He's in a lot of debt

[kackle]

What is the name of your state? NJ

My friend has a lot of debt, mostly in medical bills. Something like $40,000 worth in medical $20,000 in personal loans and fines as well. Right now he is unable to pay, but when he can start the payments will the debt still be that amount or is there interest added to the debt?

Jen

 

[kackle]

is there intersest on debt?

What's the worst that could happend to him?

Jen

 

[zippysgoddess]

Yes, they will add interest, as well as attorneys fees, collection fees, and court fees if they sue him, and get a judgment.

If they get a judgment, they can pursue any means allowed in your state to get their money, this could include levying of bank accounts, and putting a lien on personal assets.

 

[kackle]

Yes, they will add interest, as well as attorneys fees, collection fees, and court fees if they sue him, and get a judgment.

If they get a judgment, they can pursue any means allowed in your state to get their money, this could include levying of bank accounts, and putting a lien on personal assets.

If they do sue him they won't be able to pursue any personal assets of his, because he doesn't have anything. No house, no car or not even any bank accounts.

So with that in mind, what will he need to do?

Jen

 

[zippysgoddess]

Well they can garnish his wages if he is working, they can take 25% out that goes directly to them before he even gets his paycheck.

Judgments in New Jersey are good for 20 years, so not only will that make his credit report even worse, but it means they can sit and wait, and hope in the future he does have something they can take.

Otherwise, there isn't much he can do, if he has no money to pay them, they are going to get the judgment, he really has nothing to negotiate with.

He might want to consider bankruptcy, that might be his best option at this point.

 

[kackle]

Well they can garnish his wages if he is working, they can take 25% out that goes directly to them before he even gets his paycheck.

Judgments in New Jersey are good for 20 years, so not only will that make his credit report even worse, but it means they can sit and wait, and hope in the future he does have something they can take.

Otherwise, there isn't much he can do, if he has no money to pay them, they are going to get the judgment, he really has nothing to negotiate with.

He might want to consider bankruptcy, that might be his best option at this point.

How long does it take for a company to file a judgement?

These debts started within the last year. He recieved the bills and the statements that said that he needs to start paying them. I don't know if these bills went into collection yet.

What will bankruptcy do for him?

Jen

 

[Ladynred]

Bankrutpcy will WIPE OUT all his debts - that's what it will do for him.

How long it takes for any company to get to the point of suing him and pursuing a judgment depends on the company and the amount owed. Discover will sue his dog to get his bone regardless of what is owed, and Citibank is also very aggressive. MBNA will send him into binding arbitration, where he is guaranteed to lose, then they'll turn it into a judgment.

If he hasn't paid any of these bills in more than 6 months, then he's most definitely in collections, and all accounts have been charged-off as bad debts. If he's even 30 days late, he's in collections in one form or another.

 

[zippysgoddess]

Thank you for answering that for me Ladynred, my pain was through the roof again today, so I had to go lay down.

 

[kackle]

Bankrutpcy will WIPE OUT all his debts - that's what it will do for him.

How long it takes for any company to get to the point of suing him and pursuing a judgment depends on the company and the amount owed. Discover will sue his dog to get his bone regardless of what is owed, and Citibank is also very aggressive. MBNA will send him into binding arbitration, where he is guaranteed to lose, then they'll turn it into a judgment.

If he hasn't paid any of these bills in more than 6 months, then he's most definitely in collections, and all accounts have been charged-off as bad debts. If he's even 30 days late, he's in collections in one form or another.

Thanks for explaining this for me. I guess he's in a lot more trouble than I thought. It's over 6 months now and these bills needs his attendsion, they're hospital bills. Luckily all from the same hospital, unfortunailly his not working right now. Does it cost money to file a bankrutpcy? If so how much, roughly?

Jen

 

[kackle]

Thank you for answering that for me Ladynred, my pain was through the roof again today, so I had to go lay down.

Thanks too zippygoddess for answering my questions.

Jen

 

[Ladynred]

Yes, it costs money to file bankruptcy and under this new law you really don't want to file without one. Most will take payments, so he should go for a few free consultations. He will have to go thru mandatory credit counseling before he can file, but the lawyer will explain all of that.