can). Plus, being the interest rate added to what I owe to them makes me want to pay them as soon as possible. Do you have a written agreement between the person whom was suppose to make the payments but did not? Could you go after them for any money – possibly in small claims court? ***I do not have written agreement between the third person who I signed the loan for. I do not have any written agreement or proff than how can I go after him? I recently just spoke to him and he said he does not have money to give me. He is going through divorce and he is saying his wife is trying to get more money from him so he really does not have any money. Other than he can give me thousand dollar for time being now. I told him that I will take thousand dollar and I will put it toward what i am making monthly payments now. (my whole thing is to get out of monthly payment as soon as possible for not keep paying 6.25% interest rate on $19,000 that we still owe them) What state are you in? What year was the judgment granted? I am in Alabama. Judgement was awarded in 12/2008 If I read your post correctly there was a lien placed on your home, but you entered into an agreement to pay 1,000 and they were to release the lien – then you entered into an agreement to make monthly payments correct? Do you have proof a release of lien has been entered and there is no lien on the property? I went and checked with city court house and the person their said it shows that lien was placed but does not show anything being take off yet. But I think I am little less concerned now because I know that atleast they will not put it for sale because I am making payments on judgement now. Again I see what you are saying with checking wage garnishment law because that would may help me with making less payment than waht i am making now. But with interest building up I think I rather pay as much as I can now and get over with this thing now. I don't think I can approprach improper service angle because they did sent the documents to correct address but I just wasn't there so it's my fault that I did not check my mail or got it forwarded to where ever I was. My thing is this lawyer not willing to work any tiny bit with me. They are not willing to take five thousand less on twenty thousand dollar claim. I have some money saved so I think I will go ahead and give them that now and try to pay off as soon as possible. Any better suggestions you have?
Depending on your total financial picture, and the laws in your state regarding judicial liens, it may be worth looking into bankruptcy as a solution. If you have other debts which you are struggling to pay, and if the house is currently mortgaged (or otherwise has less equity than your homestead exemption) then it may be possible to discharge the underlying debt, vacate the judgment, and strip the judicial lien in bankruptcy. That way, you can stop sending your hard-earned money to this collection attorney. Also, outside of bankruptcy, you should check to see if a judicial lien can be foreclosed upon in your state. In some states, a judgment creditor can force the sale of real property which they have placed a lien on; in other states, the judgment creditor CANNOT force a sale of the property, and simply has to wait for the owner to sell or refinance at which time the lien must be paid in order to get clear title. If it is the case that this judgment creditor CANNOT force the sale of your home, and if you plan to live there indefinitely, then maybe you should quit paying them, and as the years go by, they will become more willing to settle the debt for less than face value.
Hi BCOHEN2010, Thanks for your reply. Equity on the house is about same as what I owe. So, I mean the house is worth 125,000 and the attorney is asking 20,000 or so. I had hired local attorney to deal with this but the law office that represents bank is not willing to take anything less than what I owe. The house is on me and my brother's name both so my attorney told them that the house has mortgage and I have other person on house so they will not be able to get all their money if they force to sell the house but that did not work either. So, I have been continue making payments to lawyers office. I really don't want to file bankruptcy because I have heard that is really bad on your credit. Also, I have work in defense industry and I have secret clearance so if I have bankruptcy I don't think I can get my clearance renewed. I am in Alabama I am not sure if the judicial lien can be closed in my state or not but since the attorney who I had seek help from said that they can sell my house I am thinking in Alabama they can foreclose.
Xxtino Good call on hiring a lawyer â?? not surprising that the judgment creditor wonâ??t accept a settlement, they have a legal right to the full amount and they are holding the lien card(s). I wouldnâ??t go the BK route; this would be a last resort â?? when your monthly obligations excess your monthly compensation. If you can continue to make this 250 dollar per month payment as well as all of your other monthly obligations, donâ??t risk your credit by filing BK and losing your home as well possibly your security clearance at work. Now is not a time to feel sorry for the guy who put you in this situation. I am not saying you are blameless in this by any means (LACK OF WRITTEN CONTRACT) but this â??Iâ??m going through a divorce bah, bah, bahâ?¦â? will not last for the next 20 years (total number of years this judgment will haunt you) if he promised you money get it WRITING. The judgment creditor (collection lawyer) is not letting YOU off the hook â?? you shouldnâ??t let him either. Discuss with your lawyer what would hold up in court in lieu of a written agreement. Did he make any payments prior to the repo? If he made payments â?? would the courts concerned this an oral agreement â?? in other words not a gift. Think of it this way, if the situation was reversed would he accept a 1000 dollars on a 20K debt? Why should you? Unless your lawyer can find a procedural error the only way to resolve this is to make larger payments and get some money from the guy who defaulted on the payments to begin with. Oh and if you decide to increase your payment - don't get it in writing that way if by some chance you can't make the higher payment one month you would only be obligated to make the lower payment without fear of voiding the payment agreement. This is a very painful life lesson to learn. One small bright light â?? interest on a judgment in Alabama is 12% - so your 6.25% is either a blessing or mistake they didnâ??t catch. Lets know what your lawyer says about going after the guy who defaulted to begin with.
