So today I wake up to a knock on my door and it was some lady serving me court summons. About 3 years ago I just graduated high school and opened a few credit cards. I got up to 1000 in debt on one of the cards (idiot that I was with no job and in school) and I was late on a payment by a day and the interest rate skyrocketed to around 25% so I decided just not to pay.

I would ignore a few phones calls and ignored a few letters from the collection agency figuring they woudnt try to sue me for a pretty low amount (compared to others). I had pretty much forgotten about the debt until today. The amount they are suing me for is 1400(I guess the 400 was interest). My question is what would be the best option as I am unfamiliar with my legal options.

Would it be better to contact the agency and try to settle for a low amount since they most likely paid cents on the dollar for the debt. Or should I place an objection to the suit because I am not sure if the 1400 is the true amount I owe and hope they drop the suit. I live in California and im pretty sure the sol is four years. Any help would be appreciated

Thanks

I never understand people who don't feel obligated to pay their debts. Hope you don't want to buy a house anytime soon. If I was you I would scrape together $1400 from family/friends and beg the credit card company to not **** up my credit rating...but since its already gone to a collection agency I'm sure its too late for that now. Regardless, you should contact the credit card company directly and pay them in full asap. Then you should seriously ask yourself why it is you think people and society owe you something in life. (not meant as an insult)

Clearly you should take out another credit card with a $1400 limit, use that to pay off the collection agency, and then toss the new credit card in the garbage and forget about it.

Get legal advice from someone in your area.

You're a scumbag. Get a job and pay it off.

lol @ spending 1k you don't have and "deciding not to pay"

Yes I know this. This was four years where I didnt care about financial consequences or anything of that matter. I had completely forgot about that credit card until today.

Im just trying to see what my options are. Do I have to pay the full amount or else they wont drop the suit or can I set up a payment plan. Or do I have to go to civil court and wait for the judgement?

Pay it off with food stamps.

I'm not a lawyer, but yeah, that about sums up your options. You owe them money, it's up to the two of you to work out some sort of agreement. Since they hold all the cards, the agreement will probably end up not being particularly favorable to you.

If you have the $1400 available, it would probably be in your best bet to pay the whole thing off, though I'd recommend arguing them down to a lower amount. (e.g., "I'll give you $750 right now, and you drop the case and erase my debt from your record.")

Again, not a lawyer.

A similar thing happened to a friend of mine. I would contact the collection agency before the court date, and see what you can work out payment plan wise. If they won't/can't talk to you because of legal issues, show up for court and try to work out a plan then. You have to pay them, but probably not all at once. Also, as previous poster stated you have nothing to lose by trying to knock the amount down, so try that, too.

If you pay them in full make sure they report that you paid in full.

I was an idiot in college and took a couple of the credit card offers I was getting, then maxed them out and missed payments etc.

I eventually paid them off completely and cancelled the cards because I decided to just earn the money I was spending (probably paid nearly twice as much as I spent too because of late fees and interest rates).

Several years later I'm trying to build my credit, and I find out that one of the credit card companies reported me as settling the debt rather than paying in full.

Thanks for the opinions guys. Yeah maxing out the credit card and forgetting about it was very stupid on my part. Any of you have experience in working with companies that fix your credit?

Even better, negotiate a full payment in exchange for removal of the item from your credit report. This is called a "pay for delete". Marking "paid in full" is better than "settling" but still shows you went to collections which in and of itself is a bad thing.


Go to www.creditboards.com and ask there. Or better, just read everything you can there.

Don't feel guilty, remember when you opened your credit card all that happened was someone entered $1000 into a computer. No money moved hands or changed locations, it is just a number on a screen, backed by absolutely nothing. The banks have the audacity to charge 20% annual interest on money they create out of thin air.

Stick it to "the man", just default.

What kind of low-life lawyer do they have suing over a $1,400 debt? Most I know wouldn't look at a case less than 10k.

fancy,

"though I'd recommend arguing them down to a lower amount. (e.g., "I'll give you $750 right now, and you drop the case and erase my debt from your record.")"

Why do you recommend someone who charged $1,000 + interest to his card try and get them to accept $750? Do you simply not believe in paying your debts?

Is that your strategy at restaurants? Go in, order $50 worth of stuff, then tell them you'll give them $30 right now or they can sue you and try to collect? Of course it isn't, so why do you think that is appropriate with stuff you pay for with credit cards?

I wish I had known about that 10 years ago, this sounds like by far your best option OP.

So it is completely wiped off your credit reports or does it show up as paid in full?
Im thinking the reason for settling for a lower amount is because the collection agencies buy your debt for cents on the dollar and make a huge profit if you pay in full. Since you cant pay the original credit card company at all anymore, maybe that is why you can try to settle it down.

He's saying that you have an option to negotiate a full payment to get it completely wiped off your credit report.

I didn't even know that was an option, but it sounds like you should look into it if you have the money.

If you don't have the money, you should start making it.

Unfortunately it takes credit to live in this world. Even if you never borrow and only make what you spend it's going to be tough to do a lot of things you may want to do in the future. I had to deal with the no credit = bad credit scenario for a while, it's a huge pain in the ass.

I am really suprised at that also. I had a CC debt for 1100 that I didn't pay, and not only did the CC issuer charge off the debt, but then the collection agency who bought the debt turned around and forgave the entire amount as it was more cost effective to write off the loss than pursue me in court for 1100.

There is probably a good chance that OP is not being truthful about the size of the debt or maybe the debt is not CC, but like a personal use loan or debt to a payday loan lender.

I ran up the back of a car with no insurance. poor uni student, couldn't pay the 2.3k. they settled for 1.7k if i pay it back $5 a week. a year down, 6 more to go!

Because he asked for help, so I'm trying to maximize his outcome. I'm not saying that he's a shining hero or a moral paragon of virtue, I'm just giving him practical advice.

Besides, I strongly doubt that the collection agency paid $1400 to buy that debt. Why are you not upset with them trying to gain more money out of him than they paid for his debt?

Probably one that works as an employee of the debt collection agency and can pump out ten of these cases in an hour, using boilerplate documents.

A lot of court houses will have guys that just hang around all day representing these cases and local shops can rent out their services in six minute increments. The strange part of OPs story is that he was actually properly served. The normal MO of these collection agencies is to buy bad debt for five cents on the dollar, file suit, throw the summons in the dumpster and try to get a default judgement.

My guess is that he hasn't actually been served. We had unscrupulous collection agencies serving people with fake documents. The idea was simply to motivate them to pay. Fairly sure they got sanctioned for that but it is likely a pretty effective technique since people will freak out and then either pay or a minimal do something that acknowledges the debt. I hate to give advice to deadbeats but my first step would be to confirm with the court that this is actually real. Suing someone for such an insignificant amount of money is very uncommon.

Yeah I was surprised they were suing me for that amount. How would that work if the didnt properly give me the court summons and they get a default judgement. Does it turn into a their word vs my word in me actually receiving the summons?