Can a Judge Forgive Your Debt? And Can a Judge Send You To Jail?

Question: A friend of mine is disabled. Her only income is her Social Security disability benefits. She got into a lot of credit card debt, and one of the credit cards got a judgement against her in court.

A friend told her that because of her low income, the court might just maybe forgive her debt. Is this true?

And what would happen if other credit cards brought her to court? Can she go to jail because she can’t afford to pay the debt back? God, I hope not. Thank you for your help. We appreciate your kindness and your consideration with this question. Thank you so very very much.

— Dori in New Hampshire

Howard Dvorkin answers…

Let’s start at the end, because that last question is the easiest to answer: No, you can’t go to jail for unpaid debts. As long as you’re not defrauding your creditors or doing something illegal, trust when it says: “No matter what those debt collectors threatened you with, the police won’t be beating down your door.”

If you click that link, you’ll learn that the United States hasn’t imprisoned debtors since the 19th century. It’s no mystery, however, where that fear comes from: Unscrupulous debt collectors either imply it or come right out and threaten it. In 2013, the last year could find statistics, the federal government recorded more than 16,000 complaints that “collectors falsely threatened to arrest the consumer or seize their property for refusal of payment.”

With that out of the way, let’s talk about your friend’s debts.

Yes, it’s possible your friend could have her debt wiped clean. It’s called debt forgiveness, and it’s a powerful weapon. However, like all powerful weapons, it can injure more than just the target you aim it at. That’s why has a report called, A Realist’s Guide to Credit Card Debt Forgiveness.

I urge you and your friend to read it, because debt forgiveness has gotten a bad name lately. Why? Because bad people are advertising that they can clear all your debts with forgiveness — and don’t worry, there’s absolutely no downside! It’s amazing and only we know how to do it!

Of course, you’ll end up paying these middlemen a hefty fee for a shoddy service, and you might even end up worse than before you contacted them. Think of it this way: Would you pay hundreds of dollars to someone promising a guaranteed weight-loss plan that lets you eat as many cupcakes and potato chips as you want, with absolutely no downside?

If you want a serious diet plan, you should consult your doctor first. If you want a serious debt plan, you also need to consult a professional. I recommend calling a certified credit counselor at a nonprofit credit counseling agency, where your friend can receive a free debt analysis. From there, all the options can be explored, from a debt management plan to bankruptcy.

If you don’t know which nonprofit agency to contact, can introduce you to a reputable one. Bottom line, Dori: Your friend doesn’t have to go through it alone.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Ready to seek real credit card debt relief? can set you up with certified credit counselors who know how to help.

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Does Closing a Credit Card Account Hurt Your Credit Score?

Question: I have transferred all my credit card debt to a single no-interest card for 18 months. I have five other credit cards, and now all the other credit card companies are increasing the limits on the cards I just paid off. Which is better for my credit score: Cancel them? Hold onto them? Or charge a little and pay them off each month? I really don’t want to use them.

— Kim in Pennsylvania

Howard Dvorkin answers…

Here’s the short, cryptic answer: The best thing for your credit score might not be the best thing for you.

Money in a minute: What if your credit score was a pie?

If you picture your credit score in a pie, it’s divided into five slices. But each slide is not the same size.  The largest – a third of the entire size of the pie – is called payment history. That means, do you pay your bills on time? The next biggest slice is just another a third, it’s called credit utilization. That means how much of your available credit have you spent. As you can see, that’s more than two-thirds of the pie.  Three other slices are really small.

Length of credit history is only 15 percent. And at 10 percent each are credit mix and new credit. What’s this prove? Focus most on the two biggest slices and your credit score will be easy as pie.

Now the long answer…

How a credit score works

You credit score is based on five factors. One of those is called “length of credit history,” and it comprises 15 percent of your score.

If those five still-open credit cards have been in your possession for years, then they’re actually boosting your credit score. Here’s the problem, though: You need to keep using them for that 15 percent to keep kicking in.

