Go to court?

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

I have a court appointment in October for an outstanding consumer debt. My main question is will going to court raise my debt amount significantly? I am wondering if I should try to work out a payment plan instead of going to court. Also is a stipulated judgement the only type of payment plan an attorney would agree to. The debt amount is approximately $14,000.

My other question is that I have liens from the IRS. Do these liens prevent other people suing me from freezing my bank accounts or siezing anything?

My situation is a bit complex, but I am trying to keep the questions simple. It is our plan to fulfill our obligations to the best of our ability without declaring bankruptcy and I am trying to figure out the best strategy.

Thanks for any help!

[JETX]

Originally Posted by jeff500

I have a court appointment in October for an outstanding consumer debt. My main question is will going to court raise my debt amount significantly? I am wondering if I should try to work out a payment plan instead of going to court. Also is a stipulated judgement the only type of payment plan an attorney would agree to. The debt amount is approximately $14,000.

Depends on what you mean by 'significantly'. If this goes to court, you will likely face larger legal fees than an agreed judgment (without the court time).

My other question is that I have liens from the IRS. Do these liens prevent other people suing me from freezing my bank accounts or siezing anything?

Nope.

Your IRS situation makes it much more likely that your creditor will agree to a delay in the court date. As it is, any payment made to the creditor before settlement of the IRS problem means that the IRS can sieze your payments to the creditor to satisfy their (superior) claim.

Suggestions:

TALK to the creditor and explain the IRS has liens against you. If they don't believe you, tell them to run a credit report and all will be revealed. This alone should get them to back off.

If they don't want to delay the court appearance, don't worry. IRS liens and other creditor judgments can be discharged in bankruptcy; given that liens and judgments exist on your credit profile, a bankruptcy will actually be improving your credit score! (And if you have a house, Chapter 13 may be preferable to Chapter 7)

Using the Courts to enforce collections serves to intimidate debtors. Remember: they can't hurt you more than you have been already.

Finally, do not take my word alone for all of this -- talk to an attorney in your state.

[JETX]

Originally Posted by PHSTARK

Your IRS situation makes it much more likely that your creditor will agree to a delay in the court date. As it is, any payment made to the creditor before settlement of the IRS problem means that the IRS can sieze your payments to the creditor to satisfy their (superior) claim.

And of course, that is NOT true. The IRS has no standing to declare 'preferential treatment' and make any demands on the creditor to return the money you pay to them.

TALK to the creditor and explain the IRS has liens against you. If they don't believe you, tell them to run a credit report and all will be revealed. This alone should get them to back off.

And of course, that isn't true either. There are lots of IRS liens recorded that never make it onto a debtors credit profile. Some county offices report them to the CRA, some locations have 'stringers' who review county records for lien notices etc. and report them to CRA's, and some locations have neither and leave it up to the creditor to locate their debtor's liens.

All your advice has been very helpful. The person suing me was not open to extending the court date.

I do have one question however, when I asked about a possible payment plan I was surprised about all the added interest which actually added about $4000 to the balance. Is this added interest ever negotiable? Or if I go to court is there any likelihood if I was interested in a payment plan the judge would lower or remove the interest?

Thanks for all your help,
Jeff