Getting sued by a creditor...how to negotiate it?

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danstelter
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Getting sued by a creditor...how to negotiate it?

Post by danstelter » Thu Mar 05, 2020 9:17 pm

I am in an ungodly messy financial situation. The immediate pain is a creditor is suing me for $2800 on a $3200 credit card debt I never paid.  I was going to file bankruptcy then when married, but my ex-wife kept piling up medical debt and the bankruptcy lawyer told me to not pay the credit card. However, we ended up not filing because my ex-wife kept going to the ER and I could not pay the medical bills. The credit card debt is legit. I offered $1000. They countered with asking for $1000 down and $100 per month for 18 months. I told them I can't do that. Court is Monday 03/09/20. 

The back story to my finacial situation: Lost a business about 4 years ago. Rebuilding a new one and getting on my feet. Divorced 6 months ago. Ex-wife piled up about $60,000 in medical debt,  which I agreed to take on in our divorce settlement. We live in Wisconsin, a community property state, so I'm not chased for it yet. But, she's a low-income earner, and eventually creditors will come my way because she'll never have much money. 

Also have student loans and a mortgage. Not paying on the student loans, but may be able to soon. 

So...how can I negotiate back with that creditor? Do I need to go to court, show them evidence of all of this, and ask for a break? What do you do? 

Appreciate your help, 

Dan 

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whodidntante
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Re: Getting sued by a creditor...how to negotiate it?

Post by whodidntante » Thu Mar 05, 2020 9:20 pm


Jags4186
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Re: Getting sued by a creditor...how to negotiate it?

Post by Jags4186 » Thu Mar 05, 2020 10:25 pm

If court is on Monday it’s unlikely you can do anything about it. You’ll get a judgment against you and if the credit card company finds out where you bank they can levy on your bank accounts. With a judgment they can garnish your wages. I don’t see why they would negotiate.

At minimum if the credit card is at the same bank where you have your checking and/or savings I would empty those accounts tomorrow and open a new bank account elsewhere and deposit the funds.

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Watty
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Re: Getting sued by a creditor...how to negotiate it?

Post by Watty » Thu Mar 05, 2020 10:32 pm

danstelter wrote:
Thu Mar 05, 2020 9:17 pm
Do I need to go to court, show them evidence of all of this, and ask for a break? What do you do?
I would go to court, there is a chance that they will not show up.

One thing to check on is just how old the debt can be and still be collectable. This will vary by state and a lot of details.

I don't know what to do about the rest of the situation.

TIAX
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Re: Getting sued by a creditor...how to negotiate it?

Post by TIAX » Thu Mar 05, 2020 10:38 pm

Start looking for an attorney and tell the court you're trying to get an attorney. You'll probably get an adjournment. Look into law school clinics or other pro bono attorneys.

DIFAR31
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Re: Getting sued by a creditor...how to negotiate it?

Post by DIFAR31 » Thu Mar 05, 2020 10:53 pm

TIAX wrote:
Thu Mar 05, 2020 10:38 pm
Start looking for an attorney and tell the court you're trying to get an attorney. You'll probably get an adjournment. Look into law school clinics or other pro bono attorneys.
An attorney for what? There is no dispute that it's a valid debt. The debtor has been offered a $400 discount on an original debt of $3,200. They're cutting him a break. If/when there's a judgment against him he could be on the hook for interest and costs as well (depending on state law; I'm not familiar with Wisconsin). Go to court on Monday and look for whoever is representing the other side. Try to work out a deal before the case is called. This is small potatoes for the creditor. They are probably looking to clear this up just as quickly and with as little pain as the OP is, because they want to spend their time and efforts on bigger things.

TIAX
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Re: Getting sued by a creditor...how to negotiate it?

