You Owe The Money, So Negotiate

Jeanine says Capital One attempted to serve a subpoena to her for a Capital One bill. There is a judgment on her credit report even though she wasn't actually served. Will they garnish her wages?

QUESTION: Jeanine in Buffalo is calling because Capital One attempted to serve a subpoena to her for a Capital One bill, and now there is a judgment on her credit report for $700 even though she wasn’t actually served. She’s worried they’re going to start garnishing her wages and isn’t sure how to handle this.

ANSWER: I do not know New York law, whether it requires personal service. You do not have to be served in most states. In most states, they have to make an attempt to serve, and then they just sue you. If you don’t show up, you lose by default, which is what’s happened. New York law is a little squirrely. New York, California and Florida have some of the wildest laws out there, so I don’t know. I’m not an attorney for sure, and I don’t even have that much expertise on New York to start with.

I guess the first thing is let’s place a call to an attorney and see if there’s a requirement that you’re served. If there is, then you obviously weren’t served, and the judgment could be undone. The next question is how much money are you willing to spend to get rid of a $700 judgment? Not much. Seven hundred dollars doesn’t buy much attorney’s time. The thing I start wondering about is did you owe the money originally? You do owe the money, I assume.

What if you called the law firm and settled the judgment for $200? It’s a $700 judgment instead of a $700 debt. They’ll settle a judgment, and offer them $200 to settle the judgment. I know you can do that. That part I do know. We do it all the time. That’s not a hard thing. Of course, you want to get this in writing from them in order to give them the $200 because the big deal here is to make this go away. But typically when you’re dealing with a law firm, you’re like a widget in a factory for them, so they don’t care. Really, they don’t even hardly care enough to take your call. Don’t expect a lot of empathy or a lot of emotion. This is a 10 on a scale of 1 to 10 for you. It doesn’t even show up on the scale for them. Keep in mind that’s the attitude you’re going to be walking into.

The first thing you need to do is call an attorney and find out if you’re supposed to be served in New York. If you are, then you might want to use that when you call the law firm and try to settle. If they don’t want to settle, then tell them you’re going to go ahead and sue them for not serving you properly. But don’t fire that bullet out of your gun the first time. Just lay $200 on the table and see if that just solves it. It might solve it fairly quickly. The bad news is that it got to an attorney. The good news is you’re dealing with intelligent life—typically—when you’re dealing with a law firm. If you were dealing with a credit card collector, you wouldn’t be dealing with people with two brain cells to rub together. This is actually easier now.

It’s a negotiating process. Don’t expect them to just take your $200. You’re going to offer them $200 and see what happens here. Once it’s settled, the judgment goes away. There is no judgment anymore. It’ll be a judgment on your credit that has been settled. It’s an old judgment that no longer leans against you. But it’s still there. It still shows that Jeanine didn’t pay her bills and she got sued. That still shows up on your credit. It’ll show for seven years. It’ll count against you for stuff like a house for about four years. The big deal is if you don’t solve it, if it just lies there, it never heals. It’s an open wound. Let’s get it dealt with for a lot of reasons—a job being one of them.

I’m sorry you’re going through this, but this is more akin to working on a traffic ticket than it is a big-time lawsuit with Matlock. It’s real low key, and it’s not going to be friendly. You’re going to have to kind of scrap your way through it, but you can do it.