That means you need to make small charges every once in a while — and then pay them off in full. How often? Once a month to be safe, once a quarter on the outside.

Of course, if this poses too much temptation to once again run up your balances, the safe bet is to close those cards. After all, the biggest chunk of your credit score is called “payment history,” and at 35 percent, if you’re late on even a few payments, it’ll swamp that 15 percent you’re benefiting from.

Need help with your credit card debt? can put you in touch with the credit card debt solutions you need.

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The second-biggest chunk of your credit score — at 30 percent — is called credit utilization. That’s the fancy way of saying, “How much you owe compared to how much you can borrow.” In other words, if you have $10,000 of available credit on five credit cards, and you’re almost maxed on them, your credit score will suffer mightily.

So as you can see, 65 percent of your credit score is determined by paying your bills on time, and keeping your balances low. That’s why it’s so hard to tell you if closing five mostly inactive credit cards is good or bad for you.

There’s one other factor of your credit score I even hesitate to mention, because it’s the most vague and one of the smallest slivers of the pie. It’s called credit mix, and it represents 10 percent of your score. In plain English, this means you have a variety of different credit lines.

Why is this important to lenders? It proves to them that you can pay back all different kinds of debt. In the case of these five credit cards, closing them would reduce the diversity of the debt you’re holding. So that’s another ding on the credit score.

If you’ve soldiered on through this long explanation, then you might see the wisdom in this advice…

  • Completely pay off the no-interest card within 18 months (or face sky-high interest rates).
  • Keep that card and 1-2 of the oldest cards you have.
  • Make small charges to each, and pay them off in full each month.
  • Close the other cards and don’t look back.

Within a few months, you should see your credit score creep up. Over many more months, if you keep paying off your cards each month, you’ll see it jump. Why? Because you’ll have a history of low balances paid on time, you’ll have a few very old cards, and you’ll be considered an excellent customer by lenders. You can’t beat that.

Want to know more? Check out’s report, How to Improve Your Credit Score Step-by-Step.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Can I Retire With $60,000 On My Credit Cards? Or Am I Doomed?

Question: We are about $60,000 in credit card debt. I am 69 and need to retire. I will have retirement from my job and $35,000 in my 401(k), plus Supplemental Security Income. My husband is 57 and will keep working. How can I retire?

— Kathryn in Hawaii

Steve Rhode answers…

Retiring isn’t the problem here. This is: Making ends meet for up to the next 20 years.

Having some government benefit and $35,000 in a 401(k) isn’t going to make retirement comfortable for you — or even manageable. It will be tragically impossible to survive on these finances alone, unless your husband has some magic retirement account that will help to make ends meet when he is able to finally retire.

When you say you need to retire and you are on Supplemental Security Income, that indicates to me you have some evolving medical issue. SSI is what’s known as a “means-tested welfare program.” That’s the official way of saying the government will provide cash and Medicaid to low-income senior citizens and the disabled.

I’m assuming this means that continuing to work may just not be possible for you, given your potential medical limitations. Maybe that’s why you have to retire.

Given your possible medical situation, your limited upcoming income, and your debt, the most logical solution here would be to shed the debt quickly with a consumer Chapter 7 bankruptcy. This type of bankruptcy is the fastest way to eliminate debt legally, and in about 90 days your credit card debt will be discharged. That will lower your expenses that you can’t afford in retirement.

Your credit card debt is probably from expenses you paid for in trying to get by in the past. It’s all too common for those Americans struggling to pay their bills to “float” the gap between income and expenses on their credit cards. Sadly, that catches up to you rather quickly…

[If you don’t know if bankruptcy is right for you, read Should I File for Bankruptcy.]

If filing for bankruptcy is the right option for you, can help you get the process started.

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…Retiring is the time to look forward and set yourself up for financial success. The ship has sailed to attempt to repair the past. Given what you’ve shared, you simply can’t afford to either pay the debt, now or in the future, and make ends meet on your new reduced income.

