Legal Question in Credit and Debt Law in Pennsylvania

I have put my husband and me in a pickle of a situation. Over the years I ended up running up around $48,000 in credit card debt. Last June 2009 I signed up with a debt settlement company and have been a working to try and straighten this out. Our Discover cards (3) did not send settlement letters like our other cards, but ended up sending us a letter to appear in court. I called them explaining I did not want to go to court and could we make an agreement. We were in the process of settling another card with our settlement company and didn't have much money to pay towards the Discover cards until the card we were settling was completed but still scraped up money each month to give them something. The lady led me to believe that the case would be dropped and we could come up with a settlement once the other card was done. However, the case was still processed and a judgement against us was filed. When the one card was paid I called to see what arrangement we could come to but they weren't willing to make any adjustment. I still have three other cards to settle who are willing to take a lot less so I explained that to her stating I would try to at least pay the smallest of the three my January or February. I thought they were going to automatically take a payment each month until then but didn't realize they hadn't. Now Friday I went to use my check card and was informed my account has been frozen aand my check card has been closed. I am devastated!!! I don't know what to do. I'm figuring on calling the bank first to verify it was Discover then call the office representing Discover to see if I start making payments if they will lift this freeze. I have automatic payments that come out of my checking along with three checks I wrote a few days before that haven't come in yet. Any advice would really be appreciated. Also how long can they freeze my account. By the way I reside in Pennsylvania.


Asked on 11/28/10, 4:14 pm

1 Answer from Attorneys
Rachel Hunter

You have gotten into a real mess. If you are with a debt settlement company, were they aware of this lawsuit? What are they doing for you?

Discover will generally not settle for less than 60% to 80% of the balance on the debt. And they do not allow a debtor to make payments unless the debtor is paying on the whole balance. I don't know what you owe on the judgment, but as a ballpark, they will want between 1% ad 2% of the judgment as payment. It could be more.

My advice would be to leave this be, take care of the reasonable creditors and save up to deal with Discover last. That said, they can and will levy on your bank account. You need to protect yourself. DO NOT PUT ANY MORE MONEY INTO THAT BANK ACCOUNT as Discover will grab it if it is over $300. Get an online bank account, an account at a credit union or at a small community bank 25-50 miles from your home, or at an out of state bank. Have your husband get an account just in his name - if the debt is in your name only and use that account for household bills. Or learn to just use cash and money orders.

Stop the automatic payments. Discover is not going to give you the money back that they have unless you can prove the money came from Social Security, VA benefits, unemployment or some other exempt source. I would be very surprised if they lifted the bank levy. If you put funds in the bank again, they will grab those as well.

Calling is fine, but get any deals in writing. Start saving all you can so you can get these debts resolved.

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Answered on 1/11/11, 10:15 pm


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