Debt collection and judgements

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Debt collection and judgements
In the field of debt collection and delinquencies, judgments and judgement risk factors are a very real concerns. These concerns include thinking about: Will a creditor sue and seek legal judgement against me? What type of judgement will it be? Is there anything I can do about it?

Debt collectors must abide by the their state's Statute of Limitations (SOL) for the amount of time to sue a debtor for payments. This means a consumer's first step is determine if the SOL for collecting a debt is over.

If the SOL has not passed, you as the consumer must weigh the risk factor of a judgement when determining if you should pay a delinquent debt. A judgement could allow the creditor to garnish wages or hire an authority to come get your property. However, sometimes it is simply too much time and expense for a creditor to take action against you.

As stated at Credit Info Center: "The risks of judgments, garnishments, and property seizures must be properly balanced against the likelihood that such drastic collection measures will ever happen. The risk, and the decision to take that risk, are entirely yours if you're in such a position."

DEFINITIONS

* JUDGEMENT - a decision issued by a court at the end of a lawsuit. If in the favor of the creditor it not only verifies the debt but can increase the debt by adding interest, court costs, collection fees, and attorney fees an may extend up to 20 years on a credit file. A decision in favor of the debtor makes the debt uncollectible and may include reimbursement of legal costs to the debtor.

* JUDGEMENT PROOF - a debtor has little or no property that a creditor can legally take to collect in the foreseeable future.

* PRE-JUDGEMENT ATTACHMENT - a legal procedure which lets an unsecured creditor tie up property before obtaining a court judgement.

* DEFAULT JUDGEMENT - If a consumer is sued and does not file papers in response to the lawsuit in the prescribed time limit, the plaintiff can ask the court to enter a judgement against the debtor and is an automatic loss of the case. A default judgement can be set aside but this is unusual and circumstances must be notable to justify such a turn.

* LIEN - a lien is a notice that a creditor has attached property. The consumer cannot sell the property without paying off the creditor because the lien makes the "title" cloudy.

* SECURED DEBT Property that is purchased using the property itself as collateral on the loan is considered secured. Credit cards are considered unsecured but tax debt is considered secured.

Creditors from secured debts may be able to obtain a judgement for repossessions. Mortgagors can depose and landlords can evict. Garnishment or taking of wages is an option of any creditor. The decision to sue a debtor is based on the amount owed, the cost of getting it back, and whether there is a reasonable expectation that something can be collected.

If the matter can be resolved with the person making the claim before it goes to court, it will be cheaper. If you lose in court, you will likely have to pay the other side's legal costs. If you agree that you owe the money but don't agree on the amount, you can try to negotiate the matter before it goes to court. Should you reach an agreement, you will need to submit an agreement as to judgement form in the court, which tells the court that there is no need to have the matter heard.

Some judgments can be fought by challenging their validity. Default judgments at times can be reversed by claiming the debtor was never served or was ignorant of the facts. Before reversal, however, you must back up the claim with facts.

Once a judgement has been issued, settlement may still be an option if the debtor and creditor can come to terms. Often this happens when dealing with a temporary judgement-proof debtor who will have assets freeing in the future. The creditor wants the debt cleared sooner and might be willing to settle, rather than waiting until the assets are free.

Contrary to popular belief, a judgement can be removed from a credit file. This only occurs when the debt has been paid in full, the creditor and borrower have reached an agreement.

Roger Sorensen

America's Financial Guide can be found at ==>http://www.Slave2Work.com Subscribe to Money Basics via http://www.slave2work.com/ezine.html

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Steps to Financial Stability

Nobody likes to think about losing a loved one, and often when it occurs, we have no idea where to turn.

If you are not prepared, the paperwork will hit you after your spouse's death in an apparently overhwelming deluge. It is tough to get through it even when you are prepared. A to-do list is prepared for you here.

1. Get a grip on your assets. Find out what you have to work with by gathering copies of your joint tax records for the past five years, records of both your husband's and your own retirement plans, all insurance policies, bank and brokerage accounts, and the deed to your house and any other property the two of you might own, jointly or seperately. Bundle the documents in one big file that you keep in a safe but accessible place, such as a locked drawer.

2. Obtain death certificates. You'll have to send nearly two dozen copies of your husband's death certificate to credit card companies, the company that holds the mortgage on your home, insurers and various other companies and agengies to verify his death. At this time, they are not requiring the copies be certified by the state.

3. File for benefits. Notify your husband's employer and file for any benefits owed you, such as pension income, life insurance and health insurance coverage. Do this by talking to the person in charge of employee benefits (ask the human resource department to direct you). Find out about settlement options - does the plan want you to choose between a lump-sum payment or annuitized payments, which are made every year.

4. File insurance claims. Alert your husband's life insurance company and file a claim. Your insurance agent will have all the policy information you will need and will be able to help you obtain the necessary forms.

5. Notify government offices. The Social Security Administration will need to be notified. You must have been married a minimum of nine months before your spouse's death to be eligible for benefits, except in the case of death resulting from accident or military service. Don't forget to contact the motor vehicles bureau in your state to change all vehicle registrations to your name.

6. Contact financial services providers. Any joint accounts should be transferred to an account in your name only. (You will need to use one of those death certificate copies for this.) In many instances, you will be able to renegotiate the terms of outstanding loans with your banker if your financial status is shaky. If your husband had a brokerage account, ask his broker to give you a value on his account at the time of his death. Estate taxes will be based on the evaluation of assets in all his accounts.

7. Update your insurance policies. If your spouse worked for a company that has a health plan covering 20 or more employees, the law requires the plan to offer you and any dependents coverage for at least 18 months but can be stretched up o three years if you have dependent children. Also update any life or disability insurance policies.

8. Put your money someplace safe. Do not even think about making any major financial decisions at this time. It is recommend that you refrain from investing any lump-sum insurance or pension payout for at least six months, and if you can wait this long, a full year after your husband's death. Stash cash into liquid money market funds, or short-term certificates of deposit or Treasury bills.

9. Work out a spending plan. You have already assembled the important documents. Now you need to allocate your new income to satisfy your needs as well as investing your money for retirement, for your children's education, and so forth. Subtract what you owe on your mortgage, credit cards and outstanding loans as well as any tax obligations from your total assets. How much income do you have? How much do you spend each month? Determine which bills must be paid and which are optional. There's your spending priorities.

10.Take it slow. After you navigated the must-do list and found the crucial documents, take a break. Don't be pressured to make big financial decisions. When you are ready, it's a good idea to set up an appointment with a financial adviser to help you make wise decisions.

Roger Sorensen

America's Financial Guide can be found at ==>http://www.Slave2Work.com Subscribe to Money Basics via http://www.slave2work.com/ezine.html


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Debt collection and judgements
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