I am a sole proprietor of a landscaping business. I have a question of legality on a matter. A equipment company that I deal with has charge...

Question

I am a sole proprietor of a landscaping business. I have a question of legality on a matter. A equipment company that I deal with has charged on my check card(credit card) 1,988.27$ back before christmas 2010 to pay on my acct that was never authorized. Last summer I had to call in and get a repair order done and they needed me to pay over the phone for the service with my card. This is the only time i have given them my credit card number. I owe the money on the acct so I wasn't sure if it was legal and I know I didnt authorize it. It really upset me because it wiped out what I had saved for christmas for my 3 young boys and wife. Now I am being called by their attorney and threating to sue if I dont pay remainder of acct imediately. My question is why aren't they charging my card again to pay on the acct. I think they would have charged more but my card has a limit of 2,000$ per day, somehow they knew that??? Please help.

Thank you,

Steve Stoner

Answer

Steve,

I am sorry but I don't quite follow what is going on here. What do charges last summer have to do with actions at Christmas?

How much was the bill? How much has been paid? Lawyers don't generally threaten to sue unless they are a debt collection law firm and even then they do not threaten. They ask you to pay and advise you that if the account is not paid then their client will sue. But this is not a threat. Creditors have a right to sue if you owe them money.

You have a couple of options. If the debt is very large and there is no way you can pay, you can file bankruptcy. If bankruptcy is not an option, something can be worked out - before, during or even after a lawsuit.

Debts can be settled, usually for between 50% and 80%, but it depends on the creditor. I have some creditors who will accept 15% of the debt and others who will not take a penny less than 100%.

The more you can pay in a lump sum, the more willing creditors generally will be to settle for less. However, if you want to pay over time, creditors want the whole balance and payments generally are 1% to 2% of the debt (some creditors want more). If you don't have it, save up until you do.

If you would like me to give you more specific advice, please email me at [email protected]/* */

I will try to give you more specifics after you provide more information as it may alter the above advice. If you want me to negotiate a resolution of the debt, I can do that for a fee, but first I need to know more about what is involved,