If you have ever received a summons, you know how stressful it can be!

The summons states that you have 30 days (more or less in certain states) to APPEAR and give an ANSWER...

Does that mean you have to go to court?

This will help...

You know that when we apply for a credit card, store card, or an unsecured loan, we are agreeing to repay whatever we charge at certain interest rate and minimum payment.

So what happens if I cannot keep up with the minimum payments?

You will start to get CALLS and LETTERS 

We know that  the credit card industry makes it's billions and billions from interest rates, annual charges, and late or over-the-limit fees

Miss a payment and they go into "over-drive" to try and get you making payments again.

You may get several calls a day (mostly from computer dialers) from the original creditor or from a debt collector who has been assigned your debt or purchased your debt/account.

As long as your account is with the original creditor, they have a right to call.

But, when the account is transferred, sold or assigned to a collection agency, you can put a stop to the calls:

But remember...

Just because the account has been outsourced for collection and you have successfully stopped the persistent and annoying calls, YOU STILL OWE THE DEBT!

There a several options for dealing with this:

• Debt Management (used to be referred to as Credit Counseling)
• Debt Settlement
• Bankruptcy

For more information on each option, click on the link above.

BACK TO OUR MAIN ISSUE...

You either were not aware of your options or just could not take advantage of either of them due to your financial circumstance.

After the creditor fails to get you to start paying again, they may assign your account to a Law Firm that specializes in Debt Collection.

This firm will make the calls and send the letters as before.

You might have to send them the same "Stop the Calls" letter.

If they are unsuccessful in getting you to start making payments again, they may file a COMPLAINT or CLAIM in the county courthouse where you live.

This will result in a SUMMONS being delivered to you.

The SUMMONS states that you have 30 days (average) to APPEAR  and give an ANSWER.

Sounds like you have 30 days to show up in court and explain why you have not been able to pay this debt.

But, that's NOT what it means!

If you'll look closely at the SUMMONS, the words "APPEAR" and give an "ANSWER" are highlighted or in italics.

It means that if you have absolute, documented proof that you do not owe the debt, you have 30 days to file the proper documentation and proof with the court.

If not done within the 30 days, the PLAINTIFF (creditor or collector) may petition the court to be awarded a DEFAULT JUDGMENT.

This may take 2-3 months depending on several factors.

But, after being awarded the JUDGMENT, they can now apply for a WRIT OF GARNISHMENT or BANK LEVY.

WAGE GARNISHMENT in most states is 25% of your NET (after-tax) income!

Hard to make ends meet on 100% of your net, after-tax income?

Try it with 25% less!

Let's say you are bringing home $4,500 each month.

If a WRIT OF GARNISHMENT is sent to your employer, the employer has not choice but to comply with the COURT ORDER and send $1,125 to the creditor/collector per the ORDER!

Yep, that leaves you with only $3,375 to live on!  

WAGE GARNISHMENT IS TERRIBLE and if an alternative payment arrangement cannot be negotiated, you may be forced to seek BANKRUPTCY protection!

OK...

You received the SUMMONS and you know you owe the debt.

Now you understand that you do not have to file any documentation with the court and you DO NOT HAVE TO GO TO COURT.

NOW WHAT????

Many times a SETTLEMENT can be negotiated with the law firm/collector.

If a SETTLEMENT cannot be negotiated, a repayment agreement called a STIPULATED AGREEMENT can be set up.

This STIP is usually filed with the court and it basically says that as long as you make the agreed upon payments on the agreed upon date, they will not move forward with legal options such as WAGE GARNISHMENT or BANK LEVIES.

Once the STIP has been completed, a LETTER OF SATISFACTION is sent to the court.

The JUDGEMENT is removed.

This is supposed to happen, but you have to follow up as many collectors do not do this!

OK...I hope you understand a little more about this process now.

The most important thing you need to take away from this is:

Even though you do not have to go to court (or necessarily file any documents),

YOU CANNOT IGNORE the SUMMONS!

