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Thread: need advice, being sued for credit owed

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    Senior Member Neptune's Avatar
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    Default need advice, being sued for credit owed

    I got a certified letter from Capitol One's lawyers that
    states on top: You're being Sued!

    It says that I entered into an agreement and have defaulted in the payment.

    I have 35 days to respond to this!

    I am not working right now, and cannot afford to pay them anything. I wanted to consolidate my credit after i found work- but they are already suing me.
    I've defaulted for over a year.

    I plan to go to free legal aid, but does anyone know what happens in these credit lawsuits when a person cannot pay now?

    Does this mean i'll have to physically go to court?
    Any info would be helpful.


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    Default Re: need advice, being sued for credit owed

    It depends on what you plan to do - pay them something and they will go away ... for a while. Capital One Financial is the biggest "sub-prime" VISA card underwriter in the USA. They are being devastated by bankrupcies and delinquencies, and have turned their collection efforts up a notch. What they really want is money, not paying legal fees themselves to maybe get money by suing you. It's very likely that if you agree to pay them say 20-30% of what you owe them in cash, and agree to a repayment schedule for the rest, that they will drop the suit.

    If you can't pay them anything at all, and if you have any assets or possessions which are worth anything, then it's likely that they will drag you into court and sue you. If this is the case, and if you don't have a lot of assets to lose, you may want to talk to a public defender about filing bankruptcy yourself and beating them to the punch. Otherwise they could team up with other people whom you owe money to (example electric company, phone company, landlord) and force you into bankruptcy on their terms - putting themselves at the head of the "collection line" of course. Depending on which state you live in, your car is probably safe but other stuff is potentially open to a sherriff's auction.

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    Default Re: need advice, being sued for credit owed

    bankruptcy?

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    Pamela
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    Default Re: need advice, being sued for credit owed

    Ask them to settle for payments. Most companies really want the money, not you in jail doing anyone no good. ask to make monthy payments or bi-weekly. That usually will work. They only want the money, not you.
    Pamela

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    Default Re: need advice, being sued for credit owed

    bankruptcy?
    When creditors get tired of waiting for their money, and the person or company which owes them money refuses to pay them, one recourse open to the creditor is to force the person or company into bankruptcy. With certain legal restrictions which allow the person to keep their car and "tools" for example, a forced bankruptcy effectively puts every asset and possession of that person or company which is not specifically protected by law up for seizure and liquidation.

    After that, the creditors figure out how much money the person or company owed each of them, and how much money resulted from the seizure and liquidation, then a bankruptcy judge splits up the proceeds to the creditors on a percentage basis. Of course this may only wind up recovering 25 cents for every dollar the person or company owed, but some creditors figure that actually getting paid 1/4 or something of the debt the person or company owed within a couple of months is better than waiting for years to collect 100% of nothing.

    The difference between a 'voluntary' bankruptcy undertaken by the person or company, versus a 'forced' bankruptcy undertaken by creditors, is that with a 'voluntary' bankruptcy the person or company has some opportunity to transfer or spend their assets or sell/give away their possessions. With a 'forced' bankruptcy the sherriff can come in, freeze and seize all bank accounts, padlock or impound all possessions before the person or company even knows it.

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    Senior Member Neptune's Avatar
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    Default Re: need advice, being sued for credit owed

    Thank you Melonie and everyone for replying.

    I have already went thru a bankruptcy (chapter 11) about 6 years ago. I don't think its's quite 7 years yet. I do not own any assets except for a car and personal belongings. (no savings/checking/house- and the bills for my apartment are in my BF name)

    I know debters jail was abolished many moons ago so I know they are not going to haul me into the slammer.

    But- I've already gone bankrupt in the past so I cannot beat them to the punch this time around.

    i haven't gone for legal aid yet since I'm still organizing paperwork.

    I cannot pay *anything* at this time or make any agreements, and I don't own anything substantial.

    I resolved my previous bankruptcy without even having to go to court.

    What do you think legal aid will tell me to do??
    What's the next process after answering a summons complaint?

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    Featured Member susan's Avatar
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    Default Re: need advice, being sued for credit owed

    First, yes, they can sue you. They prolly WON'T, but they can. What they WILL do is send you nasty-grams every month and regularly scheduled phone calls (usually during meal times). However, beyond that, all they can really do is wreck your credit.

