Exemptions & Collections in Debt Judgments

You may consider yourself unique, one-of-a-kind, invaluable—your credit card company may consider you an asset waiting to happen. So your credit card company sued you in small claims court.  A debt judgment is just a piece of paper; they may as well print it on two-ply for all it is good for if you have no money.  If there is nothing for them to collect from you, then there is nothing for them to collect.  Either you are collectible or you are not, EXCEPT the creditor is going to watch your accounts for the next 20 YEARS.  You may not always be broke. So you filled out your Fact Information Sheet—how much money you do NOT make, how many cars you do NOT own, and the Renoir you do NOT have in your basement. The creditor will go after cash first.  They do not have to liquidate cash—it is liquid.  If you have no cash, then they will look at other assets.  If you have no other assets, then they will wait, and they will wait and wait, and watch your bank account to see if anything changes. The difference between exemptions and collections is about twenty years.  You only have a […] Read More

What You Have to Lose in Debt Judment

Just because you have no money in the bank right now does not necessarily mean you are going to be broke for the next 20 years.  What if you win the lottery or inherit money or get a good-paying job?  Your gain can quickly become a loss if there is a debt judgment against you. A debt judgment is a lien against you good for 20 years.  Debt buyers file in small claims court to get judgments, judgments they do not expect to receive right away.  The debt buyer is going to watch your credit and wait.  You may not be able to pay him now, but he will hold onto that judgment…. If your credit score goes up, that debt collector reappears.  With a judgment, he can get your car, real estate property (except your homestead), garnish your wages and/or seize your bank account unless you claim exemptions. So you cannot pay the debt now, how can you avoid a debt judgment? There are no guarantees; however, there are certain incomes which are exempt from debt judgment.  The key to an exemption is that you have to claim it.  Just because you are eligible does not mean you automatically […] Read More

‘What?’ Another Good Question in Small Claims Court

‘What?’ is a good question for a debt you have already paid off, or is too old to collect, or has been discharged in a bankruptcy.  (It is a great question if you do not owe anybody anything!)  Even if you owe money, you know you owe money, and you receive a small claims lawsuit, ‘What?’ may still be a good question to bring to the pretrial hearing so you can ask about the amount. Asking questions about the debt you owe is not a denial of that debt, and the place to ask is in the pretrial hearing.  If you have a question or disagreement about the amount demanded in a small claims lawsuit, the pretrial hearing is where you let the court know of your uncertainty. Make sure the amount demanded in the lawsuit adds up to your expectations…and does not exceed them!  Reasons to question the amount might include:  What if the company suing me included charges I do not owe?  …Charged the wrong interest rate?  …Included charges for products I did not request? If you feel that the debt is too old to be collected on or that the debt has already been discharged in a […] Read More

Who? – A Good Question in Small Claims Court

‘Who?’ can be a bigger question than it should be in Small Claims Court.  Debt buyers purchase debt from credit card companies for pennies on the dollar, then try to collect the full amount.  With such large growth in the debt collection industry of recent years, often the paper is not in order.  A debt buyer may sue you in Small Claims Court faster than they have the authority to do so.  This is especially troubling if the company that actually owns the debt comes along later and sues you for the same amount. In order to get a debt judgment against you, the Plaintiff should be able to prove they own the debt, you are responsible for the debt (your promise to pay in writing), and the exact amount you owe.  The plaintiff must use proper legal proof, as through business records—not the hearsay of an affidavit they sign that says you owe. If you are not familiar with the name of the company suing you, “Who?” is a good question to ask to make sure they have proper authority over the debt to bring the lawsuit. For other good questions and answers in Small Claims Court, go to […] Read More

‘Testiliars’ in Small Claims Court

Great Britain hosts a competition every year to crown the World’s Biggest Liar.  The winner has to fabricate the biggest fib and make it convincing.  We have the same thing in this country in Small Claims Court. Small Claims Court deals with matters of $5,000 or less, usually in credit card debts.  The problem is the credit card company often sues faster than they put the case together.  The credit card company will send a ‘testiliar.’  Those can be fun to mess with because they appear by phone ready to negotiate a repayment plan–they are NOT prepared to answer questions about the debt, like verification of the amount or terms.  They are unprepared to deal with a legal defense from the debtor (and they may not have a legitimate case). Even in a Small Claims case, a little legal advice could make a big difference.  You may have defenses available and / or you may be eligible for exemptions from a debt judgment.  Seek competent legal counsel before you write checks to somebody who has been racing snails with Prince Charles.  Read More

Body Attachment to Debt Can Land You in Jail

There is no such thing as Debtors’ Prison in the US, but there is such a thing as Contempt of Court, which can result in a Writ of Attachment and Arrest. After a debt judgment, a Fact Information Sheet comes standard in Florida and must be given to a Creditor on request.  If you fail to submit your Fact Information Sheet, you can turn a civil matter into time behind bars.  It is difficult to earn a living so you can pay bills when you are not free to go to work. The State of Missouri is under scrutiny for debt collection practices which include “Body Attachment” if a debtor is a no-show for court.  The criticism is especially strong when judges set bonds at the amount owned in the debt, then turn that amount over to the creditors, thus using tax-paid police and court personnel to collect private debt. Debt is supposed to be non-fattening, but it can really stick with you and be hard to work off your credit report.  Seek competent legal counsel to examine your options if you are facing judgment… the consequences can be arresting! Read More