QUESTION
What is the worst case scenario for debt summons?
Asked on Jun 04th, 2013 on Bankruptcy - North Carolina
More details to this question:
I defaulted on a gym membership after extenuating circumstances. I paid four months of the one year contracted. I tried to get out of the contract but I was told I need to pay or sell my contract. I did neither and had never even used their gym, now I have received a summons for the debt. I will dispute but what happens if I am ordered to pay but do not? I see there is some sort of debtors prison law, so no jail time. I am also tax exempt, my husband is a disabled combat veteran so we are paid through social security and government retirement. Does this protect us from bank seizures? They cannot garnish wages given by the federal government correct? What is my worst case scenario?
3 ANSWERS
Debt Collection Attorney serving Chicago, IL
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Edelman, Combs, Latturner & Goodwin, LLC
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You cannot be arrested, unless you refuse to appear and answer questions about your assets after a judgment is entered. If you are sued by a debt buyer, appear and demand a trial. Social security and veterans benefits are exempt.
Answered on Jun 06th, 2013 at 2:46 AM
There is no debtors prison.
Answered on Jun 06th, 2013 at 2:45 AM
Family Law Attorney serving Durham, NC
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Morelos Law Firm
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Unfortunately if there is no true defense to the debt, then whether you respond to the summons or not, likely a judgment will eventually be entered. But the "worse case scenario" would be a judgment against you on the records at the court house. They cannot arrest you, take your house, or your car, garnish your wages, attach to your taxes, etc. You have what are called "exemption rights" to protest most of your main assets or at least up to a certain value. After that, if there is nothing left to collect against, while they have a right to try, not much will be happen. It does become a lien on any real property you own such that if you were to try and refinance or sell later, it would need to be paid off at that time. A judgment is good for 10 years and also shows up on your credit. You can try to negotiate with them at any time, even after judgment is entered. I hope this provides you at least some relief.
Answered on Jun 06th, 2013 at 2:45 AM