I would visit and review if you are eligible for any additional supplemental income, medical, or food assistance for your household. You should absolutely meet with a local bankruptcy attorney who is licensed in your state and discuss your situation. And you should inform your husband he is going to have to be the primary breadwinner for the foreseeable future.

This won’t be a pleasant experience while you’re enduring it, but once you’re through it, life should improve. I’d also recommend consulting’s Personal Finance section for advice on how to stay out of debt.

My fingers are crossed that your husband has a solid retirement account or pension that is going to help you survive when you are both unable to work.

Steve Rhode is known as the Get Out of Debt Guy and has appeared on FOX, CNN, ABC, NBC, and MSNBC giving money advice.

I Work Two Jobs, Yet I’m Drowning in Credit Card Debt. Why?

Question: I owe about $80,000 in credit card debt across something like 22 accounts. I make slightly above the minimum payment on each, but I’m probably going to be missing payments.

Between a full-time and part-time job, I make about $35K-$40K a year. I have a wife who makes a good salary, but she owes $1,000 a month in student loans. She’s in a debt management program, but I don’t know if that’s the best solution for me.

Our combined income a month (after taxes) is probably about $6,500. But my minimum credit card payments are probably above $2,000 a month, When you add the student loans, maintenance ($500), and all other expenses, we’re lucky to even make a dollar

I’ve been in contact with debt management and debt settlement companies, who have given me multiple offers. There are positives and negatives for both. I’ve also contacted a bankruptcy attorney, but my assets outweigh our debt due to my wife and I owning an apartment.

We currently have a negative balance in our account and after we get paid next week, we might still have a negative balance. I’m still not sure what is the best solution for me. Help!

— Michael in New York

Howard Dvorkin answers…

If you tell many people that your household income is $78,000 a year, they won’t imagine you’re mired in debt — especially when the median household income in this country is just over $59,000.

Sadly, what you earn has very little to do with how much debt you have. I’ve counseled millionaires who owed more than they could pay. Some have declared bankruptcy.

In your case, Michael, two debts are hurting you most. They happen to be the two most pernicious: credit card and student loans. Lucky for you, most of the country is suffering right along with you. That means it’s a big enough problem that the government and private sector have come up with big solutions…

Michael writes to me:

I have three incomes, no kids, but I have a lot of debt. I’ve learned a lot in my quarter of a century as a CPA and financial counselor. Maybe the biggest lesson is this, going into debt has almost nothing to do with how much money you make.

I’ve met millionaires who are actually paupers because they’re living larger but borrowing bigger. In Michael’s case, he’s not a millionaire but he makes well above the median income for U.S. households.

Yet, two things are dragging his marriage down: credit cards for him and student loans for his wife. They make $6,500 a month. Yet, they might have a negative balance this upcoming month.

Since he and his wife both have good incomes, no children, and no other real major expenses the first thing he should do is speak to a professional who can help him with a plan to pay down his debt. Why? Because he has options right now.

Thankfully there are programs specifically designed for credit cards and student loans. A debt management program can reduce monthly credit card payments by 30 or even 50 percent. Some of his debt may be eligible and better suited for a debt settlement program.

And the federal government has a slew of programs to reduce monthly student loan payments. How do you find help? It’s easy as visiting And don’t forget to sign up for our newsletters for more great advice.

What are your best debt relief options?

1. Credit counseling

This first step is the easiest. It’s also free. You simply call a nonprofit credit counseling agency and speak with a certified credit counselor. You’ll get a free debt analysis that’s so comprehensive, you’ll probably be surprised to learn exactly where all your money goes.

This is important, Michael, because you’re not even sure how many credit cards you have (“something like”) and how much debt you’re carrying (“about”). Your predicament requires specifics to solve.

Read more: What Is Credit Counseling And Why Do I Need It?

2. Debt management program

The best way to get rid of credit card debt is known as a DMP. It can reduce your monthly payments by 30 to 50 percent and freeze all your late fees.

