If you cannot keep up with the minimum payments due on your credit cards, a creditor or debt collector may decide to file a CLAIM against you!

If this happens, you will receive a SUMMONS.

The summons will show who the PLAINTIFF is.

This is the creditor or Debt Collector.

You will be named as the DEFENDENT.

The summons will state the particulars:

How much the debt is, etc.

It will also say something like...

You have 30 days to APPEAR and give an ANSWER.

This DOES NOT mean that you have to go to court in 30 days!

It means that if you have WRITTEN PROOF why you do not owe this CLAIM/DEBT, you have 30 days to submit your ANSWER to the court.

This ANSWER must be in the proper legal form and often requires an attorney to prepare and deliver to the court.

Not only will you have to pay the attorney, you will also have to pay a FILING FEE!

If you know you owe the debt, there is no use wasting your time and money.

NOW WHAT HAPPENS?

This is where a lot of people get themselves into trouble by ignoring the summons! 

• YOU CANNOT IGNORE THE SUMMONS!
  
  
• IT WILL NOT JUST "GO AWAY"!

If you ignore the summons and the court awards the PLAINTIFF a DEFAULT JUDGMENT, then the PLAINTIFF has options to collect on the judgment:

1) If you have earned income (mainly W-2 income), they can apply for a WRIT OF GARNISHMENT on your wages. 

In most states, this is 25% of your AFTER TAX/TAKE HOME income!

Let's say you earn $5,000/month and your over-all tax rate is 30%.

That means your after tax/take home is about $3,500.

If you are garnished, your employer has NO CHOICE but to comply with the WRIT OF GARNISHMENT or face legal action.

That means that your employer would have to send 25% of the $3,500 to the PLAINTIFF!  THAT'S $875, leaving you only $2,625 to live on!

OR...

2)  The Plaintiff could apply for a BANK GARNISHMENT!

If awarded, a notice is sent to your bank and any funds you have in your checking and/or savings would be frozen and sent to the plaintiff!

That would be devasting!

Yes, there are EXEMPTIONS on what "TYPE" of income deposited in your account can be garnished such as income from:

• Social Security benefits
• Supplemental Security Income benefits (Disability)
• public assistance benefits
• unemployment benefits
• veteran's benefits
• child support, and
• federal employee and civil service retirement benefits.

But, the problem is twofold:

Even if your bank account SHOULD BE exempt, many times the bank does not protect you and your funds are FROZEN FOR A LONG TIME!

The bank account is NOT PROTECTED from garnishment if you             CO-MINGLE exempt funds with NON-EXEMPT FUNDS.

Let's say you have your Social Security and Retirement checks deposited automatically in your bank.

You do a little "side job" or even earn a few dollars part-time and deposit that money in the same account.

You just CO-MINGLED funds and now all of those funds are open for garnishment!

Starting to get the picture?

There are several options on how to deal with a SUMMONS that can prevent all the above, but you have to be PRO-ACTIVE.

In most cases, a STIPULATED AGREEMENT negotiated.

This is a basically an agreement saying as long as you pay such-in-such, the Plaintiff will not apply for garnishments.

The Stipulated Agreement is filed with the court and once it is completed or "satisfied", it is removed.

It is also possible to negotiate a SETTLEMENT for less than the balance claimed in the summons.  

This is usually about 70%-80% of the balance and usually must be paid in a lump sum or in some cases, over a period of time.

To summarize...

If you receive a SUMMONS, you need to take care of it as soon as possible to prevent a judgment and potential garnishment or bank levies.

If you receive a SUMMONS, it usually means you have more debt than you can handle.  We can help:

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When we enroll a new client for the Debt Settlement Program, most of the time they are confused about what a debt collector can and cannot do.

Although the whole experience of facing severe financial circumstances is stressful, let me help alleviate your fears.

OK...

For all kinds of reasons or circumstances, you just cannot keep up with the minimum payments required on your credit card accounts.

The annoying calls and letters come many, many times a day!

The last call left a message and the guy said that unless you contact them right away, they may decide to start legal processes to collect the money you owe.

