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Settlement,and what next


butterfly_girl
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Hi- Newbie here. I have spent a few weeks looking through the forum searching different info. I have found some great resources to help with my credit repair.

I offered a settlement to the collection agency and they declined. This was over the phone. I wanted to feel them out. I am already making mo payments to them of $25.

This loan is a payday loan from 2001 but filed for judgement as of 2003. I have had to go to court 2x's over this period for non payment. The original loan was $234 (as listed on my credit report) the total due now is over $800 and growing interest. I am in the state of Kansas and I looked up the statues as to how much interest can be added to my original debt. I called the AG and they could not help me or give legal advise. ( which is odd) So I called Legal aid and that is a mess. ( I got disconected) I need to know how the interest in figured. I think I may have the basis to fight this debt. When I went to court in May I offered to pay $15/ mo ( fixed income) They said no they would need more before I could go. So I agreed to $25/mo. Can they NOT let me leave court?

As far the phone settlement they countered with $600 FIRM. I even called the original debtor and she said she already spoke to the attorney and she was firm on $600.

Right now I am composing a setlement letter and I would like some guidance. Any idea what my next step should be?

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Hi,

This is just me.

I would not send the payment and settlement letter together. I am new here and not a lawyer but I would treat both the current payment and settlement offer separate if I were in your position.

I am sure someone else will have better info to lend.

Good Luck!

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  • 2 weeks later...

thank you for your responce. Im not sure about the laws regaurding payday loans. I have tried to call the DA about the laws and the refer me to legal aid who NO LONGER does debt collections.

I would love to have this off of my credit. since the orig bill was for 250 and now its quaduple the amount and still growing.

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Personally (and bear in mind I'm only speaking personally); I would stop paying completely and tell them to do their worst.

I say that because at the pittance you are paying them you may NEVER have this paid off.

Your only other option as I see it would be to take what some may consider drastic action - I'd sell something (or many somethings) or take a second or third job or even borrow the money from a different source just to get these bottom-feeders out of my life.

One final thing and I don't intend to be "mean" here but if you are seeking credit from scum like payday lenders; your credit report is probably not something you really need to be worrying about.

Edited by Robert_Nashville
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Point taken! lol yeah that was a long time ago for a car needed in a bad situation. Its not my habit.. this was in 2001 I think. I may have put the date in my 1st post.

This lawyer drags me into court every time I dont pay.:? Its like clockwork. they are very hard nosed. I thought about paying them off to get them off my report. then I think about all the $$ I could save if I can get them to drop the case because they broke the law. ( if they did)

xdancex

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Point taken! lol yeah that was a long time ago for a car needed in a bad situation. Its not my habit.. this was in 2001 I think. I may have put the date in my 1st post.

This lawyer drags me into court every time I dont pay.:? Its like clockwork. they are very hard nosed. I thought about paying them off to get them off my report. then I think about all the $$ I could save if I can get them to drop the case because they broke the law. ( if they did)

xdancex

So go to court...play hardball with them...get an attorney of your own.

If you believe not paying is not an option then get a second or third or fourth job...only be home long enough to sleep a few hours and get these a**holes our of your life - one 20/hr per week part time job would take care of this in about two months.

You other option is to just keep paying $25/month - even if they don't add another penny of interest that's more than 2 1/2 years of payments - I wouldn't do that but that's me.

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I wonder how many others have done this or just fought it. Im going to go look up the DA number again. Any other advice would be appriciated. So I will be sending a settlement letter also. I guess I can go from there. I don't need a second job Im disabled and I do have some savings to pay it off. I just need to know how much intrest can accrue. I have seen different amounts and I don't know how they figure it. Is it monthly or on the whole debt? Like if its 4% intrest do they add 4% a month? vs to the total debt. (ouch my head is spinning)

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I wonder how many others have done this or just fought it. Im going to go look up the DA number again. Any other advice would be appriciated. So I will be sending a settlement letter also. I guess I can go from there. I don't need a second job Im disabled and I do have some savings to pay it off. I just need to know how much intrest can accrue. I have seen different amounts and I don't know how they figure it. Is it monthly or on the whole debt? Like if its 4% intrest do they add 4% a month? vs to the total debt. (ouch my head is spinning)

You're disabled??? Are you working or not working? Are you living on disability income from Social Security or a private policy???

You REALLY need a lawyer of your own or you need to become very well educated in your state's laws immediately. Generally, disability income cannot be touched by a judgment and even if you are working, you may not be making enough to meet the threshold to have any wages garnished.

Also, if you really want help from a forum you need to lay out all the pertinent facts or you are likely to get the wrong advice.

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Oh stories like this burn me up...pay day loan companies are scum!!! A loan shark would be embarassed to do what these @#%holes do to people.

$200 odd debt and it's now over $800, you've been paying $25 a month for how long? You've paid back the original amount by now and THEN SOME.