    If you CAN make any sort of payment and WANT to eventually get your credit restored, go to one of the LEGIT (and it's hard to sort out sometimes) credit repair firms. They will put you on a budget and require a payment from you every month. They will then contact ALL of your creditors for you and generally can get the amounts owed reduced, interest charges waived, and get Capital One plus everyone else you owe paid off in a while. The other choice is to tell Capital One (and anyone else you know) to screw off. However, you can kiss off buying anything on credit without paying exhorbitant interest for the next 7 years.

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    Banned Melonie's Avatar
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    Default Re: need advice, being sued for credit owed

    i haven't gone for legal aid yet since I'm still organizing paperwork.

    I cannot pay *anything* at this time or make any agreements, and I don't own anything substantial.

    I resolved my previous bankruptcy without even having to go to court.

    What do you think legal aid will tell me to do??
    What's the next process after answering a summons complaint?
    well I'm no expert so take this advice with the necessary grain of salt, but ... if this letter is from Capital One and not from an actual court I would advise you to do absolutely nothing! The first impression Capital One is trying to create is that you NEED to do something in 35 days - but Capital One set that time limit not a judge! I say sit tight. If you can't afford to pay them anything and if your credit is already trashed with a previous bankruptcy, Capital One will find out that they are in a "can't get blood out of a stone" situation. If they're smart they will realize that they will not even be able to recover their legal fees if they do proceed in forcing you into bankruptcy and selling off every non-protected possession you own, and simply continue to hit you with annoying letters and phone calls instead.

    If they're not smart they will probably sic an attorney on you. Again do nothing. By the time Capital One figures out that you're not going to voluntarily do anything to pay them the money you owe, that you have nothing additional to lose in regard to your credit rating, and that they will have to start a bankruptcy proceeding to collect, the seven year limit on your previous bankruptcy will most likely be up so that you can file again. Stall-stall-stall.

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    Default Re: need advice, being sued for credit owed

    Being an telecom guy, I went thru something like this myself with capital one. On a simple $300.00 Credit card, I defaulted for $900.00. They call me every two or three days. I answered the phone and repeat the same story (Unemplyeeed, all my stock was in telecom and now I'm broke)I finally got back on my feet, and when they called I ask to speak to the supervisor who I negotiated the debt to $450.00

    The key thing to remember is that they have jack up the amount owed, and have already written off the debt and sold it to the collection agency. who may or may not be affiliated to with Capital One.

    They will negotiate you debt to appx 150% of the Credit card limit.

    If you can't do this, just answer the phone every other week and repeat the same story, as long as they can track you and know you are not going "run out" on the debt they will not take you to court.

    Also when they call record the conversation, if they are rude, or in anyway treat you poorly on the phone, you can take them to court for unfair collection practices, and possible be awarded damages greater than you debt.

    Most of the collections are done by "Phone Monkeys" who always try and push the envelope on this, when they cross the line you have more than enough reason to sue, and file a complaint

    sorry this is just one of my rants, especially with capital one.


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    Default Re: need advice, being sued for credit owed

    My fiance owned a credit repair company for 8 years and we both experienced deliquent bills before. Here is his creed.

    I would not pay them a cent.
    I would move to another place if you can given your credit problems and NOT forward your mail or phone. Get a brand new phone number, unlisted.

    If the creditors you are behind with have been paid by check, close that account and open a new one at a different bank and with the new address and phone number.

    You have no income and are unreachable so all the creditor notices will be returned to sender.your wages cannot be attached since you have no job and if you dance that is unattahable income since no one knows where you work.

    we owed Capital One along with about 7-8 other bills and with no address or job on the books what are they going to do. This was 4 years ago. they never were or never will be paid yet we have good clean credit accounts besides theones we let go.

    When you get on your feet you can start over with a new credit file.

    NEVER PAY A DELINQUENT CREDITOR UNLESS YOU ARE ABLE TO NEGOTIATE A LUMP SUM SETTLEMENT IN WRITING AND HAVE THEM AGREE TO DELETE THE ACCOUNT FROM ALL 3 CREDIT REPORTS WHEN PAID.


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    Default Re: need advice, being sued for credit owed

    Is your credit all ready a mess? Are you concerned with fixing it right now?

    Unless you have serious real property assets I would not worry too much about bankruptcy.

    I've seen a letter from Capitol One that a ladyfriend received that started out that way.

    In the fine print a few sentances down it stated this is something you could hear in the future.

    They won't be the ones to send you that letter.

    First it will go to a collection agency and then to a lawyer that will send more letters. Eventually, after it has been sold from one collection agency to another with the letters getting worse and worse, offers to settle the dept for a fraction of that owed will come.

    First it will be 80%, then 60% and depending on the amount of the debt and your repayment ability (they look at your credit reports) you may get the opportunity to settle the debt, have it reported as paid in full clearing up that matter on record, for 20% or less.