Your mind starts fearfully asking:

• Can they take money out of my bank accounts?
• What about my paycheck?  Is it safe?
• Will I have to sell my house or car?
• What about my jewelry, tools, or other things I value?

Let me walk you through the debt collection process so you can start to understand what a collector can and cannot do:

Once you miss a couple of months of the required payments due, you'll start getting letters saying something like...

"Mr. Jones, your XYZ Account is seriously past due and unless you call us immediately, your account may be turned over to an attorney for collection."

If you've just had a temporary financial setback and have enough money to catch up or start making payments again, you may want to call and see what they will do to help get you back on track.

They should be willing to work out some kind of plan to start taking your monthly payments again.

But if you find yourself with just too much debt and not enough money coming in to keep up, then what should you do?

• How delinquent is the account?
• How much do you owe?
• What kind of account it is?
• Who the creditor is (some will work with you and some will not).

If it comes down to paying the rent or mortgage, utilities, groceries, etc. (the really important bills) and making credit card (unsecured) payments,

PAY THE IMPORTANT BILLS FIRST!!!!!!

Usually a creditor will try to get you back to paying monthly payments (they need that interest!) for a couple of months.

If unsuccessful, they will either send to their internal recovery department or to a debt collector or even sold to a debt buyer.

An account is deemed "CHARGED OFF" when the creditor decides that they are not going to spend any more time trying to collect and are going to write the account off as a loss.

Yes, there are companies that buy millions of dollars of debt for pennies on the dollar in order to try and collect.

Either way, now you can do a couple of things:

1) PUT A STOP TO THE CALLS!

2)  You may be able to negotiate a SETTLEMENT for less than the balance.

Your account may now be with the original creditor's internal recovery department, a debt collection agency or a Law Firm that specializes in debt collection.

HERE'S WHAT YOU NEED TO KNOW...

At this point, creditor, debt collector, debt buyer or law firm CANNOT:

• Garnish your wages, retirement income, disability income (an several other exempt income sources).
• Levy your bank account
• Repossess your TV, stereo, furniture, jewelry, tools, etc. (unless they were used as collateral)
• Arrest you or most any other thing you may think!!!!

BUT... (very important you understand the following!):

If no agreement can be reached, the creditor or collector may decide to file a CLAIM.

A CLAIM is a legal document filed with the court of the county of your residence. 

You will be delivered a SUMMONS.

Basically is says that XYZ is claiming that you owe $$$$ and that if you want to dispute the CLAIM you have (avg.) of 30 days to file an ANSWER with the court.

A ANSWER is a legal document (usually prepared by an attorney) that PROVES that you have paid or why you do not owe the debt.  There is a fee for filing the ANSWER and fees for the attorney who prepares it.

Most people know they owe the debt so they don't file the ANSWER.

NOW WHAT???

At this point, an agreement can still be negotiated to stop the legal process, but is it VERY IMPORTANT that you DO NOT IGNORE the SUMMONS!!!

If an agreement cannot be negotiated, the the PLAINTIFF (the creditor or one filing the claim) may move forward for a DEFAULT JUDGMENT.

You don't want this to happen!

If a JUDGMENT is awarded to the PLAINTIFF, then now the PLAINTIFF has the right to apply for a WRIT OF GARNISHMENT OF WAGES OR BANK LEVY.

To prevent this, a SETTLEMENT or STIPULATED AGREEMENT may be negotiated.

A SETTLEMENT is an agreement whereby the PLAINTIFF agrees to accept an amount less than the balance due.  It may have to be paid in a LUMP SUM or in many cases, a LONG-TERM PAYMENT agreement.

Either of these is usually much better than a WAGE GARNISHMENT!

A WAGE GARNISHMENT is usually (in most states) 25% of you net (after tax) paycheck!

Let's say you earn $5,000/month.  If State (if you have) and Federal tax withholding equals 35%, you net take home would be about $3250.

25% of $3250 equals $812.50 ! ! !

If you're facing a financial crisis now, how could you survive if your income was cut by over $800 more!

Again... DO NOT IGNORE A SUMMONS!

SUMMARY:

A creditor or debt collector cannot just "take your stuff" when you don't pay your required payments due.

There's a whole process that must be completed first.

However, YOU HAVE TO TAKE ACTION!

