Legal Question in Credit and Debt Law in North Carolina

I live in North Carolina and I am a single parent who lost there job several times and have been fighting to get back on my feet and make ends meet. My question is, with my unsecured debt, there are to companies that have filed civil suits against me for payment. Are they allow to refuse payments from you if they are not in the amount that they want and continue to push legally? I want to pay off my debt but with what I make and what I can pay it would be about $50.00 to each company. I thought that goal was to get the debt paid?

Asked on 8/13/13, 11:47 am

2 Answers from Attorneys

Kenneth Love Ken Love Law

Speak to a debt relief attorney in your area. Once you fall behind they are allowed to refuse payments you want to send to them unless you get current and make contractual payments

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Answered on 8/13/13, 12:18 pm

Funny, I do not know of any company who refuses payments. However, what you propose is unreasonable. Creditors do not have to settle a debt and payments are usually based on the full amount of the debt. The payments range in scope from 1% to 4% of the debt. You do not indicate how much you owe, but in my experience, creditors just are not going to accept less than $100 (some will - but this is in general).

Also, once a debt goes to judgment, you have the right to pay money to the clerk of court. The problem is that judgments earn interest at a rate of 8% per year. So if you are going to make a small payment like this to the clerk, then you need to pay enough to cover the monthly interest and make a dent in the principal. If you are just barely paying the interest then your balance will never go down. And if you are only making small principal payments then it will take years to get this debt paid off.

Without knowing anything about your circumstances, my advice would be that you should not make payment arrangements if you are judgment proof (meaning that your assets are exempt), If that is the case, then you need to make those payments to yourself. Whenever you have approximately 50% of the balance of the debt (and you can always check with the court to keep updated on the balance) then that is the time that you should consider resolving the debt for a lump sum settlement.

I am in the Raleigh area. Please email me at [email protected] if you would like to discuss the specifics of your situation in confidence. Email consults are free. There is a charge of $50 for a 30 minute phone consult.

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Answered on 8/13/13, 9:39 pm

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