Why settle a debt with Weltman, Weinberg, and Reis for an old debt bought from an original creditor? Of course, no-one wants to pay a debt collector. But, never-the-less, you have to consider the practical aspects of what to do next. For most collections, you essentially have three choices as follows:
- Sue them back in state court.
- Settle with them.
- File bankruptcy.
A practical and reasonable solution is normally best. If you settle then you have to pay the settlement which you may not be able to afford. If the debt is not yet reduced to a judgment then, you can offer a 50% to 70% settlement of the debt. However, after a creditor obtains judgment settlement becomes harder.
Why Settle a Debt with Weltman, Weinberg, and Reis?
Sometimes the payment must be made within 30-days or it might be spread out over a longer period of time. In order to reach the settlement, they may ask for an agreed judgment.
Then, if you don’t pay the debt on time, the agreed judgment enters and they garnish wages, bank accounts, or file a judgment lien against your home or any real property you own. In an extreme case, I saw furniture taken from a home and sold to pay the debt in Kentucky.
⎆ Learning About Debt Settlement
Debt collection law firms will take payments over time but if you pay any settlement over time then the collector will demand a higher percentage than an immediate payment.
First, never agree to a settlement offer you can’t afford. Next, if you fail to make the payments on time, the collector will not bargain with you. Instead, they will immediately execute the agreed judgment.
Debtor collectors love these agreed judgments because, after you sign, they win their case. After that, your only remaining choices are to do one of the following actions:
- File bankruptcy.
- Pay the debt.
- Ignore the debt and have them execute on the judgment garnishing wages bank account and selling your property.
⎆ Settling the Debt as an Agreed Judgment
Getting you to sign the agreed judgment is a popular tactic with debt collection law firms because they no longer have to litigate in state court whether you owe the debt or what the amount is. They don’t have to prove you owe the debt. Paying the debt, however, means that you may encourage other debt collectors to file lawsuits against you. If you have other lawsuits and you pay this one then the others may start-up collections again. When you have a lot of debt you might end up filing bankruptcy anyway.
If you can’t afford payment you may have to file bankruptcy or litigate in state court. Bankruptcy may or may not be an option. You have to do a short cost-benefit analysis. What do you really get out of filing bankruptcy or defending a lawsuit? Defending mortgage delays the foreclosure. That may be important since you get a few months of free rent.
But there are times when you only want to get on with life. Then, you might think that paying the debt in a negotiated settlement is the best option. An attorney might charge $500 dollars for negotiating a settlement. But, that’s only if settlement causes the least damage to your credit. In some cases, it might be better than Chapter 7 or Chapter 13.
For instance, if you’re being sued for a $3,000 credit card debt, it costs you more to litigate than to settle. In this instance, the damage to your credit from a judgment or bankruptcy costs you more than the debt. Still, I believe you need to understand the risks of an agreed judgment.
⎆ Weltman, Weinberg, and Reis
Do not attempt to settle with Weltman Weinberg and Reis on your own. These are competent attorneys that represent the banks, not you. Every phone call is recorded. Every letter is made a part of the record. The most common mistake a debtor makes is to admit they owe the debt. Any statement you make to them will be used against you as an admission.
Your statements or admissions can toll the statute of limitations making the debt permanently collectible. Or at least collectible for another 15 years under Kentucky law.
Conversely, any statement your attorney makes is in settlement and cannot be used against you.
Again, you must remember that any debt collector works for the creditor on a commission basis. Therefore, he is not your buddy so, do not rely on him for legal advice. He works for the bank and he will not tell you about the defenses you have to any lawsuit. Instead, he will only ask you for payments. These payments will normally be applied to late fees and charges first because he makes his highest fees from collecting the late fees.
So, be certain to work with an attorney to discuss your options and defenses. If you need help settling or defending a debt collection lawsuit, stopping harassing debt collectors, or suing a debt collector, contact us today to see what we can do for you.
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Contact us to see what defenses you have or to negotiate with the debt collector. Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905.