    If they are calling ask for their fax number or address and fax or mail a letter asking that ll further communication be by mail only.

    It's a lot harder to drop off the radar completely.... changing phones or moving only postpones things a little.....

    Unless your into them for in excess of $10K and have something they might be able to turn back into cash a lawsuit is not coming your way
    I have a difficult time meeting ladies!

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    Default Re: need advice, being sued for credit owed

    how true is it that your credit is cleaned after 7 years? what's the deal with that?

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    Default Re: need advice, being sued for credit owed

    7 years can turn into 10 or 11. Here's how.

    Your Capital One VISA was charged off and reported as an R-9 on your bureaus in January 2001. They now have sent your debt to Arm and Hammer Collections in March 2001. Now that entry shows on your bureaus as a new entry.

    In January 2003 Ball and Chain Collections is assigned the account and they send out letters. So the same debt that was last reporteed by the original creditor on 1/01 which would be due to be deleted 10/07 (6 years and 9 months is the limit) now has been prolonged to 10/09.

    If you have a checking account that has been used to pay them in the past and they obtain a judgment (whether you show up to court or not makes no difference) they can levy your account so you need to close it. That is why I recommended that you move and forward none of your mail if you can find someone to rent to you with bad credit. Then open a new checking account provided you never had an account closed due to mismangement at your prior bank and just let the collection letters get returned to sender.

    We have all been where you are. You just have to know the ropes and become "unreachable" and "uncollectable" and since you dance, when you go back to work that income is not attachable since it is cash so then go on with your life. Buy "Life after Debt" by Bob Hammond and read it fully and when you are on your feet master the chapter on file segregation and you can start over with new credit without the old showing up. It works like a charm, but don't ever have money problems again.

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    Default Re: need advice, being sued for credit owed

    Bankruptcy, bankruptcy, bankruptcy and fast!!! You should go to court, while using the attorneys and people to clean up your credit is good, it's too late. You will have to go to court soon, if they win, they will put a lien on anything you own and future paychecks. If you do appear in court, tell the judge you are trying and he/she will almost always let you make affordable payments.


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    Senior Member Neptune's Avatar
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    Default Re: need advice, being sued for credit owed

    I already went bankrupt 6 years ago. I 'never' responded to the summons from the attorney at Capitol One with their lawsuit. I still not working and not on the books anywhere.

    What are the next steps the attorney takes if I never responded to the summons, I don't have any assets except a beat up car, and I don't have my name on the apartment lease, and my checking account has only $16??

    What happens if I get hired by a club? Will the club send in the I9 form right away and Capitol One will find out I am working? -or- Will they wait until I make 500 of their shift pay before I get reported?

    Will i have anything to worry about when I am hired?
    thanks

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    Default Re: need advice, being sued for credit owed

    Well, the bankruptcy 6 years ago may limit your options for another year. But your total lack of attachable assets works in your favor - as the old saying goes, the attorney's investigators will undoubtedly discover that "they can't get blood out of a stone".

    In regard to dancing again, that would depend on a bunch of factors including local legal requirements for dancer reporting/licensing, whether or not you are classified as an employee or as an independent contractor by the club you start working at, and whether in fact that club actually records your true identity and files tax and employment reporting documents. In general, I'd assume that if you are working as an independent contractor that the earliest the attorney would receive any official reports about your income would be January 2004.

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    Default Re: need advice, being sued for credit owed

    I already went bankrupt 6 years ago. I 'never' responded to the summons from the attorney at Capitol One with their lawsuit. I still not working and not on the books anywhere.
    Was it a summons from the court? or just a letter from an attorney? If it is a letter from an attorney and he is trying to make it look like a summons, file a complaint with the state supreme court or state bar, whichever takes care of disciplining lawyers. If it came from the clerk of courts, and you didn't answer, a default judgment can be filed against you.

    What are the next steps the attorney takes if I never responded to the summons, I don't have any assets except a beat up car, and I don't have my name on the apartment lease, and my checking account has only $16??
    He can take judgment against you. Then he can try to collect the judgment by issuing a set of questions to you about your assets. For example, an apartment that is leased is not an asset so it doesn't matter who's name is on the lease. Every state has certain exemptions that protect assets from judicial process. Check with a local lawyer about what these exemptions are.