It is not easy dealing with collectors and attorneys. 

Time consuming and frustrating, but absolutely necessary to prevent GARNISHMENTS!

This may help:

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If it's not bad enough having too many debts and bills, receiving a SUMMONS is especially stressful!

One of our clients sent me an email this morning and said...

"I received this subpoena last night.  Kind of freaking out.  What do I do!"

We've been helping people deal with the stress of having to much debt and just not enough money to keep up for many years.

I've written many blogs about what to do with or how to prevent a summons, but wanted to give some insight that may help.

WHY DID YOU RECEIVE THE SUMMONS?

When you miss payments due on your accounts (I'm only talking about unsecured accounts like credit cards, medical bills, etc.) the original creditor will start calling and sending letters.

They may offer a few options for getting you "back on track", but for most people, these don't help or are possible due to your circumstances.

Trying to explain to the agent is usually a waste of time, so I don't advise trying.

If you do, just say something like...

"I've had some things happen and can't make payments right now.  I intend to get caught up soon and would appreciate it if you'd stop calling."

After a few months, most likely your account will be transferred, assigned or even sold to a collection agency.

Now you can at least put a stop to the calls:

DEALING WITH DEBT COLLECTORS

There are thousands of companies that make a lot of money collecting bad or old debts!  These companies may take accounts on consignment, in order to earn a portion of the money they recover.

Or, they may have just purchased the account for pennies-on-the-dollar from creditors who have given up on trying to collect and have just written off the debt as a loss.

The debt collector most likely will be open to a SETTLEMENT.  The amount of settlement is determined by many factors, but on the average, a settlement of 50% to 70% (more or less) may be available.

 DON'T IGNORE A SUMMONS !

To many people take the "hide your head in the sand" approach to their financial crisis.  Although I certainly understand and appreciate how they feel, the debt is not going to go away!

If the calls and letters from a debt collector go unanswered or returned, after a few months, the debt may be:

1. Recalled back to the original creditor
2. Transferred to another debt collection agency
3. Sold or transferred to a Law Firm that specializes in Debt Collection

If your account lands with #3, and if they cannot reach you or an agreement or settlement cannot me negotiated, they may decide to FILE A CLAIM.

Once a CLAIM is filed with your local county court, a SUMMONS is prepared and sent out for delivery.

The delivery may be by a COUNTY SHERIFF or COMPANY PAID TO DELIVER the summons.

Either way, receiving a summons is (like my client said), kinda "FREAKS YOU OUT!"

Although a summons (or small claims order) may differ, most of them state something like the one my client received:

     "YOU ARE HEREBY REQUIRED to appear and defend the Complaint filed against you in the above-entitled cause within 30 days from the date of service of this summons on you, and in case of your failure to do so, Plaintiff (creditor or debt collector you owe) will apply to the court for the relief demanded in the Complaint."

Well, it sure sounds like you have to go to court within 30 days, doesn't it!

But, if you kept reading, it would explain.  (I'll paraphrase and explain to save time:)

It says you must "APPEAR".  Notice the word "appear" is in italics.

It then goes on to explain what "appear" means:

It basically says that if you wish to give proof of why you do not owe the CLAIM being made, you have 30 days to provide the court with a legal document called a "motion" or "answer".  You also have to pay the required filing fee ($165 in this particular county court).

The summons goes on to say that if you have questions you should see an attorney immediately and usually gives a phone number for your state's Bar Lawyer Referral Service.

NOW WHAT?

OK, so you have the summons and understand that you don't have to go to court.  What should you do?

The worst thing you can do is ignore the summons!!!!!!!

If you ignore the summons, a JUDGMENT will most likely be awarded to the PLAINTIFF.

If this happens, the attorney for the plaintiff will seek the legal options available to get funds awarded in the judgment.  These include:

• Wage Garnishment
• Bank Levy of your bank accounts
• Placing a lien against your home or other property

I don't have the space here to address each of these, and there are things you may be able to do if you are facing one or more of these due to a judgment.

The important point is....

DON'T LET IT GET TO THIS POINT!!!

In most cases, some kind of agreement or solution can be negotiated before or even after a JUDGMENT has been awarded.