Post by TIAX » Fri Mar 06, 2020 12:35 am

DIFAR31 wrote:
Thu Mar 05, 2020 10:53 pm
TIAX wrote:
Thu Mar 05, 2020 10:38 pm
Start looking for an attorney and tell the court you're trying to get an attorney. You'll probably get an adjournment. Look into law school clinics or other pro bono attorneys.
An attorney for what? There is no dispute that it's a valid debt. The debtor has been offered a $400 discount on an original debt of $3,200. They're cutting him a break. If/when there's a judgment against him he could be on the hook for interest and costs as well (depending on state law; I'm not familiar with Wisconsin). Go to court on Monday and look for whoever is representing the other side. Try to work out a deal before the case is called. This is small potatoes for the creditor. They are probably looking to clear this up just as quickly and with as little pain as the OP is, because they want to spend their time and efforts on bigger things.
I'm afraid this isn't the right way to approach litigation. One can have all kinds of defenses such as statute of limitations, lack of proper service, accord and satisfaction, etc. Just because something is a "valid debt," whatever that means, doesn't mean the debtor loses.

plog
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Re: Getting sued by a creditor...how to negotiate it?

Post by plog » Fri Mar 06, 2020 2:54 am

Try to work out a deal before the case is called. This is small potatoes for the creditor. They are probably looking to clear this up just as quickly and with as little pain as the OP is, because they want to spend their time and efforts on bigger things
Yes this is the right way to handle it. They've signaled they are open to negotiations, now your haggling over terms.

You don't want payments, you want to be rid of this with one lump sum payment. Tell them your sob story, tell them your finances and tell them you can write a check to clear this up (but not for what they're asking). Hit the bankruptcy idea hard, say you don't want to but it's looking bad (this is really your main leverage).

Then get the deal in writing---this lump sum by this date clears it all.

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Re: Getting sued by a creditor...how to negotiate it?

Post by fru-gal » Fri Mar 06, 2020 4:29 am

I'm very confused about this whole situation. Why has bankruptcy not been filed?

ARoseByAnyOtherName
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Re: Getting sued by a creditor...how to negotiate it?

Post by ARoseByAnyOtherName » Fri Mar 06, 2020 5:17 am

fru-gal wrote:
Fri Mar 06, 2020 4:29 am
I'm very confused about this whole situation. Why has bankruptcy not been filed?
Agreed, the situation certainly sounds messy but I’m not seeing a logical chain of events here.

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Tamarind
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Re: Getting sued by a creditor...how to negotiate it?

Post by Tamarind » Fri Mar 06, 2020 7:27 am

Get a lawyer. Even if you don't have a lawyer on Monday, show up for court.

Sounds like you are in serious need of a bankruptcy lawyer. A quick Google suggests that if you do have reasonable income and are just underwater due to pay mistakes, you might might might be able to discharge the medical debt you picked up in your divorce via a Chapter 13 bankruptcy. But don't listen to me, I just googled it. Go get a lawyer, and pay your lawyer first.

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Re: Getting sued by a creditor...how to negotiate it?

Post by HomeStretch » Fri Mar 06, 2020 7:38 am

+1 on consulting an attorney.

This lawsuit seems to be only a small part of a larger issue. Evaluate your overall financial picture. Compile a list of assets (including any equity in your home) and a list of liabilities. If your assets and net income are not enough to cover your debt/payments plus support reasonable modest living expenses, it may be time to consider bankruptcy.

Best of luck.

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F150HD
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Re: Getting sued by a creditor...how to negotiate it?

Post by F150HD » Fri Mar 06, 2020 7:51 am

take out a HELOC, settle for the $2800 and pay it off. Then slowly pay off the HELOC.

Time to look at a 2nd job solely for paying off the debt before the situation gets worse.

n00b
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Re: Getting sued by a creditor...how to negotiate it?

Post by n00b » Fri Mar 06, 2020 8:25 am

Pay your debts.

PS. We are effectively your creditors.

Jags4186
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Re: Getting sued by a creditor...how to negotiate it?

Post by Jags4186 » Fri Mar 06, 2020 8:40 am

F150HD wrote:
Fri Mar 06, 2020 7:51 am
take out a HELOC, settle for the $2800 and pay it off. Then slowly pay off the HELOC.

