Several times a week, I’ll get calls from people who have gotten a summons for a lawsuit from a creditor. Often, they’re surprised. They’ve been making payments and didn’t expect the creditor to sue them. When I ask them if they’ve been making the full monthly payment, more often than not they haven’t been.
Keeping creditors from suing you by paying them less than what you owe is a common misconception. Right up there with “possession is 9/10th of the law”.
The fact is, if you pay a creditor less than what is required under your contract, you’re going to be in default under the terms of the contract. What I’ve noticed is that this issue frequently comes up in paying medical bills. People think that a hospital can’t sue them if they’re paying something. At some point before or after you were admitted to the hospital or emergency room, you agreed to pay for their services. Somewhere in that agreement are the terms under which you agreed to pay. You shouldn’t be surprised to learn that they don’t want to get paid for a $10,000 emergency appendectomy at $10 a month.
You can’t modify that contract by simply making smaller payments. The creditor has to agree to that smaller payment. The creditor is also not under any obligation to change the terms of your contract. If it decides that it wants to sue you for defaulting under the contract, it can. There are only two ways to stop their collection: paying the debt or filing bankruptcy. If they get judgment, they’ll start taking money out of your paycheck (25% of your take home pay).
Bankruptcy will stop their lawsuit and their garnishment. Chapter 7 bankruptcy will eliminate your obligation to repay all dischargeable debts. Chapter 13 bankruptcy may require you to pay back a certain amount of what you owe. Anything left over will be eliminated.
Talk To A Denver Bankruptcy Lawyer About Stopping Collectors
If you’re having problems paying your hospital bills and other debts, we hope you’ll come in for a free consultation. Bankruptcy may be an option and will allow you to get a fresh, financial start. You can meet with an experienced bankruptcy lawyer by calling 303.331.343 or by using our online scheduling system.