Still pay bill after receiving summons for small claims?

by Danielle
(San Jose, CA)

I just received a summons for a court date for small claims court (I'm in CA) for the end of January. This was for a personal loan, and I am only 2 months behind. The other day when I talked with the company, they threatened wage garnishment and I told them I could pay by the end of the week 1 month, then this week would get caught up. Well I paid the 1 month (September's payment) and was just about to pay the October payment when getting the summons today. So technically I am only about 2 weeks behind now, since the payments were due on the 20th of the month. So since they've gone ahead with the lawsuit, should I even bother to keep paying the bills to come, and can they keep adding on late fees if I stop paying, since they filed suit for the $2044 balance?? Also, in court, will they automatically do a wage garnishment or will I be able to make monthly payments from there? This is the farthest behind I have gotten on this bill, it has been paid every month, just sometimes after the due date and another bill had been issued.

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Jan 31, 2012
Still pay bill after receiving summons for small claims?

Yes, you should continue paying on the debt because your payments will show the court that you have every intention of paying what you owe. Also, if you don't pay the debt, fees and interest will accrue, increasing the total amount of your debt.

It's possible at your court hearing that you and the creditor will be able to negotiate a payment arrangement you can afford so you can keep up with your monthly payments, or that the creditor will agree to let you settle the debt, which would mean that you would be able to pay it off in full for less than the total amount owed. The judge may also get involved in the negotiations to help ensure that you and the creditor work something out.

If you and the creditor are able to reach an agreement regarding how you will repay your debt then you will avoid having a court judgment against you, which will be very damaging to your credit history and FICO score. If you do reach an agreement, be sure to get all of the terms of the agreement in writing before you begin paying on it.

If you can't resolve your debt problem in court and the judge awards the creditor a judgment against you, the creditor can then ask the court for permission to collect on the judgment by garnishing your wages, taking money from your bank account or putting a lien on an asset that you may own.

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