You must be "PRO-ACTIVE" to prevent garnishments, levies or liens.

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If your are having a hard time keeping up with your credit card debt, you may start getting calls from a debt collector.  This can be very stressful!  You need to know what a debt collector can do and cannotg do.  This will help!

There are many reasons you may be falling behind in making at least your minimum payments:

• Laid off or reduced hours due to Covid-19
• Divorce
• Loss of loved one
• Too little fixed income in retirement
• Illness or disability
• Just bad decisions

So if you don't have enough stress right now, the phone rings and the caller says something like,

" This is Bob from XYZ collections.  We have your Visa Card account with a balance of $8,500.  You must make a payment today or we may decide to turn your account over to an attorney for collection!"

You try to explain your situation, but it doesn't do any good. 

He starts back in saying there are several options they have for collection, including:

• Lawsuits
• Garhishments
• Bank Levy
• Lien against your home

You hang up and start thinking:

Can they start taking money from my paycheck?  I can barely make ends meet now!

If they take money out of my bank account, I can't pay the rent or mortgage!  

Will I have to sell my house if they put a lien on it?

And your mind just keeps going....

OK, calm down.  

There are several laws to protect consumers from illegal debt collection efforts found in the Fair Debt Collection Practices Act (FDCPA).

Can debt collectors contact me any time or any place?

They cannot call before 8am or after 9pm.

They can call you at work, but you can stop them by telling them you cannot receive calls at work.

Once your account is transferred or sold to a collection agency, you can put a stop to the calls:

Can a Debt Collector take money from my paycheck or bank account?

A debt collector cannot touch your money (paycheck or bank account) without first obtaining a judgment and writ of levy from the court.

Having said that, there are certain types of debts that don't require a court order for garnishments, such as:

• Failure to pay alimony or child support
• Taxes
• Federal Student Loans (each state has different laws)

There are several sources of income that are exempt from garnishments or levies:

• Social Security
• Pension and/or retirement funds
• Alimony or Child support
• Disablitiy income 

But, as far as your unsecured debts (credit cards, personal loan, medical bills, etc.) are concerned, there is a whole process that must take place BEFORE a creditor can garnish or levy.

After the original creditor or the debt collector attempts to get you to start making payments by making numerous calls and sending letters, they may dedice to seek legal options.

First, they must FILE A COMPLAINT in the county court where you live.

This will result is a SUMMONS that must be delivered to you.

The summons will state that the PLAINTIFF (creditor) is CLAIMING that you owe a certain amount for this specific debt.

It will also say that you have 30 days (varies by state or court) to APPEAR AND GIVE AN ANSWER.

Although this sounds like you have to go to court, that's not what it means!

If you will read carefully, the words "APPEAR" and give an "ANSWER" are in italics!

This basically means that if you CAN PROVE (with written, clear documentation) that you do not own this debt, you have 30 days (or whatever you state or court says) to file an ANSWER with the court.

This ANSWER must be in the proper, legal form and therefore may require an attorney to prepare and there is a filing fee as well.  But, these costs may be worth it if you can PROVE (not just say) that you do not owe the debt.

But if you owe the debt they are CLAIMING you owe, what now?

Now you have to take action!

You need to contact the attorney for the plaintiff (collector) and see if you can work out a repayment plan or settlement to keep them from moving forward with their lawsuit!

Please....DO NOT IGNORE THE SUMMONS!  It will not just "go away"!

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A know on the door and someone hands you some papers and says...

• "You've been served" how did this happen?
• Why did this happen?
• What can I do about it now?

If you have ever received a summons before, it can be a very stressful experience!

The Summons will say something like...

"You have 30 days to APPEAR and give an ANSWER..."

Sure sounds like you are going to have to go to court!

WHAT NOW????

Before I get into the "why did i receive this...", let me tell you that about 99% of the time you will NOT HAVE TO GO TO COURT.

If you look at the summons carefully, you will see that the words APPEAR and ANSWER are italicized.

