summons received, advice needed

[ajani777]

What is the name of your state (only U.S. law)? Minnesota

Earlier today I was served a summons to respond within (20) days about a debt -- through a collection agency's attorneys. The amount requested is about $9,150. (Less than originally owed by about 10-15%)

I'll spare the sob-story details of why the debt has gone unpaid, but suffice it to say like the typical young idiot, I ignored the bills and phone calls and letters until an law enforcement official knocked on my door today.

I guess my question would be what is my next step here? To contact the attorney? To go to the court house and file a response that I intent to pay or deny the claims or need information?

I'm sure I could cut all kinds of corners I'd rather not cut (live off of bread and water, etc) to afford a 25% wage garnishment if that's what happens, but I'm hoping against hope that they might settle the debt for much less than is owed, although they have appeared to have offered an 85% settlement figure that I am seeing now after digging through my old unopened bill/junk mail.

I've seen responses on this site and others that since CAs typically pay pennies on the dollar for debt they could accept as low as 20% to 50% of the debt in a lump sum payment, OR that they are unlikely to accept anything lower than what they appeared to have already offered (Court/lawyer fees appear to have been rolled in.)

I'm thinking of trying to settle with a lump sum, but the most I feel I could even offer is $4,000 maybe $5000 after selling a vehicle and receiving a personal loan, and even that isn't in hand. I'd have to receive the funds and it would take most likely a week or two to make arrangements to have money in hand.

My main questions:

(1) Am I hurting myself by taking this proposal to the attorney? What if the attorney ignores me, like I've seen some people suggest has happened to them. Do I admit the debt?

(2) And finally, perhaps my most important question.. if I respond to the summons from the court admitting I owe the debt, is it any different than defaulting? Will I have a hearing of some sort to arrange payment or will they just default and start garnishing anyway?

Thank you very much for your time. Sorry for the lack of brevity, but I wanted to hit on most of the questions I had in the original post.

[ajani777]

I do have one follow up question. After researching the mn courts website, it would appear that I am not allowed to serve the attorney the answer personally, I must have another adult do so, and then file with the courts at the cost of $250. Which I can only hope I'm misunderstanding.

It does say on the summons portion of the S&C complaint that in accordance to rule 114, an alternative dispute resolution (ADR) is provided for in most cases.. and the attorney signing the document has listed on her linkedin profile a history of working for an ADR center.

If I contact this attorney and we are able to agree to a full lump sum payment resolution, does the summons cease to be pertinent and can it be ignored (with written agreement of no follow up action of course) or do you ALWAYS have to answer that summons if you do not want to be subject to the default judgment.

And is that $250 fee and alternative handling thing legit? That seems pretty steep for just a filing of papers.

[nrknlknek]

The creditor's attorney has no legal obligation to speak with you or to negotiate with you. He or she might depending on their instructions and authorizations from their client. But, that's a risky move since you acknowledge you owe the debt and have defaulted and are now a defendant in their lawsuit. My advice is to retain an attorney who will attempt to effect a settlement with the creditor in exchange for not having to go through a trial. This is your best and, in the long run, least expensive course of action for you. There is a time honored adage that he who represents himself has a fool for a client. Lawsuits are no place for the unitiated and collection attorneys are not typically rewarded for their compassion, so if you are anticipating a warm welcome from the creditor's attorney; you'll likely be dissapointed. Get your own lawyer for this one.

[debtcollector`]

Originally Posted by ajani777

I've seen responses on this site and others that since CAs typically pay pennies on the dollar for debt they could accept as low as 20% to 50% of the debt in a lump sum payment, OR that they are unlikely to accept anything lower than what they appeared to have already offered (Court/lawyer fees appear to have been rolled in.)

The people making those assertions are a bit off base. You still have an opportunity to settle, but it doesn't make much sense for them to take less than the amount owed now -- they have already filed and paid the fees. You are going to have to make them an offer that interests them. After all, they are going to get everything they asked for in 20 days - plus interest.

Originally Posted by ajani777

I'm thinking of trying to settle with a lump sum, but the most I feel I could even offer is $4,000 maybe $5000 after selling a vehicle and receiving a personal loan, and even that isn't in hand. I'd have to receive the funds and it would take most likely a week or two to make arrangements to have money in hand.

It ain't gonna happen. You might have a chance with $8,000 cash in hand.

DC

[ajani777]

Originally Posted by nrknlknek

The creditor's attorney has no legal obligation to speak with you or to negotiate with you. He or she might depending on their instructions and authorizations from their client. But, that's a risky move since you acknowledge you owe the debt and have defaulted and are now a defendant in their lawsuit. My advice is to retain an attorney who will attempt to effect a settlement with the creditor in exchange for not having to go through a trial. This is your best and, in the long run, least expensive course of action for you. There is a time honored adage that he who represents himself has a fool for a client. Lawsuits are no place for the unitiated and collection attorneys are not typically rewarded for their compassion, so if you are anticipating a warm welcome from the creditor's attorney; you'll likely be dissapointed. Get your own lawyer for this one.

Thank you both for the responses, I appreciate very much you taking the time with what must be the same type of questions you see all the time. I guess my main scare in going with an attorney is that I've heard it's not worth it. I'd have to assume that a Lawyer is going to charge quite a large fee, and if nothing else comes of it, then I'm looking at an even larger hole.

Probably another annoying question, so forgive me for asking, but does anyone reading this think I'm off base with that.. Would it be in my best interest to get a Lawyer to negotiate and am I looking at thousands of dollars of lawyer fees if I do? Because I don't see a lawyer getting me off the hook here. I owe the money, and through 3-4 years of garnishment, they can get it. I have no property of value outside of a car valued at 2-3K, but I have steady employment.

Thank you at least for both taking the time to respond, even if it isn't soothing my shattered nerves over this. (My own fault, I know.)

[nrknlknek]

Not knowing the true complexity of this particular situation, I would nevertheless suggest to you that a competent lawyer could probably settle the matter at a cost that is significantly lower that what you are apparantly thinking. Many credible lawyers will not charge you for an initial consultation during which they will lay out your alternatives and even give you an estimate of costs. When asked whether or not to engage an attorney, I often tell people that Dentists are also expensive, but they typically can furnish results that are a bit more healthy and comfortable than do it yourself dentistry!