What are my options if an old creditor just filed suit against me?
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What are my options if an old creditor just filed suit against me?
I have an old furniture debt that I am not being sued for roughly $10K or more on a bedroom set that was originally purchased for $3999. It was a revolving credit line and I defaulted over 3 1/2 years ago. I lost my job; I am concerned that they will now garnish my wages and take money that I don’t have which will put me a terrible place financially. I have spoken to lawyers about defending the me in the suit but paying an additional $2500 on top of what it appears they will get in court doesn’t seem logical. I would like to be able to settle the debt at a discount and pay on them directly.
Asked on November 25, 2011 under Bankruptcy Law, Arizona
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you owe the debt that you are being sued upon and the statute of limitations have not run concerning the causes of action plead against you, you should try and settle with the creditor under a written agreement for a set amount where you would be able to make monthly installments to pay down the debt in an amount that you can afford. That way you will not need to worry about a wage garnishment or a bank levy.
You need to be aware that debts and judgments typically accrue interest at the rate of 10% per annum. You should have a general civil attorney review any written settlement agreement before you sign it.
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