You may have to repay the entire balance due to avoid a garnishment, levy or lien.

This will most likely be a STIPULATED AGREEMENT that will be filed with the court.

This basically will say that as long as you make the required payments specified int he Stipulated Agreement, the Plaintiff will not continue to seek the legal options described above.

Once the Stipulated Agreement is completed, a LETTER OF SATISFACTION will be mailed to the court and the judgment is removed.

Now, I've explain a lot. What's the main points?

You have several options to prevent your account from ever getting to becoming a judgment.

• You can't ignore the debt.
• It will not go away!
• If you receive a summons, don't panic!

If you are overwhelmed, we may be able to help:

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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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You're already having a very hard time paying your bills and keeping up the rent!  Now you get the bad news that your wages are going to be garnished!  Now what?

I"ve been helping people deal with the stress of managing debt for a long time. 

It's one thing to be so tight in your budget that you are barely making ends meet and only able to pay the minimum payments on your credit cards and/or other debts you owe.

Today happens to be a Friday and for a lot of normal, hard working people, they are looking forward to getting their pay check and having a couple of days off from work!

But, when you open your payroll envelope, you get a shock!

After all of the taxes and other deductions are withheld from your check, the net/take home amount was going to barely cover the bills that are due (or over-due)!

Now, 25% (average amount that can be garnished) more is deducted.

OMG!!!

What can you do?

OK....take a breath...and let's go back a little while and see what happened.

We get calls almost every week from someone who has either been garnished or has just received a notice that they are going to be garnished.

We often hear,

"I had no idea this could happen!" or....

"I never received anything about this!"  or....

"I thought this bill was paid a long time ago because I haven't received anything in the mail or had any calls for over a year or so."

Well, I realize that is some rare cases, some of the above comments may be true, but most often, it is basically that the person had their 'head-in-the-sand" type of an belief as things were just so bad they didn't want to think about it!

I understand....been there...done that.

Here's what happened and why this garnishment happened:

When an account (just talking about normal, unsecured credit card type accounts) becomes delinquent, a process begins by the original creditor:

STATEMENTS

The next statement you get will show the PAST DUE amount and the "late fee charges" that have now been added to your balance.

Somewhere on the statement it will tell you that you need to get caught up and to call the customer service number if you need help.....or something like that.

Let's say you just cannot make any payment and don't want to talk to them about it.

CALLS AND LETTERS

Now you will start getting letters saying something like:

"Your account is SERIOUSLY past due and you need to do...... "

The letter may state that if you don't do "this or that", they may close and send your account to a debt collector or attorney for collection.

Now, 4 or 5 months have gone by and although you get a call and letter from the original creditor now and then, nothing really has happened.

DEBT COLLECTOR

When the original creditor is unable to get you to pay on the account, they will usually either "charge off" the account and transfer or sell to a debt collector.

I'm not going to get into how difficult it is to work with some debt collectors in this blog.  I've written numerous articles and blogs about "Dealing with Debt Collectors" that may be very helpful for you. 

The debt collectors job is simple....Get you to pay them money!

The Fair Debt Collection Practices Act is to protect consumers from illegal debt collection tactics.

Everyone should have a general knowledge about your rights, so take some time to check out a very good article:

The Fair Trade Commission, Debt Collectors and your Rights

Now that your account has been turned over to a debt collector, you can put a stop to the annoying and often harassing phone calls:

But, just because you get them to stop calling doesn't mean that your debt problem has gone away!

If the debt collector cannot get you to pay up, they may decide to file a claim in your local county court.

If this happens, you are going to receive a....

SUMMONS

The summons will state that a "claim" has been filed against you for the debt you owe with "so-in-so" creditor and that you have 20 (or 30) days in which to give an "ANSWER" in court......

NO, YOU DON'T HAVE TO GO TO COURT!  (unless you want to)

An "answer" is a legal response from you stating and explaining why you do not owe that debt and therefore are not subject to this claim/summons.

It is a legal document and not only will you need to hire an attorney, there is also a fee for filing the "answer", so make sure you can prove that you don't owe the debt first!

