Legal Question in Credit and Debt Law in Pennsylvania

No, having no money or assets is NOT a defense. A defense to a credit card debt would be: (1) you never had a credit card (like in the case of ID theft) or the credit card company picked the wrong person with the same name as yours; (2) the statute of limitations has expired; (3) you don't owe as much as the credit card says I owe (where the credit card company did not credit all your payments - the amount getting bigger due to interest is not a defense); (4) you paid off the debt already; or (5) the debt has been sold to somebody and there is no proof of assigment or other necessary documents attached to the complaint.

It doesn't matter whether you show up or not. If this is your debt, the statute of limitations has not expired and you have no other defenses, they are going to get a judgment against you. Judgments earn interest at a rate of 6% per year so it will get bigger.

A judgment on land lasts for five years and can be renewed every 5 years after that. A judgment on personal property lasts for 20 years.

A judgment can stay on your credit report for at least 7 years after its entry.

There is no wage garnishment in PA for a debt like this. However, they can collect by trying to execute on your possessions. I don't know about your assets or circumstances. If you have a bank account, keep less than $300 in the bank or it can be seized. If you get anything like unemployment, SS benefits, VA benefits or a pension, set up a "special purpose" account and only put exempt funds in this account. Do not commingle the funds with non-exempt funds or with the funds of another person. You can pay bills and withdraw money from this account but you can't put money in from a non-exempt source. And once you take money out, you can't go back to the bank and deposit these funds as you are commingling.

There is no homestead exemption in PA. If your property is mortgaged, most creditors will not make you sell it. They will grab any money if and when the property is sold as the judgment acts as a lien on your real property. If your property is owned free and clear, it is at risk of being sold. So are things like your car, if owned free and clear, or your furniture or tvs etc.

Creditors want money, not your stuff and your possessions will not bring in much at a sale. Nevertheless, it depends on how aggressive your creditors want to be.

It depends on who the creditor is and what they are willing to accept but most creditors will settle for 50% to 80% of the judgment or whatever it has grown to at the time you are ready to settle.

What I would do is see how much the judgment is and whether you could acquire the funds to settle in a lump sum now. If not, then save up until you have enough to settle. Once you have at least 50% you can call the creditor and see if they will take it. If not, see if they will let you use what you have saved as a down payment and see if they can accept the balance in 1-12 payments. If they say no, keep saving until you have 60% or more.

Do not pay a dime until you get a settlement letter from the creditor outlining the terms. Once the agreed upon amount is paid, you want to get a piece of paper called a satisfaction of judgment.

There are many lawyers who will litigate this if that is what you want to do, but you really waited entirely too long. You can try seeing if they will grant a continuance and, if not, let them enter judgment and file an appeal within 30 days. On appeal, the case is heard all over again. There may be a cost if you appeal, but it will be worth it if you have a valid defense.

The debt cann't be too large if it is at the magistrate but if its over $10,000, then you might want to contemplate bankruptcy, especially if you have other debts. Again, it depends on your assets and your circumstances. If you are questioning this, then get a co nsult with a bankruptcy attorney to find out more about what is involved. It has its own consequences so that is something you will have to evaulate.

If you want a lawyer to help you resolve the debt when you are ready to settle, I can assist you in resolving the debt for a reasonable fee. Please contact me at [email protected] if you are interested. I also give free consults via email if you would like to discuss the particulars of your case in more detail.