Time to look at a 2nd job solely for paying off the debt before the situation gets worse.
Based on OPs description, why would you think he would be able to go out and get approved for a HELOC?

We'd need to determine if the OP has money or not. Since he has student loan debt that he isn't paying on there is a good chance that is going to be a huge #.

In the grand scheme of things, $3200 is not this guys problem. Again, based on OPs description, he is headed straight for bankruptcy. I would not throw good money after bad. No reason to pay an attorney to fight over a $3200 potential judgment when it will get discharged in a chapter 7 or greatly reduced in a chapter 13. Of course, if OP does want to negotiate, one tactic could be that the OP calls up the credit card company attorney and let him know he has all these other debts (medical, mortgage, student loans), the amounts, and that he has $1000 that he is willing to give them today to make them go away. Otherwise expect to be at the very bottom of the list of creditors in his bankruptcy.

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8foot7
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Re: Getting sued by a creditor...how to negotiate it?

Post by 8foot7 » Fri Mar 06, 2020 8:45 am

A comprehensive analysis is called for but you probably don’t have time. If you truly have 60k in debt that you know they legally can come after you for, and you have no assets, then your best of a bunch of bad options is to file for bankruptcy today, which will immediately stay the pending suit against you.

Another option is to visit a bankruptcy attorney today and while you are sitting in the parking lot, call the opposing lawyer and tell him where you are and you’re filing today or Monday and would he like $1200 now to be done with it or be caught up in the mess?

As far as Monday; have you filed an answer?

You say you have a mortgage. For how much and what is the value of your home?

What did you make last year?

DIFAR31
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Re: Getting sued by a creditor...how to negotiate it?

Post by DIFAR31 » Fri Mar 06, 2020 10:51 am

TIAX wrote:
Fri Mar 06, 2020 12:35 am
DIFAR31 wrote:
Thu Mar 05, 2020 10:53 pm
TIAX wrote:
Thu Mar 05, 2020 10:38 pm
Start looking for an attorney and tell the court you're trying to get an attorney. You'll probably get an adjournment. Look into law school clinics or other pro bono attorneys.
An attorney for what? There is no dispute that it's a valid debt. The debtor has been offered a $400 discount on an original debt of $3,200. They're cutting him a break. If/when there's a judgment against him he could be on the hook for interest and costs as well (depending on state law; I'm not familiar with Wisconsin). Go to court on Monday and look for whoever is representing the other side. Try to work out a deal before the case is called. This is small potatoes for the creditor. They are probably looking to clear this up just as quickly and with as little pain as the OP is, because they want to spend their time and efforts on bigger things.
I'm afraid this isn't the right way to approach litigation. One can have all kinds of defenses such as statute of limitations, lack of proper service, accord and satisfaction, etc. Just because something is a "valid debt," whatever that means, doesn't mean the debtor loses.
Litigation? Technically, yes, but this isn't some kind of multi-million dollar class action suit. It's a $3,200 credit card debt. By "valid debt" I mean that the OP isn't denying that he bought some stuff with a credit card and then never paid the bill. The creditor has offered to settle for 88 cents on the dollar and eat $400. It would be foolish for the OP to spend more money on a lawyer and risk a judgment that could very well add interest and costs to what he already owes because maybe there's a legal defense that can miraculously erase the debt. I wouldn't be surprised if the creditor asks for a judgment of the full $3,200 if it goes before a judge. If the OP wants to reconsider BK then yes, absolutely consult an attorney. OP can go back to the attorney he previously discussed a BK with. But lawyering up for a $3,200 credit card debt that the debtor acknowledges and the creditor is willing to discount is ridiculous.

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F150HD
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Re: Getting sued by a creditor...how to negotiate it?

Post by F150HD » Fri Mar 06, 2020 7:12 pm

Jags4186 wrote:
Fri Mar 06, 2020 8:40 am
F150HD wrote:
Fri Mar 06, 2020 7:51 am
take out a HELOC, settle for the $2800 and pay it off. Then slowly pay off the HELOC.