Sound too good to be true? It’s not. Your credit card issuers will forgo much of their profits to get paid back the principle you owe them.

There are restrictions, however. For instance, you must cut up your credit cards — because you can’t ring up new charges if you owe a bunch of old ones. It can also take months or years to complete a DMP. Still, once you come out the other side, you’re financially free. Almost every DMP client I’ve known has said it’s worth it.

Read more: Debt Management Program Pros and Cons

 3. Student loans

The federal government is worried about student loans. Why? Because the total student loan debt in this country is approaching $1.5 trillion. That’s more than all the credit card debt out there — by almost a third.

There’s no DMP for student loans. Instead, there is a slew of federal programs that can cut your monthly payments, and in some cases, forgive the debt. What’s the catch? It’s the government, and the programs come with complicated names like “income-based repayment plan” and “income-contingent repayment plan.”

Knowing which plan is right for you requires some studying, but can introduce you to some experts who can help.

Read more: Federal Student Loan Repayment Plans

4. Debt settlement

Finally, you might have the option to pay less than you owe. That’s called debt settlement, but I only recommend it after you’ve exhausted the other possibilities above.

Why? Because debt settlement severely damages your credit score, it’s a complicated process, and there are unscrupulous people out there who will try to take advantage of you.

Debt settlement is a legitimate and powerful option, but it’s also a serious one. So you should consult an expert first. can help you.

Read more: Debt Settlement: What is It and How It Works

Bottom line, Michael: You’re not alone with this problem, and you’re not alone with the solution.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

How Does Accredited Debt Relief Work? Is It For Real?

Question: So I have $21,600 on 12 credit cards, which I ran up because I got killed in my divorce and needed to fix things around the house, from little to big — like a new HVAC. 

I just got back on my feet to where I don’t need to ring up more credit card balances, but I don’t make near enough to pay them off, either. I keep hearing radio commercials on the sports shows about debt settlement, and I see you guys offer that and debt management. 

Here’s the thing: They sound a lot alike, and they both seem shady. No one will help me get out of debt for nothing. What’s the catch with both of these things? And what’s the damn difference? And what’s it mean when you guys keep talking about “certified” this and “accredited” that?

— Simon in Pennsylvania

Howard Dvorkin answers…

This question is a version of one I’ve heard for two decades. It boils down to this: Are there people who really want to help me get out of debt? Or are they just looking to take my money and put me deeper in debt?

Here’s the short version of my answer…

How Does Accredited Debt Relief Work?

How does accredited debt relief work? Sometimes when I tell people about accredited debt relief I get a funny look.
When I explain they can get a free debt analysis from a certified professional I hear this “come on that’s too good to be true”.

When I tell them a credit counselor can refer them to a debt management program that can cut their total debt by 30 to 50 percent by reducing the interest and getting them on a strict payment plan they say “no way what’s the catch”.
And, when I tell them how debt settlement works they’re equally as stunned.
They are shocked to find out that some creditors will take just 40 or maybe 50 cents on the dollar of the full amount they owe.

When I tell them they’ll pay a fee that’s a fraction of what they’ll save they can’t even believe it. I tell them what I’m telling you right now, believe it, but do your homework because the key word here is accredited.

I don’t have to tell you there are shady people in every line of work but if you actually seek out an accredited debt relief agency that has an A rating or better with the Better Business Bureau and great client reviews you’re probably in good hands.

How do you find the right agency well that’s what is for. We’ll introduce you to the best experts out there and then you’ll believe.

Now here’s the long version. Let’s start at the very beginning of Simon’s letter.

Divorce and HVACs

Before we revisit Simon’s question about the validity of debt solutions, let’s take a moment to consider how he got into debt. Divorce is one of the major factors that put people in debt. (The others are accident, illness, and natural disaster.)

I meet clients all the time who are barely making ends meet, but when they come into some money, spend it on a vacation or a new car. When I suggest an emergency fund, I often hear, “But nothing bad has ever happened to me!” As Simon learned, it can happen to anyone.

