Paying off debt?

[Hecopisk]

I have enough in savings to completely pay off all my debt in collections (a total of 5 accounts, 3 are the same company). Is it better to pay off all debt at once or to make payment arrangements with the the collection agencies? If I make payments (on time) would it turn the collection into a positive? Or no matter what, will I need to wait the full 7 years to get them removed?

[NCperson]

bring all your debts current as soon as possible if you have the cash to do so. 

it'll take up to 7 years to get the credits removed whether you paid them on time originally or not - so best to get back on track - the sooner the better as the credit score may begin to rise as each new month shows payments all made on time 

[Bonnevie]

I would suggest tackling these strategically and as soon as possible. I recently was in the exact same situation and now have 0 accounts in collections and a 740 credit score (only 15 months ago my credit score was around 580)—I would not recommend taking all your savings and paying these off (you always need some kind of emergency fund or savings for a rainy day) but I would take a small chunk and try to settle 1-2 accounts every month or so as you can. Even though it takes 7 years for these to drop off after full settlement, sometimes its worth it to wait because the longer it gets passed around to collection agencies the deeper “discount” settlement they may offer. Try to negotiate a full settlement offer for a lower amount rather than agreeing to a payment plan.

[lo213]

If you have a debt that you were sued in court and lost and agree to make monthly payments on it with as much as you can, can they still put a lien on your house and/or garnish your wages?

[tagteam]

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@lo213 wrote:

If you have a debt that you were sued in court and lost and agree to make monthly payments on it with as much as you can, can they still put a lien on your house and/or garnish your wages?

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You absolutely need legal counsel. In any event, the judgment creditor can lien your property and garnish your wages following a judgment against you. However, many states also require a wage garnishment order prior to garnishing wages. 

Again, you should consult with an attorney.

[lo213]

Yes I am aware of that. But I was asking if the judge states I owe them and I agree to make monthly payments and the judge agrees with my recommendation of making monthly payments, can they still put a lien on my house and/or garnish my wages?

[NCperson]

this is a community to ask tax questions, not legal questions; which is why @tagteam recommended obtaining legal advice

[tagteam]

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@lo213 wrote:
Yes I am aware of that. But I was asking if the judge states I owe them and I agree to make monthly payments and the judge agrees with my recommendation of making monthly payments, can they still put a lien on my house and/or garnish my wages?

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Yes, I am aware that you are aware. However, you apparently are not aware that the prevailing party (in this case that was not you) typically writes the order (judgment) for the court and the judge merely signs it.

If the judge agreed with your recommendation but that was never recorded in the judgment (or a separate court order), you are simply out of luck because it is as if that discussion never happened.

Hence, the rationale for never going to court without legal counsel and the recommendation to consult with legal counsel at this point.

[lo213]

I went to court. Since we could not agree on the settlement amount it’s most likely going to trial where I can Dispute some of the charges.
So are you saying that if it’s not brought up at court and approved by the judge that they want to put a lien on my house or garnish my wages then they can’t do that?

[tagteam]

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@lo213 wrote:
I went to court. Since we could not agree on the settlement amount it’s most likely going to trial where I can Dispute some of the charges.
So are you saying that if it’s not brought up at court and approved by the judge that they want to put a lien on my house or garnish my wages then they can’t do that?

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In your first post, you stated that you went to court and lost. That would lead virtually anyone to believe the opposing party had already obtained a judgment against you for the amount you owed.

If this case is going to trial, you should definitely not appear without legal counsel. Please at least seek legal advice from an attorney in your jurisdiction. 

Regardless, if a plaintiff obtains a judgment for a specific dollar amount, then that plaintiff can place a lien on your property and, in some jurisdictions, the plaintiff can also garnish your wages without further notice (in others, the plaintiff needs to seek post-judgment remedies, such as court orders to lien specific property and/or wage garnishment orders).

[Brandi0720]

Yes