    What happens if I get hired by a club? Will the club send in the I9 form right away and Capitol One will find out I am working? -or- Will they wait until I make 500 of their shift pay before I get reported?
    One of those questions I mentioned will ask if you are working and where. If you are working at a job that pays a wage, then a portion of those wages are subject to garnishment. Again, this varries by state and you need to ask a lawyer what the portion is. An employer cannot send an I9 to anyone unless it is subpoenaed. Because this is a subpoena in your case, Capitol One will have to send you a copy of it at the same time they send it to any employer. Some states allow creditors to seek attachment of bank accounts without notice to the debtor after a judgment has attached, but you've already said you have only $16 in your checking account. So no biggie.

    Will i have anything to worry about when I am hired?
    thanks
    That depends on the status of the collection effort. If they don't have a judgment, then you have nothing to worry about.

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    Senior Member Neptune's Avatar
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    Default Re: need advice, being sued for credit owed

    The summons I recieved was from the Superior Court, Law Division Special Civil Part.

    Here is the abridged version of what the first page writes:

    Summons: You Are Being Sued!
    If you want the court to hear your side of the case you must file a written answer with the court within 35 days or the court may rule against you.

    You are cautioned that if you do not answer the complaint, you may lose the case automatically, and the court may give the plaintiff what the plaintiff is asking for, plus interest and the court costs. If a judgement is entered against you, a Special Civil Part Officer may seize your money, wages or personal property to pay all or part of the judgement and the judgement is valid for 20 years. You may do one of the following:

    1) Answer the complaint within 35 days
    2) Resolve the dispute with the plaintiff
    3) Get a lawyer


    The following pages of the complaint is the attorney information and Docket which says:

    1)Plaintiff and defendant entered into an agreement
    2)Defendant has defaulted in that payment
    3)Due: $1,400

    Wherefore, plaintiff demands judgement against the defendant for amount plus interest to the date of judgement plus costs.


    Do I actually have a judgement against me yet? I never responded within the 35 days, and i have not received any other notices in mail yet. What happens next?

    What happens when I get hired in a club and my pay is like $15 for each shift? Do they find out right away that I am working for $15 a night? Will they garnish right away or do I have to first make $600 in total shift pay before they can take garnishment action?


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    Default Re: need advice, being sued for credit owed

    Believe me if all you owe is 1,400, they are not going to spend money suing or garnishing your wages,I know people who have owed over 5,000 and nothing ever happened besides bad credit and recieving lots of letters,my good friends husband owed like 3,000 they were in the process of buying a house, hercredit score was around 750 his around 400, she called them and said my husband has this debt and we are trying to buy a house and offered them 500, they said we cant except that and she was like well then Iam not giving you anything I have excellent credit and I want to do this to make his better, well they they took it and erassed it from his credit report,they are just going to keep sending you letters when you work a while and have some money offer them 500 to erase the debt,make sure they take it off your report,my fiance also owed 3000 to fleet and now they are sending him letters saying they will take 1600,they will not garnish your wages or force you into bankruptsy unless your a business or you owe like 50,000,dont worry,just make sure you call and try to settle the debt for something like 500 or 600 when you start makeing money.

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    Senior Member Neptune's Avatar
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    Default Re: need advice, being sued for credit owed

    I'm from Jersey so there is no dancer licensing. I do not know New Jersey's requirements on dancer reporting.

    I believe when there is shift pay, you are considered an employee. So when the club hires you as an employee and you get like $15 shift pay, will they wait until you make a certain amount of shift pay before the employment status will be revealed?



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    God/dess Zofia's Avatar
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    Default Re: need advice, being sued for credit owed

    The summons I recieved was from the Superior Court, Law Division Special Civil Part.

    Here is the abridged version of what the first page writes:

    Summons: You Are Being Sued!
    Yep, you've been sued. Here's a neat trick, copy the top part of the complaint where it says Capitol One vs you and beneth that write in "I deny everything. " and sign it. Then write in "I demand a trial by jury." Send that to the court and to the lawyer. All you want to do is delay things until you can take bankruptcy again anyway. This will make Capitol One's lawyer realize that you are wasting his time with delaying tactics that will cause him to lose money on the case.
    Do I actually have a judgement against me yet?
    Nope.

    I never responded within the 35 days, and i have not received any other notices in mail yet. What happens next?
    The attorney can apply for a default judgment.

    What happens when I get hired in a club and my pay is like $15 for each shift? Do they find out right away that I am working for $15 a night?
    They have to ask you questions, called interrogatories. (I'm learning all kinds of things auditing payroll.) Those interrogatories can only be issued by the court and generally they have to be issued after a judgment has been obtained.