This is a legal term/phrase that basically means that if you can PROVE with WRITTEN DOCUMENTATION that you don't owe or have paid this debt (THE CLAIM), you have 30 days to file the proper forms with the court.

Since most of the time the CLAIM is correct, there is no need to do that.

SO WHAT NOW????

The biggest mistake many people make is to IGNORE the summons!

If you do, then most likely the attorney for the PLAINTIFF (owner of the debt) will seek a DEFAULT JUDGMENT.

Now that a JUDGMENT has been awarded, the attorney can petition the court for a writ of GARNISHMENT (wages, bank or both).

In most states, this is about 25% of your NET TAKE HOME pay.

Your employer must comply with the WRIT OF GARNISHMENT or face severe penalties!

Think it was hard to pay the bills on you current take home check?

Now you have 25 %  less...

DON'T IGNORE THE SUMMONS!!!!

Contact the attorney for the plaintife and see if you can work out some kind of repayment agreement to stop the garnishment options.

This could be a:

• Full settlement for less than the current claim
• Monthly payments on the full balance
• Or even a settlement for less than the balance paid in monthly payments

Once a wage garnishment starts, it is very difficult to get the attorney to accept a settlement!

OK...WHY DID ALL THIS HAPPEN ? ? ?

After dealing with clients for almost 20 years, it still amazes me when one of them says that they never received any summons or had no idea they owed the debt.

I guess that is possible, but ....

Anyway, most likely, here's what happened.

Due to circumstances beyond you control, you just couldn't keep up witht the minimum payments due on your credit cards or other unsecured accounts.

And yes, you may have even used a cash advance on one to help pay the minimum due on the other!

I know, you fully intended to pay all this back, but your circumstances just haven't changed.

The Creditor sent letters and made phone calls, but they were not successful.

So, in some cases, they sell or assign your account to a Law Firm that specializes in debt collection.

Even so, if you had contacted the collector or attorney/collector, you should have been able to negotiate some sort of settlement that would not only save you some money, but stop any legal options!

Each creditor/collector is different and so there are no set amount of settlements.

A SUMMONS doesn't just happen by accident.

The good news is that regardless of the circumstances, there is most likely an alternative to wage or bank garnishment.

A wage garnishment can be financially devastating, taking 25% of you net, take-home paycheck!

Here what you need to know to prevent or how to stop garnishments.

A wage garnishment doesn't "just happen".  After years and years of assisting people with debt problems, it still always amazes me when one of our prospects or newer clients that have received a notice from their employer that their pay check is going to be garnished, says something like:

I had no idea that this could happen.  I never received anything about it.

 How did this happen?

OK... Time Out!!!

A wage garnishment (technically called a Writ of Garnishment) can't happen without several steps preceding the order.

Let's start from the start...

You have several credit cards or other unsecured debts and because of something that has happened to you, such as:

• Divorce
• Severe illness or disability
• Death of spouse or loved one
• Too little fixed income after retirement

...now you just cannot keep up with the minimum payments due and start missing payments or just stop making payments all together.

When this happens, the creditor will start calling and writing letters trying to find out what is going on and to see if something can be done to get you to start making payments again.

If you ignore these calls and/or letters (and many, many people do), then the original creditor has no choice but to charge off, transfer or even sell the account to a debt collector or debt buyer.

Now the calls and letters really start to increase!

The good news is that you can put a stop to these annoying and sometimes harassing calls:

Just follow the link above, and the calls will stop.

But, that doesn't mean that these debt collectors are going to stop their efforts to get you to pay!

So what should you do?

Let's say that you have several credit cards and because of going through a serious illness or injury, you have not been able to work, your income went down, and now, you are not able to make even the minimum required payments due.

When the creditor or collector calls, you may be able to negotiate a SETTLEMENT.

Again, depending on a number of circumstances, the creditor or collector may accept an amount that is 40% - 60% of the balance.

