Summons for credit card debt

[davlizM]

Dear Socrateaser,

My wife suggested reaching out to you for legal advice. If you can respond to questions regarding a summons for credit card debt, please read on. If this is not your area of expertise, please delete this post.

For starters, I am currently disputing a arrears-only child support case. Juvenile Court (in another state) claims over $28,000 is owed - my records indicate a little over $10,000.

With that looming, I also have to deal with the following:

facts --
a) reside in Colorado
b) plaintiff: Capital One Bank
c) original balance - $500.00  (as of 01/01/2005)
d) amount claimed - $835.35*
    *this includes interest, costs, attorney fees
e) account shows as a bad debt write-off on credit report
f) received summons to appear in county court on 05/18/2006
g) received an answer form - used if we do not agree with complaint
h) I was unemployed and unable to pay on this debt until early in 2006, but with all the interest and late fees - a friend suggested ignoring the collection agency and they would write it off.

questions --
1) What can the courts do with this case?
2) If I fail to answer or appear on the court date, the summons suggests "the court may enter a default judgment for the relief requested". Does that mean the full $835.35?
3) Is this a tactic used by collection agencies to force payment?
4) The amount they claim I owe is already ridiculously high with the interest and late fees added - will they also be able to add further legal costs to the balance?
5) Do the courts have other avenues to force payment (i.e. garnishment of paycheck, etc.)?
6) Should I appear in court to dispute this amount?
7) Should I contact the lawyer and try to make arrangements?
8) Should I ignore this as I have ignored the collection agency calls?

Thanks for any advice you can provide.

[socrateaser]

>questions --
>1) What can the courts do with this case?

The court can give judgment for the creditor, and then the creditor can try to collect from you via garnishment of your pay or sale of your assets.


>2) If I fail to answer or appear on the court date, the
>summons suggests "the court may enter a default judgment for
>the relief requested". Does that mean the full $835.35?

Yes.

>3) Is this a tactic used by collection agencies to force
>payment?

It's not a tactic. Usually a creditor will not attempt to collect as long as the debtor disputes the amount of the debt. Evidently, you did not dispute the debt as to amount, therefore the case is pretty simple. You charged goods and services in accordance with the credit card agreement, you didn't pay, you owe. Period.

>4) The amount they claim I owe is already ridiculously high
>with the interest and late fees added - will they also be able
>to add further legal costs to the balance?

Small claims usually has a statutory legal fee. Probably less than $100, but it's different in every State.

>5) Do the courts have other avenues to force payment (i.e.
>garnishment of paycheck, etc.)?

Already answered above.

>6) Should I appear in court to dispute this amount?

If you have evidence that the amount is incorrect, then yes.

>7) Should I contact the lawyer and try to make arrangements?

See below.

>8) Should I ignore this as I have ignored the collection
>agency calls?

Here's the deal. If you have no equity in your home or car, and nothing in any bank or investment accout that the collection agency can seize to force payment, and you are already being garnished at work in an amount greater than 25% of your after tax income, then the agency cannot collect against you, even if it gets a judgment.

If you have some of those assets available, then the agency should be able to find them and collect.

What I usually do, if the debtor wants to save his credit record or he has assets, is to try to get the agency to settle for a lesser amount, and/or to agree that the payment is not for the debt, but rather it is consideration for a release of your obligation in exchange for the agencies agreement that it and the credit card issuer will remove the negative entries on all of your credit reports. In order to do this, you must get a signature from both the collection agency and the credit card issuer.

This is not impossible, but it's not easy. If you succeed, your credit report will be cleaned of this issue, so if that matters to you, then it's worth it to do this.

Otherwise, the only option is to declare personal bankruptcy, which is not usually worth it for $900, and you can't use bankruptcy to avoid a child support arrears, so that doesn't make it any more worth doing.

If I were you I'd try to get the release, unless you can tell me why the debt is incorrect in amount or that you don't really owe the money.