| (Note: this is not to be considered | | | | from relative to the average American |
| legal advice, and it is dealing with the | | | | consumer, even if a creditor has sued |
| hypothetical “average” | | | | them in court and won a judgment. |
| elderly and/or disabled person. Each | | | | Consider the following situation. |
| case is unique and to determine the | | | | Let’s say a creditor has just sued |
| legal ramifications of your individual | | | | you and won a judgment in court. They |
| scenario you should consult an | | | | now have to execute the judgment in |
| attorney.) | | | | order to actually start collecting the |
| Debt settlement, also known as debt | | | | debt. One way a creditor executes a |
| negotiation or debt reduction, is a | | | | judgment is through wage garnishment. |
| relatively new way for dealing with your | | | | When a creditor garnishes |
| debt problems. In a debt settlement | | | | someone’s wages, they |
| program, by negotiating with a creditor, | | | | automatically (and legally) withdraw a |
| a client can reduce their debt by as | | | | certain percentage of that |
| much as 50 percent and be debt free in | | | | person’s wages every paycheck (25% |
| as little as 12 to 30 months. In order | | | | after taxes in most states) until the |
| to accomplish these savings, however, a | | | | debt is paid off. Fortunately, |
| client must voluntarily stop paying | | | | creditors cannot garnish Social |
| their creditors. By doing this, a | | | | Security, disability, and most pensions |
| creditor is forced to confront the | | | | (unless the “creditor” is |
| following question: How can I collect | | | | the mother of your children and |
| the most money from this past due debtor | | | | she’s collecting alimony). This |
| with the least amount of effort and the | | | | being the case, the creditor would |
| least total expense to my company? | | | | probably look for another way to collect |
| Typically the answer to this question in | | | | the debt. Levying a bank account is |
| the minds’ of creditors is | | | | another common method for executing a |
| accepting a lump sum settlement for less | | | | judgment. Again the elderly and the |
| than the full balance owed. | | | | disabled are protected, presuming the |
| Although the vast majority of cases work | | | | bank account’s funds are made up |
| out according to this framework, as | | | | of the deposits from social security, |
| anyone who has ever read a debt | | | | pension, and/or disability benefits. |
| negotiation contract can tell | | | | A creditor is always reserved the right |
| you---it’s impossible for a debt | | | | to pursue legal action to collect a past |
| settlement company to guarantee that a | | | | due debt, even if the debtor is elderly |
| client won’t be the target of any | | | | or disabled. However, it only makes |
| legal action by their creditors. After | | | | sense that they’d prefer to accept |
| all, creditors are always reserved the | | | | a settlement for less than the balance, |
| right to sue debtors to collect a past | | | | especially if the debtor has no assets |
| due account, regardless of whether the | | | | or lives in a debtor-friendly state like |
| consumer is taking any action to resolve | | | | Texas, Florida, Iowa, Pennsylvania, |
| the outstanding debt. | | | | Arkansas, or Oklahoma. It is for these |
| That being said, thanks to highly | | | | reasons that credit card debt reduction |
| favorable state and federal debtor laws, | | | | makes a lot of sense for the elderly and |
| the elderly and the disabled are very | | | | the disabled who are struggling to pay |
| difficult to collect a past due debt | | | | their minimum payments each month. |