If you don't engage them, then the creditor or collector may decide to FILE A CLAIM against you in the county court where you live.

After the Claim has been filed, a SUMMONS will be issued and you will be SERVED the summons.  This could be at home or even at work!

When you receive the Summons, again, you CAN NOT IGNORE THE SUMMONS!  Even after the summons has issued and served, you should still be able to negotiate either a settlement or a repayment agreement.

But, if you don't, then there will be a court date set, and the creditor/collector will be awarded a DEFAULT JUDGMENT.

Once the judgment has been awarded, the Plaintiff (creditor/collector) can apply for a WRIT OFGARNISHMENT.  This will be sent to your employer and your employer has no choice but to obey the Writ!

Most likely, your state demands that the employer withhold an additions 25% of your net check (after taxes and required deductions have been removed).

This can be devastating!  Here's an example:

• You earn $36,000/year or $3,000/month.  
• You are paid every two weeks and that bi-monthly check is $1500.
• State and Federal taxes equal 30%, so $450 is withheld and your net check is now $1,050.
• Your employer must withhold an additions 25% or $262.50.
• That's $525 each month!  You think it was hard to pay bills before...

I'm thinking you are starting to understand, that you cannot just ignore your debts, letters or calls, and especially a summons.

If you did, and now you have a wage garnishment, here's what you can do:

Contact the attorney for the plaintiff (that's the collector or creditor).

Explain you situation and if you have it (most likely you won't) offer a lump sum settlement on a reduced balance.

Usually, they won't take a reduction, but if the offer is large enough, they might.

Most of the time, they will be willing to accept an agreement whereby you pay them, say $200 -$300 a month (instead of, in this example, $525/month).

But, due to your financial hardship, you just can't afford any payment or the garnishment?

In this case, you should seek the services of a bankruptcy attorney.  This may be your only choice to protect yourself from the creditors!

I hope you understand my simple point....

• A wage garnishment doesn't just happen.
• If it does, you still have options.
• The key is to take action!  Don't just "hide your head in the sand"!

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If you receive a notice that your wages are going to be garnished, you need to act, and act fast! Here's some helpful tips you can use:

Here at Debt Relief NW, it seems like we get dozens of calls weekly from people who "just found out", that their pay check was going to garnished!

I've highlighted the phrase, "just found out" to make a point:

A WAGE GARNISHMENT DOESN'T JUST HAPPEN!

There is a legal process that must unfold before a creditor or debt collector can receive a writ of garnishment from he court to send to your employer.

I am going to outline, in a nutshell, so to speak, of the process and what you:

• COULD HAVE DONE TO PREVENT IT and,
• WHAT YOU CAN DO NOW TO STOP IT

For the purpose of this article, I'm only referring to UNSECURED DEBTS, such as:

• Credit or Store Cards
• Personal loans (NOT mortgage or auto loans)
• Deficiency judgment after a repossession
• Medical bills
• Private student loans

OK, let me lay out an example (based on over 15 years of helping people with their debt issues):

I'll call him Joe.  Joe has a decent job and earns about $20/hour.  At 40 hours a week and an average of 4.2 weeks/month, his GROSS (before taxes and deductions) is $3360/month.

Of course, after taxes and other deductions, his NET INCOME ("TAKE HOME")  is only about $2352 (approximately 30% less than his Gross Income).

He is renting an apartment and has all of the usual bills.

His total budget or outgo is about $2100 a month, leaving him barely $250 for emergencies, etc.

Included in that budget is about $15,000 of credit card debt spread over 3 cards:

• Visa                 $8,000
• Master Card    $6,000
• Home Depot    $1,000

The total monthly MINIMUM PAYMENTS on all add up to $300/month.

Joe is having a very difficult time making the $300/month, minimum payments and then, he is working around the house and falls off a ladder and breaks his leg!

His insurance policy doesn't provide for any "disability income" for the accident, so not only is he going to be off work for about 3-4 months, he doesn't have any means of income.

