A creditor said I had to pay $450/month on a debt I was behind in.I can pay $225/month.Can they sue?

I live in Tennessee. I have corresponded with them from the beginning and have told them that now I can pay the $225 I was paying before I had problems. I have paid payments of $500 once and $450 three times. They insist I have to pay the $450 until the card is paid off. Is this legal?
Additional Details
The total owed is now under $7,000.

I happen to agree with what Studly said.

And, just for your information steelmadison, judgments in Tennessee last for 10 years.

In that length of time, peoples assests "do" change. People that have nothing right now can and do get sued based on the fact that the Plaintiff has "time" to collect.

Also, you are sooo wrong in thinking that a $1 payment on a $7000 debt will stop them from suing or that a judge would even, in YOUR wildest dreams, think that $1 payment is reasonable enough to deny any lawsuit. Things like that may have flown 30 years ago, but not now.

To the OP, studly gave you some good advice about trying to set a payment pattern that would establish a new pseudo contract. Send the payments that you said you can afford. Keep your payments at that amount or higher, never lower.

As far as whether they will or won't sue, it really depends on who they are and how sue happy they are.

If you are dealing with the original creditor, I would say that your odds are good in them not suing. For the simple fact that it is cheaper for them to accept your payments.

If you are dealing with a collection agency, it just depends on the collection agency. Some are sue happy, some aren't

Talk to them, like Studly said, if the person you are trying to work with is a jerk, speak to a supervisor. Work your way UP the ladder if you have to. Even if you to go to the very top - (it has been done before).
See if they will not only accept the payments that you can afford, but also if they will waive all or most of the fees/interest.

to my knowledge, as long as you are making an attempt to pay the bill off, they can not sue. Sounds like they are just trying to scare you into giving them more money. If they keep giving you a hassle, threaten to go to a debt consolidator so that they will recieve a hell of a lot less then what you are paying them now, or bankruptcy so they won't see a penny. Normally that will shut them up.

additon- i never suggeseted GOING to a creditor, but i have personally THREATENED the collectors with it, and with the "if i pay what your telling me i need to pay, i'll have to file for bankruptcy, then how are you going to get your money? you know what response i have always gotten? "no, now there is no need for that mam...."

Of course it's legal. They can tell you essentially anything they want including that they'll sue you if you don't pay $450. You do owe the money, right? They can sue you for it.

But one thing, they won't sue!

Tell them you can afford $225 and then pay that religiously. If they balk at that then tell them to sue away. Tell them you want to pay your debt and work with them and the previous payments show good faith but that $225 is all you can afford.

Yes, they can sue and they can increase your monthly payments. It's all in the fine print of the loan/credit application. It's usually words to the effect that if you are late in making payments for a particular length of time, they will consider the loan to be in default and they can ask for all of the money at one time.

As for the suing, actually what they will do is take you to court to get a judgement against you for the amount that you owe which is basically suing you for the money that you owe. If the judge issues an entry of judgement, you are then legally bound to pay the debt and the judgement goes on your credit report.

However, write them a letter and send it to them certified with a return receipt, explaining how you plan to pay back the debt and what you can reasonable afford. Most creditors will agree to most reasonable payment methods. They just want to recoup there money. If they do take you to court and you have all of the documentation between you and the creditor and you show that you are making payments in good faith, chances are, they won't enter the judgement against you as you are trying to pay off the debt.

Here are some sites with more info for you:

http://en.wikipedia.org/wiki/Judgment

http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm

http://www.ftc.gov/bcp/conline/pubs/credit/crdright.htm

Hope this helps!

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depending on how much debt you have, there are companies that will buy all of your debt and you pay them a fraction of what you really owed. Logic behind it is that the credit card company would rather just get paid and not chase you around even if they only get half. the 25% interest you pay over the last year is more than enough to cover the difference. Watch out for predatory lenders though. know with whom you are dealing and do your homework, but debt consolidation can help.

depends on how much the debt is. i think credit cards by law are supposed to have minumum payments at 4% of the outstanding debt. regardless if you can only pay $225 then most times they would rather work with you than sue. again that depends on the size of the debt - its probably not in their financial interest to go to court with anyone with less than 20k of debt but i don't know what the threshold is.

Let me start by saying Missie's and steelmadison are the worst thing you could do. Ignore them.

