Possible Judgement

[kgwilli1]

What is the name of your state (only U.S. law)? California
My husband has a terminal illness and cannot work. We have one income now. I owe $8,000 on an unsecured debt which has now turned into $10,250 due to high interest payments. I want to pay the debt - I'm not trying to get out of it - I just need to make small payments until my husbands social security is approved.

The creditor would not work with me and I was served papers from a collections attorney. I contacted them to explain my situation and that I would like to make low payments that I can afford until my husbands social security is approved. They agreed to reduce the dept to $9k + $180 court costs if I made a $500 downpayment and then made monthly payments of $400. They said they were going to get the judgement against me regardless of the payment plan because it was too late for me to file an answer in court and they need to make it a secured debt. I cannot afford a $400 payment right now but agreed to the terms because I didn't want them to garnish my wages. They said they would put the terms in writing and mail them to me. They immediately took the $500 from my account.

I did not receive the letter so called them back two weeks later. I was then told that my total debt was $11,600! I told them that the only reason I agreed to the $400 per month was so that my debt could reduced to a manageable amount. They said they hadn't agreed to that and basically "too bad" for me. Because I cannot afford $400 per month right now, because they did not reduce the debt (it was even higher than the court papers I was served allowed), I told them to void the payment agreement.

I do not have bad credit and I want to pay this debt - but I cannot afford high payments on a balance that now $3.6k over my original debt amount. Here are my questions:

1. Can I file an answer now or is it really too late (it's now been over 30 days)?
2. They accepted $500 - do they now need to file new papers for a new amount? Is my $500 just gone or do they have to deduct it from the balance they say I owe? If so, when does it get deducted?
3. They collection Attorney changed names and the court papers still have the old name on them - do they need file an ammendment?
4. Is it too late (over 30 days since I've been served) to stop them from getting a default judgement?
5. If they do get a default judgement, can I apply for a payment plan through the court?
6. Can they garnish my wages if I am head of household? How (and at what point) do I dispute any wage garnishment?

I cannot afford an attorney right now - I'm just trying to keep my house so that my husband has some stability as he fights his disease.What is the name of your state (only U.S. law)?

 

[JoshDom1898]

Q. Can I file an answer now or is it really too late (it's now been over 30 days)?

A. It depends on where they are in the default proceedings. If they haven't filed a Motion for Default, yes you can, if they have, you will have to file a Motion for Leave to Answer (which is basically you asking the Court to let you Answer the Complaint - it does not mean you can - you're just asking if you can).

Q. They accepted $500 - do they now need to file new papers for a new amount? Is my $500 just gone or do they have to deduct it from the balance they say I owe? If so, when does it get deducted?

A. No, they do not need to file papers for a new amount. In their proposed form of judgment they must account for any payments you have made though.

Q. They collection Attorney changed names and the court papers still have the old name on them - do they need file an ammendment?

A. I assume you mean an amendment to the Complaint. No. Law firms that change their names typically only have to file a notice of change of name with the Court.

Q. Is it too late (over 30 days since I've been served) to stop them from getting a default judgement?

A. Again it depends exactly where they are in the default process. Check with the Court to see exactly what has been filed.

Q. If they do get a default judgement, can I apply for a payment plan through the court?

A. Not that I am aware of. Maybe someone else knows....unless you file Bankruptcy.

Q. Can they garnish my wages if I am head of household? How (and at what point) do I dispute any wage garnishment?

A. Once they get judgment they can start the garnishment process and also writs of general execution.

 

[kgwilli1]

Thank you. That helps a lot.

Another question - the collection attorney said even if it wasn't too late file an answer that I would be wasting my time. She says the court only cares if this debt is mine and that I've already admitted that. She says they don't care if I want to make payments or not. It will cost $300 to file an answer - which I would have to borrow.

Am I wasting my time and money? Should I just wait for them to start the garnishment process and dispute the payment amount?

 

[JoshDom1898]

The Court will look at the facts.

1. Did you enter the agreement? Yes, as you say you did.
2. Do you owe the money? Yes, you admit that you do.
3. Have you paid them the money you owe them? No, you admit that you do not.

I'd have to agree that I think the Court will grant judgment against you even if you answer based on your post, however, I do not know the specifics of how to dispute garnishment. I know there are exemptions, I would contact a local attorney who knows more about it. You can call your state bar for free (pro bono) attorneys that will help you.

 

[Rexlan]

The court will not order payments. They will enter the judgment in the full amount. Additionally, the judgment will incur interest for that date forward.

They are under no obligation to make an arrangement with you., They just want the money which you owe. They can and will garnish your wages and possibly any other assets. Google about the exemptions that will apply to your situation. They will probably be able to get 2-40% of you wages if not more. Any bank accounts or other assets.

This will soon be $20K so it needs prompt attention. It cost nothing more than a piece of paper and a stamp to file an answer ... certainly not $300. However, you will probably not accomplish anything under these facts. And again, the court will not discuss your situation or need for low payments. It will only hear the argument for the debt and rule accordingly.

 

[kgwilli1]

The Complaint they have filed against me states they are suing me to recover $10,212.58. It lists "Attorneys Fees" of $1,000 (Pursuant to court scheedule, or such other sum as court may determine) and interest at a rate of 0.000%. Please explain how my debt can legally get to $20,000 quickly?

Also, I looked up court fees last night and the County website states under "court fees": "Answer or other first paper filed by each party other than plaintiff (amount over $10,000 up to $25,000) (including unlawful detainer) - GC 70614(a) - $300"

 

[JoshDom1898]

judgment creditors are entitled to post judgment interest by AZ law at 10% I'm sure your state has something similar.

 

[kgwilli1]

You're right- I googled it and CA has a 10% per year interest limit. If they decide on the maximum interest of 10% per year though it would only $1,000 per year and would take several years to add up to $20,000. I do see how this would add up if they put a lein on my house and I did not pay it off in a reasonalbe amount of time. However, if there is any possibility that my judgement could become $20,000 quickly and they could attach my wages for that amount I would really like to learn how it's possible so I know what to expect.

Also, if there is a way to file an answer without paying the $300 court fee please let me know how - that would be such a relief. All the info I can find says it's $300.

Thanks to everyone for your responses - this is very helpful.

 

[JoshDom1898]

You can always try to ask the Court to waive the fee, doubt they'd do it, but it doesn't hurt to ask.

 

[Rexlan]

Quickly means in a few years. There will be debtor hearings and more attorney fees in addition to the the existing judgment, interest and fees. It is not a game so try to take care of it if at all possible.

Well Calif is a strange place so maybe they ding both parties for fees right off the bat ... that sure seems unreasonable. I would call the clerk and ask also.

 

[kgwilli1]

Thank you. You are right - CA is a strange place :0 This entire process is strange - I never imagined that a creditor would refuse work with someone under this circumstance. We are not deadbeats and want to do the right thing. The really bad part it is that they may force us into bankruptcy; all our creditors will end up getting nothing; and we'll lose our house. Their response to that was "you're just a number - it's your right to do what you want". A very heartless response, I thought - but she's right, we really are just a number.

Thanks again for all your help!