Re: Deficiency judgement: deals and fees?
Posted by Julio Martinez-Clark on January 31, 2008 at 23:08:53:
In Reply to: Deficiency judgement: deals and fees?
Posted by Introuble on January 31, 2008 at 19:18:46:
Introuble,
The fees that you will incur are very likely detailed in the promissory note that you signed
when you took the loan; they usually include fees related to collecting the amount from
you (attorney's fees, court filing fees, title search, etc), penalties, etc.
It's a personal decision of yours to pay before the judgment takes place. If you pay $20K
now and you don't enter into some type of agreement with the creditor, and don't pay the
remaining balance they will probably sooner or later will try to collect it from you.
If internal collection efforts fail, however, the creditor eventually must write off the account
as uncollectible, and it will place the account with an outside collection agency. The agency
then begins its own efforts to collect on the debt. You now must deal with a company
whose only objective is to collect as much of the debt as possible, as soon as possible. The
collector may try various tactics, including threatening phone calls and letters, to convince
the you to act quickly. The debt buyer/collection agency will eventually sue you if they
determine that you have assets.
It's the creditor's choice to either sue you to get a judgment against you or to sell the
account to a third party (who will pay 20 cents on the dollar or so) and write off the loses. I
don't really see how "disappearing" will make a difference to avoid being sued. The lender
will make an internal decision based on the debt amount and on the probability of
collecting the debt from you. If they consider wise to invest more money trying to collect,
they will hire an attorney that will start a lawsuit against you and then will try to attach all
your assets (real estate, bank accounts, garnish your wages, etc). I don't see how
"disappearing" will make a difference on whether the lender decides to sue or not.
"Disappearing" will make a difference in "collectability." Here's where becoming "invisible"
comes into play. If your assets are easy to locate (thus you are easy to locate as well), you
bet the lender's attorney will have lots of fun with you and make lots of money in fees in
the process.
I haven't seen anything on statistics on bank deficiency judgments. The decision to sue
you or to sell the account to a third party at a discount and write off the loss is a creditor's
internal decision as explained above.
I've written a detailed article about asset protection that you may find helpful in my blog
below.
I hope this helps,
Julio Martinez-Clark
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