Credit Card in Collections

It is true that if the creditor wins the lawsuit, the creditor cannot garnish wages; the creditor would win a judgment which, when filed of record, could attach to the proceeds of any future sale of real property. I would be careful about making any payments without getting legal assistance. If it is true that the statute of limitations is almost at the end, which may not be true (creditors often lie to get collections), but if it's true, then THE PAYMENT OF ANY PORTION OF THE DEBT COULD REACTIVATE AND REINSTATE THE DEBT SO THAT THE STATUTE OF LIMITATIONS BEGINS AGAIN. I suggest your parents contact Legal Services of North Texas and request free legal assistance to get some advice and counsel on this issue before doing anything. that's my two cents worth

I have a friend whos parents are being sued by citi bank and target right now for about 12,000 and 5,000 they live in assisted living and can not afford to pay so she got an elder attorney who specializes in debt and asset protection.

they can sue you but usually for large amounts. for smaller amounts under 2000 they usually offer a settlement. there is a statute of limits that says once it pases they cant sue you but EVERY time you talk to them or respond to them or have any contact with them AT ALL it starts the clock all over again. even if you answer the phone and say "she will call you back" that is a response that you have gotten a message from them. any contact is considered active and you need to remain inactive with them in order to have a viable statute of limits.

so if its over a lot of money you might want to consult with an attorney who knows elder law and asset protection laws... not just credit/bankruptcy law.

by the way bankruptcy might be an option but if you file chapter 13 then they are obligated to pay the settlement amount for a legnth of time like 5 years depending on the amount setteled for. but they can keep 60k worh of personal assets only. so if they have money they would need to "gift" it, or put it in a trust fund for their elder care or find another way to protect it legaly so they dont loose it. (this is all depending on the amount they owe. my friends parents owe like 35K total so its quite a bit.) but its best to find a lawyer if we are talking about a large sum of money. You also need to worry about a default judgment and they can come take your assets from your home to cover the money owed. so be careful. if its a lot of money then consult with an attorney.

A. J

Yes, they can sue. Will they? Typically the amount has to be very large to make it worth their while, because winning a lawsuit does not mean guaranteed payment, it means they must expend resources and they will get a judgment but not necessarily any money. So right off, the lawsuit is an extra expense for them.

As long as you continue to talk to them and don't drop off the face of the planet, they likely will not sue but that also depends on the character of the collections company. If they are afraid of losing their rights because of the statute of limitations, they may decide a suit is worth it.

Consequences of suit - if they win, they will get a judgment that will go into the public record and on their credit record. No garnishment. They can, however, place a lien so that if your friends own real property, they cannot sell or transfer it without paying the judgment first. That is not automatic, however. It is an extra step the judgment holder would have to take.

I understand you are trying to do the snowball method, but you might want to go ahead and formulate an offer for this creditor that includes manageable payments. Be prepared with a total amount (I suggest starting with 40 cents on the principal dollar with a goal of paying no more than 60 cents on the principal dollar) and a length of time/amount per month that they can offer. Keep in mind they probably bought this account for substantially less than the amount due, so they can still make money by accepting less than face value. (Of course, if this is just another subsidiary of the original creditor that is calling itself a collection agency, the economics may be different for them.)

If you get an agreement make them put it in writing before any payment exchanges hands. Good luck!!