Time to look at a 2nd job solely for paying off the debt before the situation gets worse.
Based on OPs description, why would you think he would be able to go out and get approved for a HELOC?

We'd need to determine if the OP has money or not. Since he has student loan debt that he isn't paying on there is a good chance that is going to be a huge #.

In the grand scheme of things, $3200 is not this guys problem. Again, based on OPs description, he is headed straight for bankruptcy. I would not throw good money after bad. No reason to pay an attorney to fight over a $3200 potential judgment when it will get discharged in a chapter 7 or greatly reduced in a chapter 13. Of course, if OP does want to negotiate, one tactic could be that the OP calls up the credit card company attorney and let him know he has all these other debts (medical, mortgage, student loans), the amounts, and that he has $1000 that he is willing to give them today to make them go away. Otherwise expect to be at the very bottom of the list of creditors in his bankruptcy.
Based on OPs description, why would you think he would NOT be able to go out and get approved for a HELOC? he stated he has a mortgage. Far better to have a potentially lower heloc rate then compounding high interest on credit card debt.
"calls up the credit card company attorney...and let him know....that he has $1000 that he is willing to give them today",,..
:confused They already stated they won't take $1000, maybe you should reread the first post.

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Re: Getting sued by a creditor...how to negotiate it?

Post by Jags4186 » Fri Mar 06, 2020 7:43 pm

F150HD wrote:
Fri Mar 06, 2020 7:12 pm
Based on OPs description, why would you think he would NOT be able to go out and get approved for a HELOC? he stated he has a mortgage. Far better to have a potentially lower heloc rate then compounding high interest on credit card debt.
OP states:
1) He's defaulted on a credit card and is being sued.
2) Has student loans he is not paying on.

This is not a recipe for getting approved on a new loan.
F150HD wrote:
Fri Mar 06, 2020 7:12 pm
:confused They already stated they won't take $1000, maybe you should reread the first post.
Maybe you should reread my post. I suggested he call up and offer $1000 again and include the relevant information IF he wants to negotiate. To me, OP is on a one way trip towards bankruptcy so I would not be looking to pay anyone anything at the moment.

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tooluser
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Re: Getting sued by a creditor...how to negotiate it?

Post by tooluser » Fri Mar 06, 2020 8:08 pm

If you do get an agreement of some sort, make sure you get it in writing.
If it's not in writing, it's not really settled.

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danstelter
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Re: Getting sued by a creditor...how to negotiate it?

Post by danstelter » Sat Mar 07, 2020 9:44 am

fru-gal wrote:
Fri Mar 06, 2020 4:29 am
I'm very confused about this whole situation. Why has bankruptcy not been filed?
Because I was married until 08/27/19 and my ex-wife continued to pile up medical debt until that date. Now, I operate a business on credit cards and am making some money at it, and I can't afford to lose that financing. It's around $43,000 total in financing. The business is promising and could help me pay back all the debt eventually - but maybe not when my and my ex's creditors would like.

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danstelter
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Re: Getting sued by a creditor...how to negotiate it?

Post by danstelter » Sat Mar 07, 2020 9:48 am

ARoseByAnyOtherName wrote:
Fri Mar 06, 2020 5:17 am
fru-gal wrote:
Fri Mar 06, 2020 4:29 am
I'm very confused about this whole situation. Why has bankruptcy not been filed?
Agreed, the situation certainly sounds messy but I’m not seeing a logical chain of events here.
Because I was married until 08/27/19 and my ex-wife continued to pile up medical debt until that date. Now, I operate a business on credit cards and am making some money at it, and I can't afford to lose that financing. It's around $43,000 total in financing. The business is promising and could help me pay back all the debt eventually - but maybe not when my and my ex's creditors would like.

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danstelter
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Re: Getting sued by a creditor...how to negotiate it?

