Legal Question in Credit and Debt Law in Georgia
My husband was served with papers that he is being sued over a 1200 balance on a motorcycle loan. Original loan was 6000. It was stolen and totaled. Insurance paid 4800 leaving a balance of 1200. Bank refused to settle for a lesser amount and the loan is not due for another 2 or 3 years. They refused to take the 1200 and refinance those payments for the remainder of the loan to lessen the payments and burden on us, due to the unfortunate situation that we are now in. The never turned it over to collections either because we were going to try to settle for a lesser amount or smaller payments with the collections agency. We have good credit and always pay our bills and are making regular payments on 3 medical bills that we can show to a judge. We have never dealt with this before. Do you think any of this will matter to the judge? Does my husband have a chance with the judge lessening the debt since we tried and tried to work with them and they refused. I have emails showing we tried to work something out and they were not willing to. That bank has millions and we have hundreds. I'd hope that the judge would acknowledge that we were not trying to get out of paying this were just trying to do what was fair. A 50/50 split with the bank since it was not our fault that someone stole our property and totaled it out and we are unable to pay.
How likely is it that the judge will reduce the debt?
Thank you so much for your advice!
Heather
2 Answers from Attorneys
The Judge is not going to reduce the debt, and your circumstances have no legal effect on whetehr you owe it. This was preventable, sad to say. When you finance a car, unless you have a huge down paynment, you SHOULD always buy gap insurance. That would have paid off the difference you now owe. Your best bet is to file an answer, and don't say any of what you said in this post, but simply ask for mediation, and hope that happens. Try to negotiate a lower amount before trial, but otherwise you will owe the full balance, unless you hire a lawyer and file bankruptcy.
I agree with Attorney Ashman. The judge is not there to reduce your debts. The only question is (a) do you owe the money and (b) how much do you owe.
If a judgment is entered, the creditor will garnish your husband's wages, levy his bank accounts and seize any assets owned free and clear if a payment plan is not worked out. The creditor does not have to turn this over to collections nor is their an obligation to settle this for anything less than 100% of the debt. However, it may be possible to work out a favorable payment arrangement - say $100 a month and get them to waive interest. But what the creditor will accept depends on the lender. I strongly urge you to work out favorable payment terms because the creditor can get 25% of your husband's disposable pay (gross pay minus required deductions for taxes).
This suit is probably in magistrate's court; if it is, there is no mediation. And you would not file bankruptcy for a debt like this. Unless your dischargeable debts (medical and this and any other debts are over $10,000 then I would not consider bankruptcy). Filing an answer would be a useless act if this is your husband's debt and he admits liability. If he denies the debt an answer will only delay things if the suit is in state court, not magistrate court.
Generally, payment plans are 1% to 4% of the debt. I would think $100 a month would be reasonable here. You need to get this in writing and you also need an agreement that the creditor will not garnish wages, levy assets or otherwise execute on the debt provided that you timely make your payments.
I can negotiate a payment plan for you for a reasonable fee but it depends on who the lender is, who the law firm is as to what they will accept. Please e-mail me at [email protected] if you are interested or need further help.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
