Legal Question in Credit and Debt Law in Georgia

Read your sales contract. It is very likely that they will sue you, and then pursue a garnishment or other methods. The repo will be on your credit report for 7 years. The only way to stop the creditor, other than paying them, is bankruptcy.

Yes, they can and will come after you for the balance of the car loan. And it is true that the only way to stop this is to file bankruptcy. However, bankruptcy may not be the best thing. I do not know what other debts you have or what other assets you have. Unless this debt is over $10,000, it may not even be cost effective to file bankruptcy. Rates may vary and may depend on the type of bankruptcy that you file, but could cost $2,000 (this sum inlcudes the filing fees, attorney fees, fees to complete a consumer credit counseling class and obtain a certificate and any miscellaneous fees).

If this is your only debt, you can pay now if you are able or you can pay later. If you do not have the funds, start saving now. When you have approximately 50% of the amount, you can contact the creditor and see if they will settle. You obviously had some kind of financial hardship if the car was repossessed, like job loss or health issues. The creditor can only say no. Rule of thumb is that the more money you can throw at the debt in a lump sum will translate into a better deal. If you can only pay $100 a month on a payment plan, then the creditor is not going to give you any breaks. That is why I tell you to start saving now as you will have some funds to work with by the time that you are sued.

Even if the creditor will not give you a big break, they may still be willing to settle for less if you can do a sizeable down payment and then pay off the balance in monthly installment. Try to keep any payment arrangements between 6 months to one year in length. The law firm and creditor are not a lender.

If you are sued, it is not the end of the world. Garnishment of your pay is possible if you are employed for someone else other than yourself. The creditor can get 25% of your disposable pay, which is gross pay minus things like state/federal taxes and FICA/Medicare. Is your pay being garnished already, like for child support? It may be that they get nothing in that case. Or you may not earn enough to garnish or the amount garnished may be very low. Without looking at your pay stub, I cannot say. I would not worry about this though until you get sued.

Settlements can be negotiated at any time, even after judgment is entered. Creditors want paid and don't want to garnish your pay unless they must. Payment arrangements can be made in which the crditor promises not to garnish yhour wages as long as you pay a monthly agreed upon sum.

Feel free to contact me if you would like to negotiate a settlement for a reasonable fee.

Rachel Hunter

Attorney at Law

[email protected]

(678)-687-9693

Admitted in GA, PA & NC

.