What Happens When You Don’t Pay Your Bills?

In today’s society, no one can live without credit, whether it is for the purchase of a home or for the basic thing as a cellular telephone. In order to qualify for such financing you must have an acceptable credit score. Credit scores are issued by credit reporting agencies that gather information about your debts from your current creditors and make their reports available to other creditors seeking to qualify you. If you don’t pay your bills, you can have bad credit ratings on your financial records.

Additionally, if you don’t pay your bills creditors or other collection agencies will contact you to obtain payment. These companies cannot legally harass you by constantly calling your home or threatening you. In fact, you can stop all contact by writing a letter requesting that they no longer contact you, by law they must comply. If they do not comply with the law you can contact Consumer Affairs at 800-952-5210 or contact the through their website at www.dca.ca.gov.

Creditors will file a lawsuit to obtain either their money or their security. A secured debt is one in which a creditor holds a security interest in the item purchased. For example, a car is a secured debt, where the financing institution holds a security on the car until such time as the debt is paid off. On the other hand, a credit card is an unsecured debt. In the example of the car, your creditor can sue you for the security and any money you owe over and above the value of the car by first repossessing your car and then filing suit for the balance due. However, a credit card company can only sue you for the money as it has no security.

In the event that you are sued, you must not ignore the documents. You will be served with a Summons and Complaint for which you have only thirty-days to file a response with the Court. Otherwise, the Court will hold you in default and your creditor will win the lawsuit and obtain a judgment to collect against your property and income.

Yes, your property and your income can be in jeopardy. With a Court judgment your creditor can take money out of your bank accounts, put a lien on your home or garnish your wages from your employer by deducting up to 25% of your take home pay. In order to take your property, the creditor will send you a notice that your property is being attached. Do not ignore the notice. You have 10 days to file a Claim of Exemption from the sheriff or marshal that is performing the attachment in which you explain why your property should not be taken.

If you consult an attorney that has experience in consumer debt you will learn that the law allows you and your family to claim that some property is exempt, which means it cannot be taken from you even when there is a judgment against you.  For example, if your creditor has a judgment against you; and you have $600.00 in your bank account, through the sheriff or marshal, your creditor can take your $600.00. What happens if that $600.00 is for your rent or your food, you can file a Claim of Exemption and indicate your financial circumstances to prevent your creditor from obtaining the sought funds.

If the creditor wants to challenge your claim, they can seek the Court to intervene and make an order. At the hearing, you must prove that your property is exempt. If you do not go to the hearing, you will automatically lose the exemption. In either the event of a lawsuit or if a creditor already has a judgment against you, you must seek the help of an experienced attorney to provide you with your legal rights and responsibilities

This column is produced by Mary Der-Parseghian, Esq. For questions or comments, please send your message to 4727 Wilshire blvd., Suite 301, Los Angeles, CA 90010; E-mail: Mary@MaryDLaw.com or call at 323-937-2727. For additional articles please visit our webpage at www.MaryDLaw.com.

© 2011. Der-Parseghian Law Group

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