Debt collector keeps raising my payments

by Robert
(Auburn, Alabama)

I live in Alabama. I have been making monthly payments every month to my creditor's lawyers. At first it was two hundred and seventy-five dollars a month. I was to contact them every six months to talk of an increase in my payment. The next time I called them, they upped my payment to three hundred and seventy-five dollars.
I am to call them again in August, and I am almost sure that they will want four hundred and seventy-five dollars then. I see no end in site for them increasing my payments every six months. The problem is that I am on a fixed income and I cannot keep increasing my payments to them. I am afraid of garnishment of my wages or some other form of harassment if I don't keep increasing my payments.
The amount I owe is large, around $24,000, because interest kept accruing during my protection from a debt reduction company.
How do I talk to the lawyers to get them to accept a payment that does not go up a hundred dollars every six months? Or is too much for my budget?

Comments for Debt collector keeps raising my payments

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Jun 25, 2011
Debt collector keeps raising my payments

There are a couple issues to consider related to your situation. First, did you get an agreement in writing from the lawyers stating the amount of your monthly payments? If yes, does the agreement permit them to raise your payments and if so, on what basis? When you negotiate a payment plan with a debt collector (or creditor) it's important to get all of the terms of your plan spelled out on paper and you should not agree to the plan unless you are comfortable with the terms.

Second, you did not indicate what the source/s of your income are although you did say that you are on a fixed income. If your income comes from Social Security, SSI or a pension of some sort, and the lawyers end up suing you over your debt and get a judgment against you for the amount that you owe, they cannot take that money. And, assuming you have no other assets they could take from you, then you are judgment proof. In other words, it would be a waste of time for the lawyers to sue you because they would have no means of collecting on the judgment should they win their lawsuit.

Finally, given your situation I would definitely contact a consumer law attorney who helps consumers resolve their debt collection problems. The attorney can look at your finances and tell you what to do in light of your situation. The attorney may recommend that he/she contact the lawyers on your behalf in an effort to stop what is happening; the attorney may tell you that you have grounds for a lawsuit; and/or the attorney may suggest that you consult with a bankruptcy attorney to find out if bankruptcy might be a good option for you. Filing for bankruptcy would immediately stop all efforts to collect from you and would probably wipe out the debt that you owe. Your initial appointment with a consumer law attorney should be free.

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