Questioner: Paula
Category: Collections Law
Private: Yes

Subject: discover card
Question: My husband and I began working with a debt consolidation company (Clear Debt Solution) almost a year ago to negotiate settlements on our unsecured credit cards and get us out of debt.

Discover sent us a notice of summons that we responded to explaining our situation (illness, med bills, and reduction of income that resultd), that we were working diligently with Clear Debt to repay what we owed. They have moved forward now with a summons judgment asking the judge to forego a hearing and grant judgment. They are threatening to freeze our bank accounts until they have the money we owe them. They have also been unwilling to negotiate a settlement to date through clear debt solution.

My question is where do we go from here. My husband and I didn't file bankruptcy because we didn't want to go that route b/c we were responsible for some of the debt. I have researched Discover's business practices and found they typically do not negotiate and are very cut throat when going after their clients. We don't know what to do. Would we be better of to file bankruptcy at this point.

Answer: Do as you think best about BK but I almost always recommend against it. I must agree that Discover is very cut throat but when things get tough the tough must get even more cut throat or they end up in tough shape indeed. So how can the tough get tougher?

By learning court procedure, rules and how to become downright vicious. You can't go after original creditors under the Fair Debt Collection Practices Act but you can go after their lawyers in federal court. You have to learn about such things as in personam and subject matter jurisdiction as well.

Did the lawyer establish all the jurisdictional requirements of the court to give him standing to sue you? More than likely he did not because lower courts usually won't force them to comply with all the rules. They are usually very friendly towards the plaintiff and very unfriendly to the poor defendant.

You also have to learn about motions and how to prepare and file them. Of course this all sounds like an impossible task but it really isn't. You just need someone who knows about these things and can teach them to you in a very short period of time. I'm working on a fairly new concept in teaching at this time. It is an old idea that has been around for a long time but is getting a new face, becoming much easier to use and work with. Online collaboration is now possible.

It is much less dangerous than the old method whereby you could allow someone to take total control of your computer and had to hope that they knew enough to keep from messing it up. With the newer method of online collaboration that isn't possible so it is a much safer atmosphere.

With the new programs I can teach a student how to put a document together properly. I can use either web cam and mike, phone or even private chat room to get the points across or all 3 at the same time. I can type something in the chat room, the student can copy and paste it right into the document he is preparing and save it for printing. To make matters even better, the online collaboration is free to use. The program I'm using to teach is called Adobe Brio but there are a couple more out there I'm also looking into.

There will be more of that kind of programs coming on line in the near future. Microsoft has announced they are coming up with one in the near future which they may integrate into the newer versions of Microsoft office instead of just having it compatible with it's office suite of products. These online collaboration programs have just been released to the public this week so they will get much better as time goes on.

Of course, another lesson you probably learned the hard way is not to mess around with debt consolidation companies. All they did was soak up money you could have used to keep yourself out of trouble. Now it is time to start learning how to fix the problem the two of you created. Its either that or figure out how you are going to survive with 25% less money after they get a judgment.

So what will you do, learn how to fight or live with 25% less money while paying off Discover via garnishment? That will take money you need to keep the others at bay so they will be coming after you sooner or later as well.

Of course, there is always bankruptcy, isn't there? That will only cost you a couple of thousand or so but will also ruin your credit for quite a while whereas if you learn how to fight back you will probably be able to avoid all that cost and loss of credit standing. So which way will you go?