First, going to debt consolidation doesn't help you that much with only one credit card. And they will do exactly what you are doing....trying to negotiate a lower balance and/or payment plan. And there is no law forcing the creditor to even deal with them! You don't need to pay these companies for something you can do yourself.

As mentioned in a previous response, once you have defaulted on a loan the payment agreement is terminated, and they can demand the full balance. They do not have to accept smaller payments, and certainly not the $1 our idiot steelmadison says.

When you make a payment offer, it must be a reasonable attempt to pay the debt off in a reasonable amount of time. For a $7000 debt, at $250 a month it's going to take nearly 3 years (unless they will work with you on late fees/interest). I don't think that is unreasonable.

It also sounds like the rep you are talking to is a jerk. So start out by asking for a supervisor. If they still won't deal with you, then there isn't much more you can do. If $250 is all you can afford, you have little option.

Start by sending them $250 in the mail and see if they accept it. If they accept 3 such payments, you have now established a pattern. In many states this constitutes a contract "volation" meaning you both have an agreement to accept the new contract, even if it's not in writing. The canceled checks will constitute proof of this agreement. A judge will not issue a judgement when you are currently meeting your agreed payments. Note that I'm not positive this is how Tennessee does it, but in many states this is common. I'd need to research it a little. United States UCC rules do allow it.

If they don't cash the checks, then they will just have to sue you. But note that in many states, the judge is allowed to set an installment payment plan. Show him your budget and explain that $250 is all you can afford, and they may order this plan.

The bad part is you will still get a judgement against you, which hurts your credit history.

But I don't see much other options if the creditor isn't willing to work with you.

If you have breeched your contract (by not paying or paying late), yes, they can demand this type of payment from you, as well as sue. Before it comes to that, if you cannot pay, consider contacting a non-profit group that will contact your creditor and negotiate a smaller payment. Sometimes they can even eliminate or lower the interest. They could even work with you on all of your credit cards if necessary.

Yes, they can sue, but they may not. Oftentimes, creditors will make threats like this because it gets the reaction they desire (you pay).

$7,000 in debt can be eliminated fairly quickly (in most cases). Please consider the following:

1) sell something
2) pick-up a part-time job or two
3) stop using credit...use cash instead
4) get on a written budget

Scott....

as long as your trying they will back off all they will do is threaten you just hang up and pay what you can

My daughter had the same kind of situation, they called her one day demanding more money, and she made a stupid comment, like can't squeeze blood out of a turnip, go for it and sue, and they did. Then she was in really hot water, they tried to garnishee his wages, and all kinds of stuff...

Here's my own story...
Hi,
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nope...... you can send the $1 a month,,,, as long as you are making the attempt,,,, they cant do squat.
--------------------------------------...
response to big stud muffin:
hey studly.... before you start calling people idiots,,,,,
why dont you read the question that was asked.....
it was not asked if her credit rating will be damaged,...
and all the other crap you rambled on about, for no reason.

if $1 a month IS sent,,, that constitutes an attempt on the part of the subject in question..... (i did not advise that this be done,,, i only was making a point),,and at the very least WILL keep them from closing as total default and thus allowing them to persue legal actions (to full extent)

and studly,,,,, we do NOT know what this persons assets are... that alone will be a major factor in the creditors decision to take full legal action,,,,, and again,,,, that one dollar a month could help in curbing this action...... i know that for a fact.

basicly,,,, you cant get blood from a turnip, rings true here....
if you have no real properties of real value..... they will not bother.......
but if you have a fully stocked bloodbank..... you better send them what you can,,,,, if it is nothing more than $1 a month....... or in your case,,, $225...... and thats going to save you from loosing your bloodbank,,,so to speak.
ya,,, it will not be good for your score, and everything else that mr self right-cheeus STUUUUDLY clammered on about.
but,,,,,,they will HAVE to live with that..... and they will. im sure.
--------------------------------------...
ECHO:
i hear ya,,,,,,, gettin to old to be thinkin the "way it used to be",,
but be honest here,,, 7k isnt even enough for most of these people to even blink an eye at,,,,,now 70k may be something i would not have suggested $1 a month......lol
either way,,,,, i hope the auther gets it worked out,,,, and certainly does not have to deal with self serving pompous azz's who call others idiots without due cause or justification,,,, i guess, with a s/n like "studly".... cant expect any better.

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