Most of the time an "answer" is not necessary, so now the "PLAINTIFF" (the debt collector or the party filing the claim) will wait a while (varies) before taking the next step.

DEFAULT JUDGMENT

If you don't respond to the summons, the plaintiff/debt collector may decide to send one of their legal representatives to court in order to awarded a judgment.

This is usually called a "default judgment" since you didn't contest the "claim", the debt collector/plaintiff wins by default.

Now what?

WAGE GARNISHMENT, BANK LEVY OR PROPERTY LIEN

OK, now things are serious....

With the default judgment, the plaintiff can now apply for of several options for getting something from you:

• a writ of wage garnishment
• a writ of garnishment/levy on your bank account(s)
• Lien placed on your property (usually your home)

Writ of wage garnishment

A legal document is sent to your employer.  The employer (by law) must withhold an average of 25% of your "after-tax" payroll check until the entire judgment awarded is paid!  There are exemptions, but unless you are making very little income, your in trouble!

Writ of garnishment/bank levy

Yes, with that default judgment, the plaintiff can find your bank or bank accounts and send the writ of garnishment/levy to the bank.

The bank is supposed to go back a couple of months and make sure that your account does not have funds that are from "exempt" sources like:

• Social Security
• Retirement income
• Disability income

Again, I'm not going to get into all of the exemptions in this blog, but you might want to check out:

Are Social Security benefits Protected From a Bank Levy?

But for this blog, you are employed (W-2 Income) and so they have the legal right to go after your income, bank account or other property (not exempt).

PROPERTY LIEN

Although a plaintiff can apply for a lien against certain property (not exempt), most often they will apply for a lien against your home, paid for or not.

This DOES NOT mean that you have to sell your house to pay the debt/judgment.

It means that when you sell or transfer the property (death or gift), this judgment must be paid!

Sure, this may make the plaintiff many years to collect, but that is an option for them.

FINALLY....

I think you can start to see that the best way to put a stop to a wage garnishment is to make every attempt at not letting your delinquent account become a judgment!

There are many OPTIONS that you can take advantage of to stop your account from every becoming a "judgment"!

But, since you have the wage garnishment happening (or about to happen), here's what you (or with help) need to do:

Contact the attorney who filed the writ of garnishment

In most cases, they are usually willing to set up some kind of repayment plan and stop the garnishment.

You will need to be able to show your financial hardship and make a "reasonable" payment each month!

They may want you to sign a "Stipulated Agreement" that will be filed with the court.

It basically says that as long as you make the payments agreed upon, they will not pursue further legal action.

If you have a very large amount of funds available, you may be able to make a SETTLEMENT OFFER to have the judgment satisfied and the writ of garnishment removed.

This offer will most likely need to be much larger than the normal settlements we negotiate for our clients, because they have leverage on you!

BANKRUPTCY

If you are unsuccessful at putting a stop to your garnishment (wage or bank), you may be forced to seek protection through bankruptcy.

Bankruptcy is a legal "tool", so to speak, that allows a person an avenue to get their lives back on track.

Make sure to contact an attorney whose practice deals with all aspects of bankruptcy!

It should be obvious that the way to stop a wage garnishment is to not let your accounts/debts ever get to that point!

We can show you various options of how to deal with your specific debt situation.

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Three years ago we were facing bankruptcy.  We decided to use a Debt Settlement Company.  Now we are Debt Free, our Credit Score has improved and are in control of our financial lives again!

BACKGROUND....

My story is probably much like anyone who has had to face the prospect of bankruptcy!

I had been employed with a fairly large company for about five years.  The pay was decent and although I can't say that I "loved" my job, I didn't "hate" it either.

Rumors had been circulating about a possible sale of the company to a larger competitor for about 6 months, but I was told "Don't worry, you'll be OK".

Well, one Friday afternoon, my supervisor called me into his office and let me know that the sale was going to happen and that the new company was going to close down my division.

Then I heard those dreaded words..."I'm really sorry, but we are going to have to let you go."

Talk about a shock!  All I could think of was...

NOW WHAT?

I'm married with two kids (ages 6 and 8).

My wife doesn't work because her net take-home pay would barely pay for day care, so why bother?