Post by danstelter » Sat Mar 07, 2020 9:50 am

TIAX wrote:
Fri Mar 06, 2020 12:35 am
DIFAR31 wrote:
Thu Mar 05, 2020 10:53 pm
TIAX wrote:
Thu Mar 05, 2020 10:38 pm
Start looking for an attorney and tell the court you're trying to get an attorney. You'll probably get an adjournment. Look into law school clinics or other pro bono attorneys.
An attorney for what? There is no dispute that it's a valid debt. The debtor has been offered a $400 discount on an original debt of $3,200. They're cutting him a break. If/when there's a judgment against him he could be on the hook for interest and costs as well (depending on state law; I'm not familiar with Wisconsin). Go to court on Monday and look for whoever is representing the other side. Try to work out a deal before the case is called. This is small potatoes for the creditor. They are probably looking to clear this up just as quickly and with as little pain as the OP is, because they want to spend their time and efforts on bigger things.
I'm afraid this isn't the right way to approach litigation. One can have all kinds of defenses such as statute of limitations, lack of proper service, accord and satisfaction, etc. Just because something is a "valid debt," whatever that means, doesn't mean the debtor loses.
Interesting...I have absolutely no record of being summoned to court whatsoever. The way I found out is by a bunch of law firms sending me letters when I got sued. And then I checked Wisconsin's Circuit Court Access website.

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danstelter
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Re: Getting sued by a creditor...how to negotiate it?

Post by danstelter » Sat Mar 07, 2020 9:53 am

n00b wrote:
Fri Mar 06, 2020 8:25 am
Pay your debts.

PS. We are effectively your creditors.
Did you even bother to read and understand my post? Would you do that in this situation?

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danstelter
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Re: Getting sued by a creditor...how to negotiate it?

Post by danstelter » Sat Mar 07, 2020 9:59 am

8foot7 wrote:
Fri Mar 06, 2020 8:45 am
A comprehensive analysis is called for but you probably don’t have time. If you truly have 60k in debt that you know they legally can come after you for, and you have no assets, then your best of a bunch of bad options is to file for bankruptcy today, which will immediately stay the pending suit against you.

Another option is to visit a bankruptcy attorney today and while you are sitting in the parking lot, call the opposing lawyer and tell him where you are and you’re filing today or Monday and would he like $1200 now to be done with it or be caught up in the mess?

As far as Monday; have you filed an answer?

You say you have a mortgage. For how much and what is the value of your home?

What did you make last year?
So here's the funny thing: I didn't receive any notice from the court or the creditor about the court date. I found out by bankruptcy lawyers pelting me with advertising letters. So do I have a defense there?

Mortgage is around $153,000. Property value around $175,000.

2018 AGI Married Filing Jointly: $49,400
2019 AGI will be Filing Singly and the number will likely increase by a good bit because my business has grown.

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Cobra Commander
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Re: Getting sued by a creditor...how to negotiate it?

Post by Cobra Commander » Sat Mar 07, 2020 2:34 pm

A few thoughts:

You said you were not served. I don't know the civil procedure for your jurisdiction but generally an affidavit of service is filed with the court by the process server (or sheriff). You could get there a little early and see if you can review the affidavit of service. In NY you can ask for what is called a traverse hearing where the process server can be called to testify regarding the method of service of process. Your jurisdiction may or may not have a similar procedure.

You assume that your exposure here is limited to $3,200 and that may not be the case. You said this is an agreement with a credit card company? You can check your agreement with them but I would bet they have a provision in there that allows them to recover attorney fees + court costs + interest + fees, etc. so these would be tacked on to what you otherwise would owe.

Actionable point (maybe). Many states have a service through the state bar where you can get a consult with an attorney for a relatively low fee. I think attorneys do this to generate business but you could lay out the bare bones facts of your case and see if they have any ideas. I agree with the posters upthread that your best course of action is to seek out the attorney representing the creditor before your hearing and make them an offer on the spot if you are not pursuing the bankruptcy path. If you are pursuing the bankruptcy path just remember that even after they get the judgment they still need to take action to collect on the judgment and that will take time as well so you could probably drag things out a bit until you have everything straightened out to the point where you are ready to get on a payment plan. You said you spoke to a bankruptcy attorney so I would follow their guidance in this regard.

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