Civil Collection Question

I live in New Mexico and to make a long story short I defaulted on a credit card about 2 years ago. They closed the account and it currently shows it as a charge off. I was recently sued for the full amount. I am a student at UNM and don't currently work. I am wondering if I don't even show up, (they will get an automatic judgement) what can they take? I don't have an income, and live off student loans. I don't own my home, and only have 1 vehicle. I will probably file bankruptcy this summer to clear it off but in the mean time what can they take (cars, personal property, checking accounts, etc.). Thanks

NMCOBRA said:

I live in New Mexico and to make a long story short I defaulted on a credit card about 2 years ago. They closed the account and it currently shows it as a charge off. I was recently sued for the full amount. I am a student at UNM and don't currently work. I am wondering if I don't even show up, (they will get an automatic judgement) what can they take? I don't have an income, and live off student loans. I don't own my home, and only have 1 vehicle. I will probably file bankruptcy this summer to clear it off but in the mean time what can they take (cars, personal property, checking accounts, etc.). Thanks

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My response:

Well, basically what you're saying is that you're "judgment proof". That may be true to some extent - - today. But, let's consider that judgment for the moment, and the fact that you're going to college because you believe, at some point in your life, you'll be getting a good job or profession as a result of that "sheepskin".

While today you may be judgment proof, that's not necessarily the end of the story. You see, a judgment in New Mexico is good for 20 years (that's right, I said 20 years) and that judgment carries interest at the contract rate.

So, you figure out the math. Such a judgment, while not collectible today, will be collectible when you have that good job, that fat bank account, that new home, those stocks and bonds, that fancy new car, etc., etc.

A lot can happen in those 20 years, and it's a sure bet that within those 20 years, you'll be "fat and juicy" - - just ripe for the pickin', and just when you least expect it.

When you consider the principle amount, the accrued interest, the costs of collection, the attorney's fees, which will make up the corpus of your total judgment, you can easily and readily see just what kind of monkey on your back this can be for up to the next 20 years of your life.

Hell, I'd buy the debt and wait. It's better than money in the bank !

So, do the right thing and pay the debt before it goes spiraling out of control.

IAAL

First, thanks for the help. Here is my thinking, that although flawed, might be the only solution. It will be at least 4-5 years before I make a penny. If I can hold out until the summer I can file bankruptcy, which will look horrible for the first few years but I think I can re-establish a fairly good credit rating in 4-5 years. The second point is they want the entire amount up front (about 11K) and I couldn't even touch that. I have no argument if I went to court, I owe it. If they got a judgement (without me even showing up) what can they take from me. Do they have the right to come in and take my furniture, etc. Can they take my car (that is paid off). Can they take the money out of my checking account? I just need to buy enough time until I can file, so can I hire an attorney to delay their action. They simply stuck a filing to my door that needed to be replied to within 30 days. Thanks again!!

Michael

First, I want to congratulate IAAL on such an eloquent reply. Though, if everyone paid their debts and creditors didn't get judgments, I would have to get a legitimate job.

Now, since you seem so intent on being a 'dead-beat', I just want to understand your basis:
1) You, in a desire to get the 'better things' in life, applied for a credit card.
2) In that application process, you agreed (PROMISED!) that, in return for borrowing someone else's money (doesn't matter if it is MasterCard or your parents), you would repay that money plus an agreed interest. And your repayment would be in accordance with an agreed schedule.
3) Now that you have obtained the things that you wanted, you have decided to 'stiff' the lender.

I believe that if someone did that to you, after loaning them money, you would probably be pretty upset and call them all kinds of things, like; scum-bag, low-life, sleazy, liar, cheater, etc.
Also, I think you would make every effort to get your money back, including taking that scum-bag to court.
However, that low-life scum-bag decides to cry and whine and file for bankruptcy, figuring "Hey, ain't such a bad deal, and ain't life grand that I can do this bankruptcy thing?".

So, here is what will happen to you. You will get a major 'hicky' (bankruptcy) on your credit history. That lasts 10 years. You will also get a 'hit' on your credit history for the bad debt. And you might even get a 'hit' for the judgment. That will mean that ANYONE (lender, potential employer, insurance, even girlfriend) that can get your credit report will see what you are. Additionally, I figure that with all that, your credit rating might be in the mid-500's, this will probably raise your interest rate one or two points from any lender FOR THE NEXT SEVEN TO TEN YEARS. That in alone might even cost you more than any negotiated settlement.

So, yea, just go ahead, make my day!