Also, if you don’t know what an HVAC is, it’s a huge household expense I’ve written about before (How Can I Stop Sweating About My HVAC Loan?). The moral of the story: Everyone can and should have an emergency fund.

Debt settlement and debt management

While the two terms are similar, they’re actually quite different. For more on the topic, check out this reader question I answered last year: Is Debt Management Or Debt Settlement Better For Me?

Based on the limited information Simon provided, I can’t advise him which is better. In fact, that’s what a credit counselor is for — and that strikes at the heart of Simon’s doubts.

If you consult a certified credit counselor at an accredited credit counseling agency, you’ll learn which is best for you. Of course, as I said in the video, there are charlatans out there. You can spend an hour searching online and find reputable experts to deal with, or you can call — because all the experts we work with must sign our Code of Ethics.

That code obligates our partners to do right by you, and if they don’t, it obligates to fix it. Thankfully, we’ve never needed to invoke our Code of Ethics, because in five years, we’ve never had a serious complaint from a client.

So the bottom line, Simon: Do your own research or call us. Either way, there are good folks out there who will help you.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

If I Pay Off My Credit Card, When Will My Credit Score Go Up?

Question: I have a credit card that I can pay off in full, but how long after that will my credit score go up? I need to apply for a personal loan for school, but I need my score to go up before I do that. I know it varies by the source, but about how long after I completely pay off my card will my credit score reflect it? 

— Samantha in Tennessee

[ founder Howard Dvorkin]

A reader asks, I have the money to pay off my credit card now, but am not sure it’s worth it?

Well, Samantha it is most definitely worth it! When you pay off a credit card, your credit score improves. Why? Because five factors determine your credit score, and one of the biggest is the amount of debt owed. It is 30 percent of your overall score and the biggest chunk is payment history, which is short for – I pay my bill on time.

But more important than your credit score going up is that your debts are going down.

The AVERAGE credit card interest rate TODAY hovers around 17 percent. If you put all your money in the stock market – obviously a bad idea – you’d be hard-pressed to earn 17 percent on your investments. But if you pay off a credit card bill that has a monthly balance of $5,000, you could save up to $85 a month.

That’s $1,000 a year! And you don’t have to do anything to save that money, other than pay off a debt right now. If you don’t think you can afford to do that, call today. We know how to make it happen.

Howard Dvorkin answers…

Short answer: There’s no way to know for sure, because the three credit bureaus — Equifax, Experian, and TransUnion — that decide your credit score have never explained their process in such detail.

Shorter answer: About 30-45 days, give or take. Most credit card companies update their account information once a month.

Longer answer: Depending on your circumstances, paying off your credit card won’t make much of a difference for a personal loan — which might be an unwise decision, anyway.

Let’s break this down.

First, there are many ways to boost your credit score. Check out How to Improve Your Credit Score Step-by-Step. If you really need to raise your score in a hurry, check out all your options.

Second, your credit score is based on five factors, but all of them aren’t equal. For instance, “payment history” is the biggest at 35 percent. That’s just a fancy way of saying, “I pay my bills on time.” The next biggest is “debt owed” at 30 percent. So paying off a credit card will definitely help you, but it’s still only 65 percent of the total.

It can also cost you, because 15 percent of your score is “length of credit history.” The credit bureaus like to see that you can maintain long-term relationships with your creditors. So in this case, if you pay off the card and close the account, that’s bad. You can, of course, leave the account open. Learn more at Understanding Your FICO Credit Score.

Third, and perhaps more importantly toward your overall financial situation, I worry about you taking out a personal loan to go to school. I don’t know if you mean college for the first time, or back to school after working for a few or many years.

Either way, I’d first suggest you explore other options, including scholarships. If you apply for many of those, you’re instantly eligible for the Scholarship For Aggressive Scholarship Applicants, which is awarded every two months.

