If you have trouble paying your debt or simply want to save money on the balances, you DO have options, and you do not have to declare bankruptcy. Do not rush into what you think is the best solution without speaking to an experienced debtor attorney.
Waiting for the creditor to take action has some advantages. You have probably already received phone calls, letters, threats or settlement offers that are unacceptable to you. The next step is for the creditor to file suit against you. A lawsuit is not criminal, but civil. Debtor's prison was eliminated more than 150 years ago
Depending on the amount owed, the creditor may file suit in Magisterial District Justice (commonly known as small claims court), or in the Court of Common Pleas. If the court issues a judgment against you, your bank accounts may be attached, or your personal belongings and vehicles may be sold.
Responses
It is always best to contact an attorney immediately upon being sued so that a timely response can be filed. You can challenge the creditor's standing to sue you. For example, if the creditor is an entity you never heard of, you have every right to challenge their claim that you owe them anything. At a minimum, a defense will afford you the time to pursue other options. Those include settlement with that particular creditor or, if you have the means and desire to do so, sell assets at your convenience and on your terms.
Negotiation
When bankruptcy is not an option either because you choose not to file or it is not recommended, negotiation may be the only option. But there is no need to do that until a creditor is close to obtaining, or has obtained, a judgment. They cannot take a penny out of your pocket until they obtain a judgment.
Of course, if you have the ability to settle with some or all of your creditors, and desire to do so, negotiation can be started right away.
The main disadvantage is that you will have to pay taxes on the amount of debt forgiven. The creditor will send you a 1099 form showing the amount they forgave by settling for less.
Call for a Free Initial Consultation
We would be happy to elaborate on your options. You can reach our Collegeville, Pennsylvania, office by toll free phone at 888-773-6714 or E-mail Nahrgang & Associates, P.C. We will respond promptly to all phone calls and e-mails, usually within 24 hours. Lawyer Matt Nahrgang enjoys a high percentage of return clients and referrals from former clients, local law firms and accountants.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
