Can and do credit card companies sue?

[Mad_dog]

What is the name of your state?What is the name of your state? California

Pls help. We've owned our own business for 10 years +. Due to greater competition and the economy we put A LOT of bills on the charge cards using the advance cash checks and such ( last year). These were our personal credit cards, even tho the business was incorporated.

Now we've closed the business to a tune of a six figure loss, haven't taken a paycheck in 2 years and have already refinanced the house. We're behind on the minimum paymens because they are overwhelming.

If we don't pay back the credit cards, can they force a judgement by a lawsuit, and freeze my funds at the bank? If so - will I know about it ahead of time so I can get the money out?
I'm so upset I can't sleep at night and don't answer the phone anymore if I don't recognize the number. I've talked to a couple of credit attorneys, but get conflicting info depicting "worse case senario". Any advice would be greatly appreciated.

[pojo2]

Originally Posted by Mad_dog

If we don't pay back the credit cards, can they force a judgement by a lawsuit, and freeze my funds at the bank? If so - will I know about it ahead of time so I can get the money out?

Another Bankruptcy in progress. Better see a BK Atty VERY soon before the laws change!

[Ladynred]

Yes, they can and they DO sue. If you have large balances and assailable assets, the more likely you are to be sued. However, they don't sue before the debts are charged-off (6 months of non payment) and even then it may be months or more before they sue - unless you owe Discover, they're nasty and don't wait for much.

IF they sue you, you'll be served with a Summons and Complaint. You will have to answer, probably go to court. You could still negotiate a settlement. If they win a judgment, they can sieze your bank accounts and drain them dry. So, if they sue, that would be the time to get your funds out of the bank. They could garnish wages, place a lien on your home and also try to sieze any other non-exempt assets.

Oh.. and they don't FORCE anything, it must all go thru legal process and its all decided by a judge.

Bankruptcy may be an option if your debts are overwhelming and you're not going to be able to stay ahead of them. The BK laws change as of 10/17 making BK harder for everyone, so if you go that way, do it ASAP.

[Mad_dog]

California...Well at least it is comforting that I won't wake up some morning to find all of my bank accounts frozen. Thanks

As far as bankruptcy though...it's not a possibility because we'd have to file personal and business BK because we co-mingled funds. We didn't know how to keep correct /separate books - ignorance I suppose.

It's not that we don't want to pay the cc companies, but would like to negotiate the amounts down some. My friend said if we open up a bank account in another state, or even Canada our funds are more - "challenging" for the creditors to obtain.

What about a Nevada Corporation with a EIN number different from our social security numbers. Would that money be protected? Are any of those "debt negotiator" companies who help "decrease the debt by 60%" any good? I know that's different from "credit counseling" or "debt consolidation".

Like I say, I really want to pay this back, but I've heard you've got to let them think you have nothing, before they negotiate down the amount due.
Thanks again - I'm so confused and upset - I appreciate your input.

[Ladynred]

As far as bankruptcy though...it's not a possibility because we'd have to file personal and business BK because we co-mingled funds

Did a bankruptcy lawyer tell you that ??
Ch 13 may be a better option for you.

My friend said if we open up a bank account in another state, or even Canada our funds are more - "challenging" for the creditors to obtain.

It may keep them from finding the accounts on their own, but if they sue and win a judgment, they can haul you into court for a debtor's exam and that will mean you are REQUIRED to GIVE them all your financial information, to refuse gets you charged with contempt of court. So it may work for a short time, but there's no guarantee the money would stay out of reach.

Are any of those "debt negotiator" companies who help "decrease the debt by 60%" any good?

Unfortunately, most of them are scams and they will put you in worse financial shape than you are now. These 'negotiators' work mostly by telling you to stop paying ALL your bills. Then you pay them money monthly, which goes into an account - along with their fees for their 'service'. If your accounts aren't already charged-off and in collections, they WILL be by the time you've paid the 'negotiators' enough money to make that 60% settlement. Now your credit is in the toilet, and you're paying them to wreck it further. In the meantime, they cannot protect you from lawsuits by those same creditors.

There really is nothing a 'negotiator' can do that you can't do yourself for far, far less money. Not all creditors are going to negotiate below 60%, some won't take less than 80%.

[Debt Guy]

I disagree slightly with LIR -- there are some reputable settlement companies. Yes, there are many as she describes that exist only to seperate you from your money.

I had a business fail and I used a settlement company. And I was happy and I received honest and good service. I believe that they saved me more money than their fee.

I have learned a great deal since then as I have seen so many people get entangled with a bad settlement company. I think I was fortunate to avoid that trap. The company I used was recommended by my attorney who personally knew the owner.

If you can do it yourself, great. I again respectfully disagree with LIR that not everyone is cut out to do it themselves. I think I could today but I could not have done it then.

If you decide to use a settlement professional, I have some advice:

1. Never ever never pay anything in advance. Most of these guys want thousands of dollars in enrollment fees and it comes up front. Once you pay that money, what is to keep them interested in you? Not much. If you cancel, then they keep all the money you paid and they did nothing to earn it.

2. Read the agreement carefully. Never accept any clause that pre-approves the acceptance of any settlement without your express consent.

Lots of these guys are slick and soothing words fall from their tongue. If it sounds too good or too easy, back away. It is not easy. A good settlement professional can make it less painful but no one can make it easy.

[Mad_dog]

California - Many thanks to you all. We've got lots to think about. I'm sure I'll have more questions later. You've been a great help!