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  1. #1
    Join Date
    Jun 2010

    Default Should I Settle a Debt Collections Lawsuit Against Me

    My question involves collection proceedings in the State of: New York.

    I have been sued by a collections agency (debt buyer) for a 5 year old credit card debt (the statute of limitations in NY is 6 yrs). I answered the summons and a court date is set in NYC Civil Court. Subsequently, the collections agency has contacted me, asking me to contact them to attempt to settle out of court. I am not sure of the best way to negotiate this...

    I've been unemployed for a year. I have no money, no assets, no investments, NOTHING. I'm delinquent on student loans and 2009 taxes, both of which I'm in the process of trying to work out reasonable/affordable payment plans for. I don't have money to pay this credit card debt; however, I'm concerned that if I go to court, I'll automatically get a judgment against me because I really have no other defense other than laches. I might be able to borrow SOME money to pay a portion of this debt, but not all, and I'm trying to avoid having my bank account frozen/future wages garnished given that I'm on the verge of that happening due to my other secured debts.

    All that taken into account, would I be more likely to get the collections agency to settle with me for a lesser amount if I'm up front about my lack of assets/other debts? Or would that hurt me more because they'd figure if they went to court, they'd get a judgment which would allow them to collect the full amount eventually (they have 10 yrs to collect a judgment in NY)?

    Any advice would be helpful.


  2. #2
    Join Date
    Sep 2005
    Behind a Desk

    Default Re: Should I Settle a Debt Collections Lawsuit Against Me

    I can't speak for what a particular creditor will do. Contact them, try to negotiate, and see what happens.

    If most of your debts aren't dischargeable it may not be of much benefit, but if you have a lot of outstanding debts that are dischargeable (such as the credit card debt) consider consulting a bankruptcy lawyer.

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