Hi Desdemona, thanks for the reply. Yes I thought so and this is their business so I don't blame them. It's my fault so now I am paying price for it. I felt sorry when I helped him and not feeling sorry now but I can't really get anything from him because what can you do if someone says they don't have anything. Plus I don't have any written agreement with him. He gave me around three-four payments but it was not check or something that I can keep as proof. So, I don't have really any proof. This is just hard learn lesson for me. Since interest on judgment on Alabama is 12% I should not complain about 6.25% interest. I am going to ask the lawyer about what would hold up in the court in the lieu of written contract. He is keep saying that they should not be able to charge me interest after the amount/case has been turned over to the lawyer/collection attorney(s). I told him I consulted with lawyer and there is no way to get off the interest and money that we owe to them but he insists that I consult with other attorney (and he is going to do same with other attorney but he thinks I need to speak to attorney here because now he is in different county). He also mentioned that state has this/different law that after three or some years this gets dropped off your credit report but I don't know how because I checked everything and can't find nothing like that. I am trying to pay this off as soon as possible by borrowing money from family members. Thanks again for your advice I really appreciate.
Xxtino Not sure weâ??re getting the full story on who was financially responsible for the vehicle but thatâ??s your personal affair â?? I personally would attempt to get more $$ out of this guy. As for the interest rate â?? I am not 100% sure of who you are referring to when you say â??heâ? is keep saying they shouldnâ??t charge interestâ?¦â? I assume you mean the car guy. I would go with your lawyer, I did some quick Googling and I canâ??t find any Alabama state code that states a creditor has to stop charging interest after the account is sold to debt collector â?? in fact the debt collector can charge service fees. You could ask for a complete financial breakdown where they came up the total amount due and total service charges â?? what % of your monthly payment is going to the principle. Maybe thatâ??s an angle you can discuss with your lawyer â?? I would argue I need a complete breakdown of total amount due. As for dropping off your report after three years â?? what â??heâ? is referring to is SOL (statute of limitations) on the collection of a debt on an open account. Meaning a creditor has three (3) years from the DOFD (date of first delinquency) to attempt to collect on a debt on an open account. If they fail to collect the debt in that three year window â?? they are not legally allowed to attempt to collect the debt from you. That doesnâ??t mean that creditor has to stop reporting to the credit report after 3 years â?? they can continue to report the debt to the CRAs for 4 addition years. Written contracts, as in your case the finance agreement for the vehicle, the SOL is six (6) years. Please note that there are JDB (junk debt buyers) who will purchase debts right on the cusp of a SOL date and aggressively attempt to collect the debt hoping you donâ??t have the knowledge of your states SOL dates. Good luck with the family members; that is going to be a humbling conversation. If you are able to get the $$ to offer a settlement make sure you get everything from the judgment Creditor in WRITING, including how it reports to the CRAs. If the collection is reporting, ask for it to be deleted â?? you will not get the judgment deleted at this time. The judgment is reported from courts not the judgment creditor and they must report to the court that you have paid the debt and it will report as satisfy. You can ask your lawyer about petitioning the courts to vacate a satisfied judgment â?? that could have it removed off your report. Good Luck
Desdemona, I am financially responsible for paying the debt. Sorry when I say "he" I mean the guy who I got the car for. The creditor is reporting this in my credit report. So, like you said I will ask them to delete this off my credit report. Thanks for your advice.
Hey JoshuaHeckathorn, no nothing yet. Actually in this updates will depend upon me if I take any action than there will be update otherwise none. I have payment due for June so when I go there this month I will try to pay them seven thousand and hopefully that will bring down the total sum I owe them. Thank you, Desdemona and BCOHEN for the advice.