Fortunately, he had a little savings account, but it wasn't enough to cover all of his monthly budget.

So, Joe does what thousands of people do every day, he pays all of the most important bills, like his rent, utilities, groceries, etc. and let's the credit card bills get behind.

NOW WHAT?

After he misses a payment or two, he starts to get letters and calls, lots of calls!

At this point, Joe can't do anything about the annoying calls, because as long as his account is still with the original creditor, they have the right to call him about it.

But, once the account is charged off, sold, or transferred to a collection agency or other third party, then he can put a stop to the calls!.  (I'll show you how in just a minute.)

Of course, Joe tries to explain to the caller what he is going through and they may or may not offer some kind of "HARDSHIP PROGRAM"  to help him through this.  But, it really doesn't matter as he just will not be able to make any payments until he is back to work and get some other bills caught up.

NEXT...

The original creditor(s) will most likely charge off, sell or transfer the account to a collector after about 120 days of so if nothing can be arranged.

So now, Joe starts getting letters and calls (LOTS OF CALLS)  debt collectors!

He'd like to make some kind of arrangement with them, but they are demanding full payment on the balance or else!

At this point, he can put a stop to these calls.  Here's how:

But, even though the calls are stopped and he is just "ignoring" the letters, the debt is not going to go away.

THE DEBT COLLECTOR DECIDES TO FILE A CLAIM

If the debt collector is unsuccessful in getting you to start making payments, then the debt collector may decide to start the legal process of obtaining a judgment.

An attorney for the collector will FILE A CLAIM at the courthouse of the county where you reside.

This CLAIM will generate a SUMMONS that will be delivered to you, usually in person, but sometimes by registered mail.

I'm not going to go into all of the details of what to do with the SUMMONS here, but you can check out a blog I've written that will be very helpful called:

WHAT TO DO IF YOU RECEIVE A SUMMONS.

But, please DO NOT IGNORE THE SUMMONS!

The fact that the collector decided to file a CLAIM proves that they are very serious about collecting on this debt.

If you ignore the summons, then a court date will be scheduled (you don't have to go), but a representative from the collector (now called the PLAINTIFF) will show up and the court will award them a DEFAULT JUDGMENT.

It's called a "default" judgment because no one contested it and they won by default.

NOW WHAT HAPPENS?

Now, the PLAINTIFF ( the collector) can apply for a WRIT OF GARNISHMENT.

The Writ of Garnishment is sent to your employer and they, by law, must obey the writ and withhold up to 25% of your net, after-tax, income.

Joe has just gone back to work and then he get's this notice from the payroll department that he is being garnished...and he starts to panic, which is understandable!

Remember when we did the math earlier about what his actual "take-home" or "after tax" income was?

That amount was $ 2,352.

Most states allow for up to 25% of the net, after-tax check to be deducted and sent to the creditor until the full balance (inflated now with interest and legal fees) is repaid!

WOW...WAIT A MINUTE...

$2,352 X 25% = $588 will be deducted from Joe's Net Check!

He could barely make it on the $2352, and now he has to somehow make it on $1764!

Yep....PANIC!

OK, so Joe's really in trouble, you get it...

How did this happen and what can he do about it now?

Joe could have stopped this "process" and ultimate JUDGMENT by trying to work out a SETTLEMENT PLAN with the debt collector.

Most debt collectors would much rather accept less than the full balance than go to all of the time and expense to seek a judgment:

When Joe received the summons, he could have contacted the attorney for the collector and most likely worked out some kind of repayment arrangement that may have included a reduced settlement!

Once the judgment was awarded and the plaintiff had spent more money in legal fees, they went after the garnishment.

But that doesn't mean that you still could not work out something to stop the garnishment!

You may be able to get them to stop the garnishment and take a more "reasonable" amount to repay the debt.

Depending on the circumstances, you may even be able to not only stop the garnishment, but also get a reduced settlement.  Each case is a little different.

If this help, great.

If you find it a little "over-whelming", then maybe we can help:

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