A credit card company is sueing me in IL.?

I am trying to work throught CareOne DMP to get this paid off. Like an idiot, I went with a debt settlement company instead of a debt management company and...well..here I am. I go to court for the second time on June 30 to see if the Creditor will accept the CareOne payments.

I have reached out to the original creditor and advised that I am offering the attorney's office that represents them $400 a month instead of the $600 a month they are requiring to drop the suit. I will hear back within 30 days.

In the meantime, I have discovered that there are three ways I can be hit if a judgement is against me and they don't take a payment plan:

1. Wage Garnishment - in IL, it's 15% of takehome pay, can anyone confirm? Is the amount that is taken for alimony that I pay considered exempt?

2. Property Lein - I am doubtful they would do this because we do not have enough equity in the home for this to be worth their while. My husband and I own it together, so we'd have a $30,000 exemption and that's WAY more than the equity in the house. I think we might have around $5,000 in equity.

3. Payment plan - how is this determined? Do I bring in a budget and advise what I can afford, or do I have to accept what the creditor demands, regardless of whether this puts me in financial ruin?

Please help!

Update:

Wage garnishment - is it GROSS or NET? (before or after taxes?)

Secondly, regarding the Payment Plans: I was talking about court ordered payment plans.

The amount is 13K

1 Answer

Relevance
  • CatDad
    Lv 7
    1 decade ago
    Favorite Answer

    IL wage garnishment laws: 15% of gross wages or disposable earnings up to 45 times the federal minimum hourly wage ($5.15), whichever is greater

    - Unless the amount of the debt is huge...then they'd probably not go for a lien...they'd go after wages and bank accounts first.

    If this is a confirmed legal threat, then you need to be careful about any payment plans...Ideally, the best way to pay back debt that's already defaulted is to settle for less....like 50%. However, when a debt reaches the stage of real legal action then they tend to want the full amount.

    The problem with getting on a payment plan for debt that has defaulted like this is that there is nothing to stop them from putting you on a $500/month plan for 6 months or so...then turn right around and sue you anyway. Debt collection attorneys do this. As much as I dislike home equity loans...it may be worth you while if it helps you to settle for less...rather than getting on a payment plan with debt collectors who may sue you anyway after you pay them for half a year.

    Another issue: if you have more debts and maybe other possible legal actions...then Chapter 7 might be an option.

Still have questions? Get your answers by asking now.