Being sued

[ferna1975]

What is the name of your state? Illinois

I just found a summons in my mail box this morning to appear in small claims court in a couple weeks. I am being sued by Sprint PCS for a principal balance of $2006 for an old cell phone bill.

Sprint claims that I have owed the above amount since 2001. I have recently moved and at no point did I ever receive any past due notice or any correspondence attempting to collect this debt.
If the collection agency would have successfully contacted me as the other agencies have, I may have been able to settle this debt before they resulted to a law suit.

At this point, I am not even sure that the debt is fully valid but am willing to settle the amount owed if I could work out some type of payment plan or reduced settlement amount.

I currently have past due debt from several other collection agencies. I have recently and successfully been able settle some of my past due debt and have been desperately trying to settle the other outstanding collection debts.

I would like to avoid a judgement on my credit file. Is there a chance if I show up to small claims court that I can settle this debt without a judgement appearing on my credit file? Can I avoid wage garnishment? Should I contact the collection agency/law firm that is sueing me on behalf of Sprint prior to my court appearance? What are my options? Please help.

Thank you.

 

[Ladynred]

If you go to court, you will likely be offered a settlement.. and you can take along your own offer for settlement and/or payment plan. Put it all in writing, get signatures and negotiate for deletion of the collection from your credit report.

If you do NOT go to court, they WILL get a default judgment, so definitely go. You can contact the lawyer suing you with the same WRITTEN settlement offer, don't do so on the phone, its unlikely you'll get anywhere.

 

[JETX]

"I have recently moved and at no point did I ever receive any past due notice or any correspondence attempting to collect this debt."
*** This is not a defense, since there is no obligation for them to contact you.

"At this point, I am not even sure that the debt is fully valid but am willing to settle the amount owed if I could work out some type of payment plan or reduced settlement amount."
*** You can certainly contact the creidtors attorney and see about negotiating some type of settlement with them. It is better to do this before the trial since you may be able to limit the included legal expenses. Also, as long as the debt is valid, they are under no obligation to accept any negotiations.

"I would like to avoid a judgement on my credit file."
*** I don't know why people keep saying this?? The fact of a judgment itself is not a negative. Lawsuits are filed and won all the time over clear disputes. As such, the creditors don't take a judgment as a negative. They do if it is an unpaid judgment.

"Is there a chance if I show up to small claims court that I can settle this debt without a judgement appearing on my credit file?"
*** Absolutely. In fact, if you settle it BEFORE trial, there is no judgment to be recorded.

"Can I avoid wage garnishment?"
*** That is entirely up to you. If you pay the debt/judgment, then there would be no need to garnish your wages.

"Should I contact the collection agency/law firm that is sueing me on behalf of Sprint prior to my court appearance?"
*** Whoa!! Is this a Collection Agency, or is it Sprint that has filed the lawsuit?? If it is a 3rd party agency, you can send them a letter asking them to validate the debt and put the brakes (temporarily) on this entire issue. If it is Sprint, then you can contact them or their attorney (but they might refer you to their attorney).

"What are my options?"
*** See above.

 

[ferna1975]

Thanks for the advice. I will take it.

 

[ferna1975]

One more thing...

I'm in Illinois and the summons contains a "notice to defendant" section at the bottom. This notice indicates that if I wish to contest the claim, I must do the following:
A) Pay a statutory fee
B) File a written notice to appear
C) Mail the plaintiff's atty a copy of my appearance
D) Be present in court prepared to proceed to trial and given date

It also reads that if I do not wish to contest the claim, I need not appear in court or file an appearance and a judgement will be entered against me, etc...

Do I have to follow this entire process if I simply intend to settle the account? Please advise. Thanks.

 

[JETX]

In order to protect your rights in the event that you are not able to resolve this, go ahead and complete the process of challenging the filing. Doing this will also let the plaintiff know that he/she will have a 'fight' if they don't settle.

 

[ferna1975]

Thanks JETX.

 

[kaj3d]

What should you take with you to small claims court when a judgement is in question ?
Can you just take your propsed payment?
Will I have to go straight to the judge or will me and the lawyer be able to come to a payment agreement without going before a judge? o.k. if so, if we do come to a written agreement....that's it......there will be no judgement at all?

 

[JETX]

What should you take with you to small claims court when a judgement is in question ?
Can you just take your propsed payment?
Will I have to go straight to the judge or will me and the lawyer be able to come to a payment agreement without going before a judge? o.k. if so, if we do come to a written agreement....that's it......there will be no judgement at all?

Please don't piggy-back your post on to someone elses thread. It diverts attention from the original poster and only leads to confusion. Start a new thread with your post (and delete your post here).

