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Ask Brent Blanchard Your Own Question
Brent Blanchard
Brent Blanchard, Bankruptcy Attorney
Category: Bankruptcy Law
Satisfied Customers: 1975
Experience:  Twelve years experience in all aspects of debtor & creditor BK.
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I have received a SUMMONS AND COMPLAINT form from a creditor

Customer Question

I have received a SUMMONS AND COMPLAINT form from a creditor of mine. I do owe them the money. The credit limit on the credit was 7k, they are sueing for $9783 plus legal fees. I have 21 cdays to respond to the summons. What are my options? Worth noteing, I have made an attempt to pay them in payments, up to 3k at one time and they rejected my offer because it was not full payment. Can someone please help me with expert advise?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Brent Blanchard replied 8 years ago.
In general and IME, creditors are willing to settle quickly if the debtor offers as little as half of what's owed, or sometimes as much as 80% of the balance, if it is paid in one lump-sum payment within 30 day.

Installment plans generally get approved for settlement either with a $2K+ "down payment" and monthly payments of at least what was called for under the contract.

In any installment plan, a shrewd creditor will "secure" the new agreement with a "confession of judgment", which authorizes filing the paperwork with the appropriate court about 30 seconds after the debtor misses a payment. This is harsh, because execution or wage garnishment can start within a few days or weeks after that!

With a summons and complaint being served, there is now an attorney involved, who will want to be paid. That's where the "down payment" comes in and is also often a source of at least $1K being added to the debt.

Money talks loudest in these situations. If they won't take an offer of $4,750 "down" and some payments for anything more they want to collect (start with the offer of half, no questions asked, within two weeks if you really can do it, then see how much *more* they would want after getting that much money), then you might want to consider bankruptcy to just get the debt discharged.

The most important thing is to avoid getting a judgment entered against you. That opens the door to wage garnishment, or attachment of any bank account(s)k, or seizure and sale of any non-exempt property. For most people, those collection actions spell financial disaster.

Get any agreements, including for an "extension of time" to answer the complaint, IN WRITING. E-mail counts, but the writing has to be from THEM.

Thank you.

Brent Blanchard and 3 other Bankruptcy Law Specialists are ready to help you
Customer: replied 8 years ago.
So, I shpuld contact the origional creditor with an offer to settel the claim? What about answering the papers I was served?
Expert:  Brent Blanchard replied 8 years ago.
Contact the creditor first, have the case number XXXXX from the complaint in your hands, and don't be surprised if they say to call their attorney.

Since the CLIENT decides whether to accept any settlement offer, it's sometimes beneficial to bypass the opposing attorney (attorneys cannot do that, but the parties in litigation can).

Whether you wind up talking to the legal department or the accountant or the CEO or the attorney, make your best offer.

Thank you.


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