Hello Again, I asked you a question on Wednesday, June 26, 2013 10:35 PM EST about debt settlement for a company that refused to settle. I kept trying but the "loss prevention dept" kept wanting me to send income and budget info. They finally charged off the debt last week ($5700). I sent a settlement offer for 40% this week, but I was sent a letter from the "recovery department" threatening to sue me if I don't pay 100% of the unsecured account. Here is part of my last settlement letter argument:" If ###takes me to civil court, it will incur legal costs that would likely exceed the loss from settling this ... ###'s risk profile would also increase. If ### XXXXX file a civil court case against me, then the legal fees will immediately double or triple. If the ### XXXXX a default judgment, then it can garnish my wages. My employer cannot fire me if all I have is a single wage garnishment, because that would violate federal law. This is provided I'm not laid off by (know local employer) in their staff reduction initiative. The civil court expenses would likely exceed the judgment amount, if you decide to sue me. Small claims court would allow you to recover no more than $3000, and although your cost is less than civil court it would still be more costly than settling with me. "
I do own a home but it's treading water right now with a 1st and 2nd mortgage. The creditor that I'm trying to settle with holds the second mortgage. I have a job. I did not pay the co-signed student loan payments and they are 4 months past due. (neither did my daughter) I was trying to pull the money together to pay this creditor a settlement. I did pay all my other debts, mortgages, and car payments so they are current.
You mentioned before that I may be better off settling with them in court if they sue me. How would that work? Would it be worth it for the $5700? I don't have the whole 40% now because I used part of it to pay some bills. I would let a couple lapse for a month or so to get this account settled.
How should I respond to the "recovery dept" now that it's charged off? If they are still trying to collect the debt, is it really charged off?