I had a judgement against me several years ago for a credit card debit for less than $5,000.00 it has now increased to over $50,000.00. I am a widow on social security and will probably never be able to pay this debt off. Is there anything I can do to get it to a more reasonable amount other than bankruptcy?
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Thank you for your question. Facing insurmountable debt is stressful. The good news is, you likely have other options besides bankruptcy to resolve it. More good news: Social Security benefits are exempt from garnishment, levy, attachment, or other legal processes, except in very limited circumstances, such as certain federal debts. So, in most cases, creditors can’t take your Social Security income to satisfy the judgment. However, if you own real estate, I strongly recommend scheduling a consultation with a bankruptcy lawyer.
Based on the information in your question, you may consider negotiating directly with the creditor to reduce the amount you owe. Here’s why: the creditor will likely be more willing to accept a lower settlement than pursue uncollectible Social Security benefits.
Additionally, judgments are subject to interest that compounds annually at a statutory rate, which may be the reason for the increase in the amount you owe. You’ll want to review the interest calculation to ensure it’s correct.
An important note: Colorado law allows judgment debtors to claim exemptions for certain types of property or income, including Social Security benefits. However, you may object to garnishment or other collection efforts and assert your exemptions. If the court finds that exempt funds were improperly garnished, it can order their return.
I hope this information has helped. Given the complexity of your situation, I believe you would benefit from speaking with an experienced Colorado bankruptcy attorney. They’ll be knowledgeable about debt collection and exemptions and can provide advice based on all the facts of your case. If you'd like to schedule a consultation with someone at our firm, please call our office at 303-688-0944 or set up the appointment online.