All that said, I feel very strongly about this: Anytime you can pay off a credit card and still maintain healthy finances, that’s one of the absolute best tactics for achieving financial freedom. So if you can afford to pay off a credit card, doing so is its own reward.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

I Know There’s A Judgment Against Me For Credit Card Debt, But There Might Be More. What Can I Do?

Question: A few years ago, we found ourselves in a very tough financial situation. So we made the decision to prioritize our bills.

Unfortunately, we fell behind in our credit cards. As time passed, we were able to settle with a few of the cards, but there are a few left that are in limbo somewhere. I know of one that received a judgement against me, and I think there are two more.

The thing is, I haven’t heard from them and I’m not sure what to do. File bankruptcy? Hire a debt settlement company? Or contact the creditors directly?

— Ullisses in Illinois

[ founder Howard Dvorkin]

This letter is REALLY revealing. Not for what the writer says, but because of what he doesn’t know.

It’s very common for smart Americans to forget to ask basic questions. Like:  How much debt do I owe? Who do I owe it to? And what’s the deadline before bad things start to happen?

Look, I get it. Figuring out your finances is way down the list of fun activities. I’ve been a financial counselor and author for more than two decades, and even though this stuff fascinates me, I know other people look at budgeting like they look at flossing: It’s important, but it’s boring.

Here’s the thing: No one will help you floss your teeth, but there are professionals who can help you with your finances.  It is important to get a debt analysis so you can learn what you need to do. And it’s even easier than flossing, because all you do is call

If you want to get out of debt, knowledge is powerful.

Howard Dvorkin answers…

My answer is going to be general because your question is general. In other words, I can’t be specific because you’re not completely sure how many credit cards you still have open, and which ones have judgments against you.

That said, I can offer you one specific and urgent piece of advice: Pull your credit report. Learn how here: Where and How to Get Your Free Yearly Credit Report. However, I’ll tell you to ignore one part of the advice in that report.

Because there are three credit bureaus — Equifax, Experian, and TransUnion — the law says you’re entitled to one free report from each bureau every 12 months. and other experts advise you to pull a report from one bureau every four months. That let’s you notice any irregularities in a timely fashion, then repair your credit either by yourself or with the help of others.

In your case, I’m advising you to pull all three reports right away. Your priority is finding out exactly what you owe and to who — and soon.

In my experience, if a credit card company went to the trouble to take you to court and get a judgment against you for unpaid bills, you owe at least $5,000. Any less, and it’s not really worth the trouble. (Although don’t misjudge what I just wrote: Your card issuer still wants and expects to be paid back. They have other options.)

I’m concerned that you “think” you might have more judgments against you. So I also urge you to contact your creditors right after you pull your credit reports. Rest assured, if you owe them, they’ll be able to tell you.

In these cases, I sometimes hear this faulty logic: “Howard, they haven’t contacted me, so if I ignore it, I don’t have to pay!” While it’s true that there’s a statute of limitations on credit card debt, playing that waiting game is dangerous. First, each state has its own rules, which you can see on this map.

Right now, I’d recommend against debt settlement, which has its own set of drawbacks. While you need to pursue bankruptcy at some point, that’s the very last step. Your first ones are to simply gather all your facts. Once you do that, I’d consult a certified credit counselor for a free debt analysis. You can reach one by calling at 855-996-9980.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Quirky Questions From Perplexed People In Debt

If you had $18,000 to your name and had a credit card debt of $16,000 would you pay off the credit card?

— Matt in Michigan

Are there any grants to help me get out of credit card debt?

— David from South Carolina

I have three debts of $17,300, $4,500, and $4,000. Which one should I pay off first?

— Paula in New Mexico

How can I pay off $63,000 in credit card debt when my income is now 30 percent less than when I accrued that debt?

— Michael in Maryland

[ founder Howard Dvorkin] Every month on, I answer questions from our readers, but some questions lack key details that would lead me to give an informed answer.