 

[ferna1975]

Okay. I have negotiated with the attorney and it looks like we have come to an agreement. However, the attorney mailed back a somewhat vague offer letter saying that he has recommended to his client the installment payments I proposed. It goes on further to mention that if default occurs that a judgement will be entered for the full amount. This letter is a bit vague. A few questions...
1). What specific elements should I see in the offer letter to best protect myself?
2). If we settle in writing before our court date, will I still have to appear in court?
3). Will the lawyer notify the court that matter has been settled or will I have to notify the court?
4). Is there some type of document I should see from the court indicating that this matter has been resolved and my presence is no longer required?
Thanks.

 

[wert]

Jetx
I would disagree with you about judgment not being a large negative on a credit report.
My report is pretty clean, all in the mid 600's to almost 700. I have been turned down for simple credit cause I have a paid judgment from a year ago. Only negative on my report, and they don't like it because of a judgment.

The do hurt, and hurt bad. It's not as bad as a late mortgage, but right under it.

 

[Ladynred]

This letter is a bit vague

Vagueness you do NOT want, but he may not be able to be specific until his client fully agrees to your proposal.

1). What specific elements should I see in the offer letter to best protect myself?

You want to check the AMOUNT - if you're settling for less than the full amount you want to be sure they are sticking to what you have proposed and, so far, agreed to.

Same goes for the payment amount.

Check on interest. Will what you've agreed to pay INCLUDE all intrest attached to the judgment ?

You want to make sure that they agree to DELETE the collection entry from your credit report. I hope you included in your negotiation that the account will show as either 'paid as agreed' or 'paid'. An entry of 'settled for less than full amount' is BAD, and you don't want it.

If settling for less than the full amount, you want a 1099-C "cancellation of debt income". It MAY have to be reported on your income tax, but if you can prove insolvency then you don't have to include it. The 1099-C will totally cancel the debt and should stop them from selling any remainder later.

2). If we settle in writing before our court date, will I still have to appear in court?

You should not, the lawyer should withdraw the suit. Make sure you get this in writing too.

3). Will the lawyer notify the court that matter has been settled or will I have to notify the court?

Since he filed the suit, he should notify the court, but keep tabs on it !

4). Is there some type of document I should see from the court indicating that this matter has been resolved and my presence is no longer required?

This I'm not 100% sure of, have to check your Rules of Civil Procedure for your state to see if there's any requirement.

 

[JETX]

Jetx
I would disagree with you about judgment not being a large negative on a credit report.
My report is pretty clean, all in the mid 600's to almost 700. I have been turned down for simple credit cause I have a paid judgment from a year ago. Only negative on my report, and they don't like it because of a judgment.

The do hurt, and hurt bad. It's not as bad as a late mortgage, but right under it.

Random response:
1) Gee, do you think the reason you might have a lower score could be in your statement, "My report is PRETTY clean" (emphasis added)?
2) You said that the judgment was the reason for the denial. How do you know that?? I doubt that a creditor told you that was the reason. And if they did, AND if the judgment was simply an honest dispute that required a court decision, the judgment would (usually) not be of harm.
3) Most creditors don't know whether the judgment was a result of an 'honest' disagreement of damages in an auto accident (for example), or a more serious dispute over unpaid rent. However, if it were something more 'harmful' (like the unpaid debt) AND if they knew the cause of action, they could negative your credit profile.
4) Some very strict creditors can use just about anything to justify their denial.
Summary: Generally, a judgment on a creditor profile will not impact your credit rating.

 

[wert]

For what it' worth, Jetx, the reason I know it's harmful to a credit report is when a person is turned down for credit, in most cases they give a reason. In my case, it has been too many inquiries in the past 12 months (which I have taken care of now), and the wording of either judgment, or public record judgment.
Pretty clean referred to a couple of lates, if you are concerned with that.
A judgment does make a difference in regular credit, and especially if you are after a mortage with a marginal score. That was paraphrased from a mortgage broker I know.

If a judgment, whether paid or not, was not a big deal, then so many people would not be trying to get them deleted. And on a lot of reports, the company or creditor that the judgment was obtained for IS listed.

I stick by what I said before, a late mortgage is the worst, but a judgment is not very far down the list.

Relax, we are all here for the same reason.

 

[JETX]

Wert, I can only say that, as a professional judgment enforcer (kind of sounds like 'Vito', doesn't it?), I have LOTS of experience with judgment reports on credit histories.... and removing them and their 'value'.

I can say, with absolute certainty, that a PAID judgment on its own has very little, if any, impact on an individuals overall credit score. If the judgment is NOT paid, or even if the judgment was a result of an unpaid valid debt, that could be a different result.

When I report judgments to CRA's (Credit Reporting Agencies), they record only the simple FACT that a judgment exists, the amount and the involved parties. They do not record anything about the underlying dispute or claim itself. Therefore, if the judgment creditor is shown to be "John Smith", or some other individual or non-commercial name, the judgment has no 'negative value'. However, if the judgment creditor shows to be a credit grantor (Example, bank, GMAC, property agent, credit union, etc.), the creditor (that you applied with) would very likely assume that the underlying claim was of a 'non-payment of debt' type. And THAT could affect the lenders decision to grant or deny.