Consumer Law

Is It Ever Worthwhile To Explain The Reasons For Non-Payment To A Creditor?

Providing Reasons To Creditors

That would be fine. What I frequently deal with is people who went to court unrepresented or got a bad result in court or not even a bad result but got a result that went against them. They’ll have a judgment and the creditor will now be in a position where it is entitled to enforce payment. I’ll have people call me who have recently had their bank account garnished, for example. I have found that, particularly regarding bank account garnishments. If it’s the first-time that’s happened to an individual, there are steps that they can take to obtain relief from that garnishment proceeding. I found that if that remedy is available to them and it’s available to most of the people who contact this office, I find that that’s an excellent opportunity to get on the phone with their creditor, explain why there hasn’t been any progress made on the satisfaction of that judgment, obtain a release of the garnishment and get some kind of reasonable payment plan worked out.

Usually that involves convincing the creditor that they are better off trying to work with you than enforce payment. Now, the difference between doing that after legal proceedings have been instituted and trying to do it on your own with a creditor is once legal proceedings have been instituted whether you’re in the beginning of the process, which certainly is the best time to get a lawyer, or whether you’re closer to the conclusion of the process as when property’s been garnished, the person on the other end of the problem is going to be a lawyer handling the case for the commercial creditor. Certainly, if you have a lawyer, you’re going to be able to communicate directly with the lawyer for the commercial creditors.

Sometimes I have clients who come in who have tried to work it out on their own and who complain that when they call the lawyer’s office, they don’t get to talk to a lawyer; they get to talk to an agent or a paralegal on the phone. This is the same thing as when you’re trying to deal with a creditor directly, you don’t necessarily know who you’re talking to and what authority they have to resolve your problem. So, you may pick up the phone and feel like you can only afford to pay 50 or 100 dollars a month on this debt and your goal is not to avoid the debt but to get it paid off, but to do it in a way that you can afford, you may not be talking to someone who has the authority to entertain what you’re proposing. They’re just going to try to get a payment without making any kind of commitment to you in terms of what’s going to happen after that initial payment is received.

Once the legal process is instituted, the commercial creditor is required to be represented by an attorney. As an individual, you’re not. But if you have an attorney, then you have the two attorneys talking to one another, each having authority to resolve a case on behalf of their client. So, you’re able to get a more direct line into what can be done and what will be done to get the problem resolved. A lot of times, when you’re trying on your own, it’s not necessarily a bad idea to contact a creditor and resolve financial problems on your own before they become more troublesome. The difficulty that I find that people have with doing that is getting somebody on the phone on the other end that has the authority to resolve the issues because if you are dealing with a giant creditor, they’ve got lots of agents and employees and people that have the real authority for their creditor, but are not the folks that are answering the phone.

Often, the folks that are answering the phone have one mission, and that is to collect the debt. I’ve found very little authority to enter into agreements to resolve the debt. A lot of times, that is the difficulty with trying to get someone on the phone and make some type of long-term process. So, I would say the folks that have, for instance, a lot of credit card debt, if you want to cut it off before you start getting sued, go to a reputable debt settlement company. Now, if you look at the federal trade commission, there are a lot of complaints and issues with some, not all, debt settlement companies. You have to be careful who you’re dealing with but the advantage of a debt settlement company is if you have a significant number of debts, they have the ability to get into contact with people that have authority with the commercial creditors to strike a deal on your behalf, which usually is a reduction in the interest that you’re paying on your debt.

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