So here I am:

• Unemployed (for the first time in my life!)
• Mortgage
• Family
• No real job prospects!

The company had some counselors available for job searches, etc., but after my session, I knew I was in trouble!

I signed up for unemployment and hoped that I'd find a job before the benefits ran out....wrong!

We had very little savings.  Well, I probably shouldn't call it a "savings account" because we really just transferred some money from checking just to keep it "out of reach" until an emergency came up.  Seems like those "emergencies" always came up!

JOB SEARCH, BILLS, and STRESS

At first, I wasn't really worried because I thought I would be able to find another job rather quickly.  Boy, was I wrong!

I sent out dozens of resumes and went on several interviews, but no luck.

We had used the "savings" up a couple of months ago when the hot water heater stopped working.  The plumber said that there was nothing he could do to repair it as it was just too old, had rust, and parts where very hard to find!

So, I used one of my credit cards to buy a new one and pay for the installation.  

Even though the total was about $800, it really only increased my minimum monthly payment by $25 or so.

The unemployment finally ran out and I had to take a job at just a little over minimum wage.  It was better than nothing, but the final take home pay was just not enough to cover everything.

I was really beginning to stress out!

CREDIT CARDS TO THE RESCUE?

As time went by, I continued to not only send out resumes and work at my job, but the bills started piling up.

My wife and I decided to pay only the absolute essential bills like the mortgage, utilities, groceries, etc. and let the credit card bills, medical bills, and yes, even the car payment get behind.  

As the total credit card debt was increasing due to late fees and over-the-limit fees, we had to use a CASH ADVANCE once in a while to pay a utility or grocery bill.

The crazy thing was, even though we hadn't made a payment in 3-4 months, we would still get an OFFER from a credit card company for another card or to make consolidate the others with a BALANCE TRANSFER.  We had three cards from one company!  

Made no sense!

Sure, this "rob Peter to pay Paul" action was holding them off, but we knew that a "day of reckoning was coming!"

DECISION TIME!!!

The total credit card and other unsecured debts was now so high that we knew we couldn't keep up.

It looked like BANKRUPTCY was our only option until we learned about DEBT SETTLEMENT.

We weighed our options and decided to give Debt Settlement a try and use Bankruptcy as our last resort!

At first, we tried to contact the debt collectors ourselves, but soon learned that they did not care about our situation and were unsympathetic and rude!

Even though they were willing to discount the total amount due, they wanted it all in lump sum by the end of the month!

Right.... We can't keep up with our payment now and yet we have two or three thousand dollars laying around to send them!

We realized that since we were dealing with professional debt collectors we should consider retaining a professional debt settlement company.

CHOOSING THE RIGHT DEBT SETTLEMENT COMPANY

We did the normal "searches" online and soon found out that there were a lot of debt settlement companies out there!

Since they all seemed to offer the same services, we decided to narrow the field by using the following checks....

• Their Better Business Bureau record
• Registration with our proper government divisions
• Examples of actual settlements for their clients
• Positive testimonials from satisfied clients

It was very evident that not debt settlement companies were the same!

They ranged from being very pushy, trying to rush us to make a decision, to those who seemed to have very inexperienced reps who obviously had not much experience with our problems.

We finally found a company that seemed to not only really know what they were doing, passed the criteria we mentioned above, but demonstrated empathy for us and our situation.

THE PROCESS

Once we enrolled, the first thing they did was to put a stop to those annoying and basically harassing calls from the collectors!

Even though one or two collectors still tried to call, our company contacted them and those calls stopped immediately.  It felt so good to not have to deal with those debt collectors any more!

As time went by, the monthly deposits we made to our reserve account began to grow.  At the same time, the debt settlement company was negotiating our accounts.

One by one, they accepted a settlement agreements that averaged around 50% or less that the current balance.

THE RESULTS

The total debt settlement program took a little over 3 years, but it was worth it.

Through the debt settlement program we accomplished our goals:

• We were able to stop worrying so much about our debts
• We did not have to file for bankruptcy
• We avoided wage garnishments or a levy on our bank account
• Our credit scores are starting to increase

As I said before, debt settlement is not for everyone, but for us, it worked better than we expected and now we are DEBT FREE!

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