Here's an idea, try to get the attention of your local media (tv, paper, etc.). They usually have a consumer fraud/complaint reporter that love stories like these. They're trying to shake down a disabled person for hundreds of dollars when the original loan has esentially been repaid? One report in the local media and I can almost guarantee that this will go away and they'll even apologize for the "misunderstanding". Heck, it may only take the reporter contacting them for a quote to get them to cave.

ETA: I don't mean that you should try this instead of looking at your legal options, but to try it concurently to looking at other ways to get this resolved.

Edited by debtfreein18
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You know I thought I gave you all the details. You dont have to be rude. Im new at this. Yes, I am aware they can't take my money. I didn't say they were. I said I would pay $25/mo this is a new agreement in the last 2 months. I have paid off and on over the years. The loan was from before my disability. Yes, If I choose not to pay w/ my disability money i would assume I would still have this on my credit report. right? They can't garnish and I don't have a house but I do have a new car.

I came to this forum to learn and research. There is a wealth of information on this site. I have learned a lot and I have even started the system to keep trackof debt conversations, credit reports and more. It has helped me considerably. I just can't find information that pertains directly to this debt. :(

Maybe I should ask in the legal forum?

thanks for you help and advise,

B-G

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No one, me included, was being rude to you; if you want to interpret the comments that way it's your choice...no one here, as far as I know, reads minds or has a working crystal ball - we can only answer questions/offer opinions based on what questions the poster asks and the information he/she chooses to share.

Your original post talked solely about "fighting" the debt and making settlement offers (you didn't mention your credit report)...being "disabled" could have a significant bearing on how you might proceed to fight the collection of the debt or even if you need to bother to fight it; hence, it could be a critical piece of information to know.

Your second post was one in which you mentioned that you would "love to get this off my credit report" which is all well and good but it certainly didn't make it seem that getting it off your CR was the or even a primary concern.

Now per your last post, it seems your credit report is what you are really worried about???

You said you have a judgment against you...that's a public record and not something that is easy to get off your report; I'm not saying it can't be done but this is not some old bill that a CA is voluntarily reporting and can easily voluntarily choose not to report.

At the risk of truly being "rude"; if you can afford a new car could you not afford to pay more than $25/month??? Just a though. :rolleyes:

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I just need to know how much intrest can accrue. I have seen different amounts and I don't know how they figure it. Is it monthly or on the whole debt? Like if its 4% intrest do they add 4% a month? vs to the total debt. (ouch my head is spinning)

Unless you're dealing with a gangster or a loan shark, who quotes interest like "30% per month", interest is meant annually. Even so, interest can be calculated in different ways, giving slightly different results.

But let's take an example. Let's say you owe $800 at 4% (which is very low!)

The annual interest is 4%. If interest is compounded annually, $32 of interest would accrue in a year (.04 x $800 = $32). But interest is almost never compounded annually anymore.

More likely it's computed and compounded monthly. The amount of interest that would accrue in the first month is .04 / 12 months = .00333......

Now multiply by the $800 owed and you get $2.67. If you don't make a payment, the next month your balance is $802.67, and the interest next month is $2.68. And so on. After 12 months (consulting my magic spreadsheet) $32.60 in interest would have accrued, and the balance is $832.60. Note how this is higher than if interest is compounded annually.

With a higher interest rate, of course more interest accrues, and the effects of compounding are magnified.

Now, if you're making payments of $25, what happens is the first $2.67 goes to pay the interest, then the rest reduces the balance to $777.67. The next month, the interest is $2.59, and your $25 payment reduces the balance to $755.26. My spreadsheet tells me it would take about 34 months to pay this amount off. A larger interest rate means more interest each month, less reduction in the balance, and longer to pay off.

I hope this helps. I know it seems complicated. Feel free to ask questions.

Regards,

DH

Edited by debtorshusband
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  • 1 year later...

If I was you, I would look for free legal help or call a lawyer who will do a free consultation. Maybe even go to a disability lawyer...this just doesn't seen right

I guess I don't understand how a judgement works! I can see a CA or a OC adding interest..but I thought when you went to court and got a judgement, that that was an agreed upon sum you had to pay in a lump sum or a payment plan. I didn't realize interest is added to the judgement amount. (I had a judgement but was able to pay it in a lump sum..I feel our pain)

To Robert ..where in this country can you find a $20/hour part time job?...sign me up!!! I had to go to college to get my $22 dollar/hr job?

Otherwise chill Dude.... have a beer...you do sound really rude

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but I thought when you went to court and got a judgement, that that was an agreed upon sum you had to pay in a lump sum or a payment plan. I didn't realize interest is added to the judgement amount.

Interest is allowed on judgments according to state law, if you don't pay them right away. In California, for example, the interest rate allowed on judgments is 10%.

To Robert ..where in this country can you find a $20/hour part time job?...sign me up!!! I had to go to college to get my $22 dollar/hr job?

Otherwise chill Dude.... have a beer...you do sound really rude

This thread was about a year old until stuartthomas resurrected it. Robert hasn't been around in quite some time. Overall, his absence is a negative for these forums.

Regards,

DH

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