Can a Default Judgment be settled?

[gabriellej]

We received a default judgment in 1998 for a medical bill. We cooperated with the attorney by making agreed monthly payments. For no reason we were called in for interrogatories. We reviewed our current medical bills we owe without reviewing any of the requested docs he asked for. He said he would settle for the principle amount and requested we submit a letter outlining our circumstances, we complied. 6 months later after making our final payment we received a letter from the Doctor stating our account was paid in full with a $0 balance. We assumed it was resolved. 8 months after the receiving the Doctors' letter the attorney sent a demand for payment letter on the interest which has far exceeded the principle amount and attorney fees over $500.00. My question is two fold; Can they reverse their agreement with us, even though their actions implied it was in place and is it legal to charge two different interest rates (mine was 9% and my husbands 8% combined with 18% up until the judgment was placed)?

 

[JETX]

I have re-read your post three times trying to see if I can offer any advice, and regretfully, I still can't figure out what your situation is.

1) You say, "We received a default judgment in 1998 for a medical bill.". Yet, the balance of the message says that you are paying (or have paid) this judgment. If correct, you didn't 'receive' this judgment (being the plaintiff), but LOST the case and a default judgment was rendered AGAINST you. Which is correct?

2) You further say, "We cooperated with the attorney by making agreed monthly payments. For no reason we were called
in for interrogatories." In reading this, I assume you negotiated a payment schedule with 'some' attorney (assumed the judgment creditor), but that he apparently called you in for a 'debtors exam'. Normally, if a payment plan is in place and being followed, the creditor wouldn't just arbitrarily incur the cost of a debtor exam. Why did they call for one??

3) You say, "We reviewed our current medical bills we owe without reviewing any of the requested docs he asked for."
How did you manage to avoid providing documents for a debtors exam?? They are normally requested by subpeona and it would be REQUIRED that you bring them.

4) You say, "He said he would settle for the principle amount and requested we submit a letter outlining our circumstances, we complied."
I thought you were already making payments. Why would he make an offer for the principle amount when you were already making payments??? Were you only making payments on the interest and a balloon payment on the principle??

5) Then, after all the talk about lawyers and exams and making payments, you immediately jump to, "6 months later after making our final payment we received a letter from the Doctor stating our account was paid in full with a $0 balance.". Making your final payment on what?? On the principal, the interest or both?? Why did you receive a letter from the doctor when all of your earlier conversations were with a lawyer (for the doctor?)??

6) You say, "8 months after the receiving the Doctors' letter the attorney sent a demand for payment letter on the interest which has far exceeded the principle amount and attorney fees over $500.00."
If you will read the judgment, you will see that it very probably includes the original debt, PLUS attorney fees, PLUS interest, PLUS costs. If you have only paid the original debt, you are still liable for the remaining costs of judgment.

7) Finally, you ask two questions, "Can they reverse their agreement with us, even though their actions implied it was in place and is it legal to charge two different interest rates (mine was 9% and my husbands 8% combined with 18% up until the judgment was placed)?"
It depends on the 'agreement' that you claim. If the agreement says that you will pay $X as payment in full, and they now demand more, generally, you will not be required to pay additional fees. It all depends on this 'agreement' you allege. Look at it and see what it says. As to the interest question, your post is again confusing. How can ONE debt have two separate interest rates? Was the judgment a consolidation of TWO separate medical bills, one at 9% and one at 8%? If so, then each bill should have been brought forward to the date of judgment, with its own pre-judgment interest, then a new post-judgment rate could be set by the judge as allowed by state law.

 

[gabriellej]

You sound as though you have many of the same questions we have. Yes, the default judgment was entered against us. We sent a letter stating we would pay a monthly amount and it was accepted by the attorney representing the doctor. You asked why were we were called in for the debt interview if we were making payments? Once again, we have no idea, but you have to respond, so we did. The docs were requested by subpeona, however he did not want to review them when we attented the debtor exam. We did ask him why he requested the exam and he stated it was because one payment was late a few months back, however, we provided him with a letter we sent his office in reference to his relocation and how we were never notified of his change of address until the mail was returned due to "forwarding time expired". We then discussed the large amount of medical bills we were currently paying for our son due to numerous surgeries and he agreed to settle the judgment on the remaining balance of principle due to our financial situation. The letter he requested was to outline our current debt and financial status. This letter would be submitted to the doctor requesting we only pay the principle amount, no interest or attorney fees.

Although we did not receive a written agreement back from the attorney we assumed it was in place because six months later when we paid the last payment on the principle, the doctor sent us a letter stating our balance was paid in full. Additionally, in the two years we dealt with this particular attorney he had never returned one phone call and 99% of my letters. We assumed his office was very disorganized.

8 months after making the final payment on the principle we received a demand for payment later stating we were 8 months behind in our payments. We went to the Doctors office to inquire and were told they would sign a release and would call us later in the day to retrieve it. However, they never called, instead we received a letter from the attorney stating we were not allowed to contact the doctor and we still owed interest and attorney fees. Our question, if this were true, why did the doctor send the letter indicating a zero balance and why did the attorney wait 8 months after the fact to contact us when in past dealing with him, we were called in to a Debt exam for one late payment, two months earlier?

In reference to the interest, your are correct, it is confusing. The contract charged 18% prior to a judgment and then two seperate interest rates for my husband and I until the paid in full. It was only one medical bill. Additionally my husband is not my daughters legal father, however, he was included, even though he never signed the contract and by law cannot sign anything in her interest. We tried to have the judgment put aside in reference to him, however, the judge said it had to stand since we did not appear at the original hearing (we appeared the following day due to our error). However to appeal you have to secure the entire amount of the judgment which we could not do due to our financial situation.

The stress from all of this has been awful. We feel as though he has all the power which by law I suppose is true. However, we have done everything he has requested but either is is very dishonest or disorganized, to the point of making our lives miserable.