If you have stopped paying the minimum payments on a credit card, it may have been turned over to a debt collector to collect on the debt. If the debt is not satisfied once the account has been turned over to collection, many debt collectors will begin to collect the balance and outstanding fees by suing the debtor in court to obtain a judgment. The judgment gives the creditor the ability to confiscate the debtor's personal funds. There are steps to take once this process is initiated. Working with the debt collector to pay back the debt is essential at any stage of the debt recovery process.
Step 1
Seek legal counsel. Hire a bankruptcy attorney that specializes in debt collection or bank garnishment. If you cannot afford a lawyer, locate a legal aid office in your area. Present the original credit card bill and the judgment to your attorney. She will look for the validity in the judgment and make sure the numbers are accurate. Legal counsel will work directly with the debt collector to help set up an appropriate repayment program for you to pay off the judgment.
Step 2
Follow the directions on your summons. This is the first step the creditor takes to obtain the judgment. Most summons expire in 21 days. If you do not respond by contacting the court at the number provided within the designated time frame, a judgment will be automatically entered against you. A judgment awarded by the court for the creditor gives them the legal right to collect the debt by garnishing wages, repossessing property and levying your bank account by freezing funds. At the court hearing, explain to the judge why you stopped making payments. Ask the judge for a reasonable payment arrangement to be awarded on your behalf.
Step 3
Communicate openly with the debt collector after the judgment has been issued. Debt collectors can be intimidating, but their only goal is to retrieve the money for their client. If you are unable to pay the entire amount of the judgment, ask them about making biweekly installments on the balance. At this point, your credit has already been affected negatively, so don't bury yourself financially by trying to make large payments. Ask the debt collector to work around your paycheck schedule, and make sure you do not miss a payment.
Step 4
Refrain from choosing not to make the minimum payment agreement. If your financial situation has changed since the court hearing, tell the creditor. You can both reevaluate an affordable or deferred payment option. Most debt collectors won't refuse a regular payment. Be direct and polite. Be prepared to explain to them why you failed to meet the payment arrangement, such as a loss of job or loss of household income.
Step 5
Inquire about a settlement plan with your debt collector. If you have some cash saved up, but it isn't the full amount of the delinquent account balance, see if the original credit card company will settle for a lesser amount. Some credit card companies will settle for anywhere between 40 percent and 70 percent of the original balance.
Step 6
Prepare yourself for wage garnishment and bank levies. If you fail to make payments on your judgment or lose communication with the debt collector, they may enforce a writ of garnishment against you. At this point, you will have to speak with the debt collector about repayment options to have them lift the garnishment or the bank levy. They may consider lifting it if you provide a substantial amount of money down on the loan balance.
Tips and Warnings
- Debt collectors will charge additional fees, such as court filing fees, interest and process server fees. These may have to be paid at the court hearing, but you can request leniency from the judge if you are financially unable to pay them.
Things You'll Need
- Copy of original debt
- Receipts of all money paid on the account
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