    Will they garnish right away or do I have to first make $600 in total shift pay before they can take garnishment action?
    Generally they have to have a judgment to get a garnishment. Every state has a set exemption from garnishment. It varies from state to state. Check with a lawyer where you are. But the exemption is almost always larger than minimum wage.

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    Senior Member Neptune's Avatar
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    Default Re: need advice, being sued for credit owed

    I don't think I'll be able to declare bankruptcy again because if there is a judgement, it will be valid for 20 years.

    I also want to avoid actually appearing in court. Do you think I will have to actually appear in court ?

    What happens if I do not respond denying or disputing the charges?

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    Default Re: need advice, being sued for credit owed

    You can not deny or dispute the charges now its been to long and they have your signiture,do as I said call tell them the situation when indeed you have enough to pay and see if they will take like 600, my sister actually just got a thing in the male similar to yours about a car she had repoed 6 years ago, my mother called for her and told them she doesnt work and is on ssi, she had mental dissabilities and I guess everything is fine with it and she dances ,you need to quit worrying and get to work, if your worried about the club reporting the income ,if you fill out a w2 form they will, you can opt to have them not pay you , so you dont have to fill it out, or have them pay you bacause you should have enough money for a repay by the time the IRS receives the form anyways, of course unless you just dont want to repay.

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    Default Re: need advice, being sued for credit owed

    Do I actually have a judgement against me yet? I never responded within the 35 days, and i have not received any other notices in mail yet. What happens next?
    Not at this very moment, as Zofia points out, but the collection attorney has obviously applied for one. Since you did not respond within the 35 days, it's very probable that the court will grant one soon.

    What happens when I get hired in a club and my pay is like $15 for each shift? Do they find out right away that I am working for $15 a night? Will they garnish right away or do I have to first make $600 in total shift pay before they can take garnishment action?
    The only way a New Jersey resident can have their wages garnished is #1 they must be on someone's payroll as an employee, and so reported to the state, and #2 the amount of the employee paycheck must be over the NJ "poverty threshold" (which is a hell of a lot higher than $75 per week.

    If you start working in a club where you are actually considered an employee i.e. you receive a weekly paycheck with taxes withheld, and you work X nights a week between certain hours, then yes your paycheck will probably be garnished. However, if you're like 99% of other New Jersey dancers and are paid in cash by the club at the end of the night with no taxes withheld, then you are NOT an employee you are a private contractor. As a private contractor, you will not be "registered" as an employee in the state of New Jersey. You will also not have any set number of hours per week or any predictable income which could be used as a legal basis for justifying "pre-emptive" collection practices. There is no way that a collection attorney can attempt to attach any of your income, since your income is unpredictable and undocumented (at least in the short term). There is a slight chance that next January your club will issue a 1099 in your name reporting the money they paid you through 2003, and this is the earliest point where the collection attorney would have an official report that you actually have income to take back into court. In theory you could earn $100,000 between now and next January, and there is no way that the collection attorney would be automatically informed. Even if the collection attorney did discover that you have income, it is doubtful that there is any mechanism the court could rule on which would "intercept" the money you earn as a private contractor before you receive it (which is what the garnishee actually does, knowing that an employee will be receiving a paycheck for X dollars once a week from an employer, and requiring that employer to hold back the garnished money from that paycheck and send it directly to the collection agency instead).

    If you simply do nothing and a court grants the collection attorney a judgement, it would allow him to attempt to attach or freeze your assets - i.e. your bank accounts, retirement accounts etc. You have already stated that you don't own anything of value which can be attached and sold to repay the debt (hide your computer!). New Jersey has laws which prevent creditors from taking your car if it is necessary for you to get to work. You rent or lease, you don't own a home, so you have nothing to fear there.

    This is simply going to boil down to a case of "can't get blood from a stone" as long as you don't take a job anywhere that considers you to be an employee, as long as you pay your bills in cash or by money order and avoid using a bank checking account.

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    God/dess Zofia's Avatar
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    Default Re: need advice, being sued for credit owed

    I don't think I'll be able to declare bankruptcy again because if there is a judgement, it will be valid for 20 years.
    Bankruptcy wipes out judgments as well.

    I also want to avoid actually appearing in court. Do you think I will have to actually appear in court ?
    You might have to, if they get a judment and hold a garnishment hearing.

    What happens if I do not respond denying or disputing the charges?
    A default judment will issue. Then the bank can move towards collecting on that judgment.

    Michelle wrote
    You can not deny or dispute the charges now its been to long and they have your signiture...
    As long as a default judgement has not been issued, you can file an answer and deny the charges. That action requires the bank to prove everything in a court.


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