Collections credit card account now taking me to court. How does a settlemt affect my credit? should i settle?

Settle with them, or arrange a payment plan, before you get to the courtroom. A judgement (a judge ordering you to pay) doesn't help anyone, and is the worse offense against you to any lending company.

the loan is late either way. settlement is better than nothing. i would think it would be better to settle if they are willing to take less than to lose in court. if you lose in court they will be able to collect attorney and court fees in addition to the outstanding balance. were you served a notice to appear in court ? or is this just a threatening letter / verbal threat by the company. they really just want to get their money back and are probably frustrated.

I would suggest settling before a judgement is entered on your credit report under collection status. Make sure if you settle that they don't report it to the bureaus with a confirmation letter sent back to you. If they do, it'll be on your record for 7 years and it does not look good. Thus, you become high risk.

You should try and make a settlement before you go to court. This will show on your credit but it's not as bad as a judgment.

If you go to court, they will win and get a judgment, at that point they can attach bank accounts, garnish wages (if your State allows it) and file liens on any other property you may own like cars, boats, land and homes.

I don't know where the previous poster got his information but I know this to be true. They will come after you.

Yes it will be better for you if you go for a settlement. You can also consult with a debt consolidator for help.
To know more you can visit
http://www.debtconsolidationmanagement.blogspot.com
and
http://www.geteasyloans.blogspot.com

Your credit ahs already been hit hard, but it will take a bigger hit once a judgment is entered.

I direct this part of my answer to "random guy fomr Texas"
He states that your home will be unaffected. This is not true. Is the judgment is taken in Superior Court, then a lien will be places on any property that you own. You will be unable to buy, sell or re-fi any realestate until the Judgment is satisfied. If the amount is large enough, say over $20K and you have equity in your home then can force a forclouser on you if you do not pay it.

I would suggest settling as soon as possible. ut in wirting that you want this REMOVED fomr your credit. They do not have to do this at all, but it is is worth a shot.

If your credit card account has already been sent to a collection agencies, your credit has already been affected. It was actually affected from your first late payment.
A settlement does look better on your credit report, but does not fix the situation, the damage has already been done.
You should try to find a legal aid for free legal advice, laws differ from state to state. Legal advice will separate the truth from fiction on what the bill collectors have told you, bill collectors are not known to be the most truthful people to speak with about your account. They will tell you anything to make that collection. Scare tactics are another of there methods.
In the state I live, liens are not an option for credit card debt. You put up no collateral for the card, so there is nothing that a lien can be attached to. Garnishment is a possibility, but your yearly earnings have to be above a certain amount before this can be done.
If it does go to court, the only interest the Judge has is if you contest owing the money or not. This will probably be the only question you are asked. If the judge orders a garnishment (it will take a week or so to be notified by mail), it is up to you to have the paperwork filed to stop the garnishment if your yearly income fits the criteria.

If you owe the money and have, then you should settle. if you don't owe the money, then let them take you to court. If you owe the money and don't have the money, then you should be paying a small portion of the debt for a negotiated period of time (if you're already been served notice of the hearing date, then just appear and be cooperative to the judge for a reduced negotiated rate and terms).

This kind of question is asked all the time here, you are not alone in this.

First off your home will be unaffected, unless you have a variable rate interest loan of some sort that is linked to your credit score.

What follows is a shameless cut and paste from another of my answers that speaks to your question rather directly.

(begin cut and paste)
I see the range of answers here, from the judgemental to the slightly helpful. I will answer your question and go a step farther.

Here is the reality check:

Not much, if anything.

A small part of your wages can be garnished, but the process of doing this is very complicated and almost never done to my knowledge.

Credit card debt is what is called "unsecured" debt, that is it is not secured by an asset such as a house for a mortgage loan. In a secured loan, such as a mortgage, you legally pledge to give up a readily seizable asset like the house in case of default. This is why home loans, and other secured debt generally has a lower percentage rate, i.e. the loan is less risky from the lender's perspective.

Your credit card, on the other hand has no such guarantee on your part. If you don't pay, they have no assets that have been pledged to seize. This severely limits the actions that credit card companies can undertake.

Realistically here is what will very probably happen:

They will charge you a NASTY amount of fees and interest, and then after a certain period of time, sell the debt to a collection agency at a loss and write off your debt from their books.

The collection agency then will "step into the shoes" of the credit card company and do all manner of things to convince you to pay them back. The collection agency will also probably add some sort of penalty or interest to what they say they say you owe.

Ultimately, they can't do much other than pester you, although THAT can be HIGHLY irritating. Be sure to read your rights and what is legal at the links at end of this answer.

BUT

You did borrow the money, and ethically should make an honest attempt at paying it back. If you do so, you will be better off in many regards.

That said, you can at any point, negotiate the terms and settlement.

Given the choice between no money and some money, what do you think the credit card company/collector will choose?

With the knowledge that there is ultimately nothing they can realistically do to you, all the bargaining power, and ethical responsibility is on your side.

You might not be able to pay all of it back. This is ok, but do try to tell them honestly what you CAN pay back.

There are lots of good self-help websites that can teach you how to budget so that you can get an idea of what you can afford to pay back. Be realistic and honest, and make a good faith effort to pay off the debt, and you will be surprised at how quickly those penalties and interest rates go away as the credit card companies understand that it is better to meet your terms than not get anything at all.

Regarding garnishment. You will note that the law says "25% of disposable income". This is why garnishment is so rare: How do you prove "disposable" income in court? If you are in so much trouble with debt that you can't pay it back, chances are your "disposable income" is non-existant. 25% of nothing = nothing, and lenders know this.

BOTTOM LINE:

You can ignore credit card debt if you REALLY want to, but you should pay it back, and if you ask and negotiate honestly with them, can probably get terms you CAN afford.

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