Harassment from a loan company, I have no income

I have no income. They took me to court but will not take any payment less than my original payment.

If you have loan debt this is a civil obligation, and you should repay it. If you fail to repay the debt the lender has the right to sue you in civil court. If they win a judgment against you, they may have the legal right to garnish your wages or to levy your bank account, but there will be no criminal penalties. Creditors may threaten criminal actions if you do not repay the loan within a short deadline, but defaulting on a payday loan is not a crime, and you will not be prosecuted, arrested, or put in jail for check fraud, or breach of contract.

Lost a judgment in court what are my options?

It is illegal in every state for a creditor to make false claims to collect a debt, but they do have a right to collect the debt through a civil action. If you have not been sued yet it's important to keep the lines of communication open between you and the lender. Lenders often will negotiate with debtors to avoid a lawsuit in court, which costs them time and money and requires a great deal of paper work. Civil actions are generally the last resort for most lenders. To avoid a legal battle, contact your lender and find out if there is a payment arrangement that each of you can agree to so you can avoid a civil lawsuit.

What if the lender will not negotiate?

If you have a payday loan, experts suggest you might make more progress if you try to contact the payday corporate office. In some cases the corporate office may be willing to accept a payment option that an individual store will not accept.

If the creditor has already taken you to court and won a judgment, however, they may not be willing to negotiate. So what do you do if you do not have any money to repay a loan but you have lost a judgment in court? In this case, you are considered judgment proof, which means you have no wages to garnish, no property to attach a lien to, and no bank account to levy. The judgment against you is basically worthless. So although the creditor may have won in court, it is likely you will not be able to repay them.

What happens to the judgment?

The judgment will remain valid for several years and may eventually expire or lapse. In some states, a judgment is effective between five to seven years. In other states, like New York, it can be twenty years or longer. Some states also allow creditors to renew their judgments, which means they could file the proper paperwork and keep the judgment valid, in some states this action can be done indefinitely.

If the judgment remains and you eventually have wages or you become employed, the creditor can start garnishing your wages. They also may be able to garnish other types of income such as governmental payments or tax refunds.

So what do you do if your creditor won't negotiate with you? If there is a judgment and you have nothing for the creditor to garnish or levy, you don't have to do anything. But keep in mind as soon as you have income it is likely to be garnished.

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