Dear Opening Credits,
I have a judgment against me in the state of Arkansas posted over two years ago. The law office who sued me is now calling all hours into the night. I am a single, unemployed parent and have nothing to offer them at this time and I am sure this is why I cannot get a job now. What can I do? -- Amy
You mean to tell me that an employee who is paid to get you to cough up the cash that you legitimately owe is not respecting the fact that you're a financially struggling mother? I'm shocked!
I apologize for the snarky response. The situation you're in is stressful and awful. But of course someone from the firm is reaching out to say, "Yo, Amy, remember us? We want our money, so send it immediately." The manner in which they're contacting you may or may not be correct, but this is what happens when you get sued for a debt and lose the case.
To review, the business you originally borrowed from or used as a service -- such as a bank, doctor or landlord -- did not receive payment from you. The reason you were unable to pay is irrelevant (to them, not to you). After months of waiting, asking and then demanding, they wearied of the process. They either sold the delinquent account to a collection agency who sued you for the debt, or the creditor decided to take that action themselves. Whoever it was, when they did, they won. You may not have even gone to court. Many defendants lose in court by default because they do not attend the proceedings.
More, I'm sure that if you look at the paperwork that has been sent -- or your credit report, as it is surely being listed -- the balance is considerably higher today than what it was before the lawsuit. Court costs and other fees have been added, causing the debt to swell.
The entity that sued you is the judgment creditor, and it employees have the right to call and try to claim what's rightfully theirs. The number of years they may have to do this depends on the state. In Arkansas, judgments remain valid for 10 years. During this time, the judgment creditor can attempt to collect using a variety of methods, including wage garnishment . If you were employed, this would be an issue for you and might be if you do return to work. According to your state's law, such collectors can claim up to 25 percent of your paycheck per pay period. You may relax if you're only receiving child support, unemployment benefits or government aid, as these funds are exempt from garnishment.
What do you do now? Well, you can pay the creditor if you have the money, either in full or in installments. As you don't seem to have the means, though, be aware that there isn't much the judgment creditor can do at this moment. They can wait it out for another few years until you start to earn again (the judgment can be renewed for another decade, but they may not be able to implement a wage garnishment). During this time, know that they may call but you are not required to pick up the phone and speak with them. Before you start to ignore them, explain that you would send them the money if you had it but you don't. Calling many times a day (and before 8 a.m. and 9 p.m.) will get them nowhere. In fact, they shouldn't because the Fair Debt Collection Practices Act has defined that action as harassment.
Another option to consider is Chapter 7 bankruptcy . If you qualify to file, you may be able to get a discharge of that and other unsecured debts. Your credit is already damaged because of the missed payments, charged-off account and lawsuit, but the bankruptcy notation would remain on your credit reports for 10 years.
As for all this harming your chance of getting a job, you may be right. It could be affecting your opportunities, but not without your knowledge, as employers have to obtain your permission first to pull your credit report. Some employers do check credit reports and are free to make a determination about you based on what they see. Don't let that stop you from pushing ahead, though! Many employers are empathetic and will listen to a valid explanation. If you're a great candidate, they'll want you on their team.
See related: When debt collectors make your life miserable , How to handle unethical debt collectors
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