They have a judgment against me…what can I do now?
I just read a similiar blog post at Fix My Credit Report Freez where the debtor states:
“What options do I have once a collection has gone to court? The attorney representing the credit card company did not provide me with any information to verify that the debt is mine or how it was calculated. They say I’ve defaulted and am ordered to pay. Can I use a revised version of the debt validation letter to make them put up or shut up? What about attorney’s fees? Can they add them to my judgment?”
The answer: The debtor’s rights at this point are quite limited. With the judgment in place, the attorney can garnish the debtor’s wages, haul the debtor into court for a creditor’s examination to review the debtor’s assets and even do a Writ of Execution which is where the debtor gets the court officer to take the debtor’s assets. So now question becomes, what can the the debtor do to protect himself after a judgment has been entered. Remember, if the debt is a consumer debt, then the Fair Debt Collection Practices Act will always apply to the debt and govern the actions of the collectors, including the attorneys. Take heart, I have some ideas:
1. Be proactive and take the bull by the proverbial horns. Call the attorney and talk to her. Tell her that you want to pay the debt and are willing to do so. Just ask for an installment payment plan. As a collection attorney, I always admire debtors that recognize that they owe the debt and are willing to pay it. It shows a good attitude. It makes me want to “partner” with them to resolve their debt issue together. On the other hand, when I get a debtor who calls me with the tough guy attitude, I realize that cooperation will be next to impossible and simply go forward with all of the debt collection techniques that I can use. Being proactive and amiable is the number one method you can use to resolve a debt.
2. Motion to Installment payments. In Michigan, a debtor can file a Motion for Installment payments. Before you get too excited about this motion, please note that even if the court grants the debtor’s motion to pay the judgment in installment payments, the order only protects wages. It does NOT stop a creditor from getting a Writ of Execution which means that a court officer can still come by your house and seize your car, your wallet, your jewelry, etc. How do you avoid a visit from the court officer? See #1, above.
3. Bankruptcy – This used to always be an option. While you have a Constitutional right to file for bankruptcy, the standards have recently been increased so that many debtors that would have otherwise had this right, may no longer qualify. If you think that this may be an option, in Michigan, I recommend Mark Shapiro and Stuart Gold. These gentlemen are not only my adversaries between 9 am. to 5 pm, but they are my friends outside of these hours. Mssrs. Shapiro and Gold are both not only bankruptcy attorneys, but they are assistant United States Trustees in the bankruptcy court. Since I am writing this blog post at 7:50 a.m. on a Sunday morning, right now, they are my friends. 🙂
4. Aggressive Asset Planning with an attorney – If you have substantial assets that you need to protect, you should consider hiring an attorney to discuss methods of protecting those assets. Some common methods include off shore bank accounts, trusts and re-titling assets to the names of yourself and your spouse. Sometimes, no amount of asset planning will stop an aggressive and seasoned collection attorney. But sometimes, it does.