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