Ask a Lawyer

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By The Staff

G.A. of Williston asks: I lost my job and got behind on my payments. Now I’ve been sued over a credit card debt and I can’t pay it. What should I do?

G.A., since almost 10 percent of the country is out of work at the present time, you are not alone. There are millions of people in the same predicament you are. Until you find a job and have a source of income, it’s likely that you can’t make any payments until you do. Here’s the best advice I can give you:

The first thing you need to know is that by filing suit the creditor has decided that it wants to get a judgment against you, which will include the costs of filing suit, and attorneys fees, most likely, in addition to the principal amount due and owing, plus late fees, over-the-limit charges and all the rest. Sometimes creditors will delay filing suit against debtors because the interest rate they are getting, which can be as high as 28 percent or more on the credit card agreement is MUCH higher than the interest allowed on a judgment. In Florida, per Statute 55.03, the rate is 8 percent for this year, 2009.

If you don’t show up in Court on the designated day, the Judge will undoubtedly enter a judgment against you for the full amount of money demanded. Once a judgment is entered, the creditor will then seek to EXECUTE on its judgment, which means it will look to see what assets you have and make a determination as to what assets they can get. You will be required to fill out a fact information sheet and tell the creditor what assets you have. Creditors sometimes take depositions of debtors to aid them in their efforts to satisfy their judgments.

Now, if you do show up in Court, the judge will ask you if you admit to owing the money or not. If you say you don’t think you owe ALL of the money demanded, he or she will send you to meet with the creditor and a mediator to try to come to an agreement regarding what is owed. If you have some money, you can enter into a new payment plan, at the reduced rate of interest, and avoid a judgment. If you have enough money, you can sometimes negotiate a full settlement for much less than the amount demanded as creditors are happy to get cash instead of a promise to pay in the future. If you can’t reach agreement, the Judge will set the case for trial for a later date, maybe a month or so later, thereby giving you an additional month to find work and a source of income so that you can enter into some kind of agreement.

In my next column, which will come out in August, I’ll tell you about what creditors can get and what they can’t get, but for now, G.A., my advice is that you should show up in court and do what you can to avoid having a judgment entered against you. If you have enough money, the services of an attorney can help to negotiate a favorable settlement, but if you had the money, you’d pay the debt, right? While money is said to be the root of all evil, it is also the cure for many problems, especially the ones you are having. There is no easy answer to your question, G.A., but I hope I have helped you some.

Any readers with specific legal questions for this “Ask a Lawyer” column are invited to submit those questions to the editor of this newspaper, who will pass it along to the attorney. If you need assistance with probating a will or probating an estate where there is no will, and you cannot afford an attorney, you can call the closest Legal Services office, which provides free legal assistance to qualified individuals, or call the Florida Bar Referral service at 1-800-342-8011. I wish you good luck in obtaining access to our legal system, no matter what your income and asset level might be.

The foregoing was written by attorney Pierce Kelley, who is a member of the Florida Bar Association. The contents reflect his personal opinions and beliefs.