Sometimes I get asked, “How can I pay off $20,000 in credit card debt?” — and that’s the whole question! The answer depends on so many other factors. How much do you earn? How much other debt do you have? What are your other major expenses?

When there are so many questions, you really need a one on one consultation — and that is what is for! can connect you with a vetted agency, where you’ll get an analysis of your situation. I urge you to do this — because here’s the good news. Whatever financial crisis you face, trust me – many others have stared down the same problems. And even better, many have triumphed over them. Because help is available. Right here at

Howard Dvorkin answers…

Four years ago, I began answering reader questions here at The very first one pitted a husband against a wife over the issue of paying down a mortgage faster to save money. Along the way, I’ve answered questions on topics ranging from credit cards to student loans to identity theft. There have also been offbeat questions like, Can I shop for Christmas presents on Dec. 26?

Sadly, I get many questions I can’t answer — not because I’m stumped, but because I don’t have enough information. Several recent ones are above. While I can’t specifically help these individuals, I can give them all some good advice, which I’ll mention at the very end…

If you had $18,000 to your name and had a credit card debt of $16,000 would you pay off the credit card?

The simple answer is: No way. Of course, I don’t know what your monthly income is. That affects the answer. Also, do you own a home? Is it mostly paid off? While warns against a home equity loan to pay off credit card debt, it is an option of last resort.

(As we’ve reported, “Using home equity means the financing is secured using your home as collateral. If you fall behind and default, you risk foreclosure. Increasing your risk to lose your home just to pay off credit card debt usually isn’t worth it.”)

Are there any grants to help me get out of credit card debt?

No. You might be thinking of federal student loan programs, in which the government offers several ways to reduce your payments. However, the government has no plans to do that for credit card debt.

I have three debts of $17,300, $4,500, and $4,000. Which one should I pay off first?

All other factors being equal, you should pay off the debt with the highest interest rate first. That will save you the most in the long run. Whichever you pay off first, don’t miss any monthly payments. For a real solution, see below.

How can I pay off $63,000 in credit card debt when my income is now 30 percent less than when I accrued that debt?

I don’t know what your annual income is now, but unless it’s six figures, the answer is: You probably won’t be able to pay off this debt. For you and the others posing the questions above, the only truly helpful answer is credit counseling.

When you call a nonprofit credit counseling agency, a certified credit counselor will drill down on your personal situation and lay out all your options. Best of all, this debt analysis is totally free.

You might find that a debt management program will slash your monthly credit card payments by up to 30 or even 50 percent. You might even need to declare bankruptcy, which is scary, but there’s also counseling for that.

Here’s the big takeaway from today: Whatever your problem is, there’s an expert available to help you. It might not be me, if your question is too short — but it is someone here at

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

How to Answer a Civil Summons for Credit Card Debt


Get basic instructions on how to answer a civil summons for credit card debt.

How to Answer a Civil Summons for Credit Card Debt

Important note: This page provides general tips on how to answer a civil summons for credit card debt. Please be aware that articles on are only intended to provide basic information and should not be used as a substitute for qualified legal advice. recommends that you should always consult a licensed attorney if you have legal questions or face legal action.

Being in serious debt can be scary. While it can be easy to throw away bills and ignore calls from debt collectors, there are consequences for not paying what you owe. When a company has exhausted its resources trying to get you to pay a debt, it will either try to sue you for the debt or sell the debt to another company. This company can also sue you in order to force repayment.

How do you know you are being sued for a debt?

Civil summons can happen when you default on an unsecured loan or fail to pay a credit card and it gets moved to charge off status. The debt is basically considered a loss by the original lender or creditor.

When you are served summons for a debt, someone will usually come to your house or work, ask you for your name, and present you with a civil summons. At this point it is best to not freak out and understand that it’s time to face your debt.

Look over the summons and see who is suing you to try and collect a debt. Is it a credit card company, a company that purchased the debt, or another creditor you are in arrears to?

Once you know this, you can start collecting any information and documents you have on the debt, including if this debt is actually yours and how long you’ve owed the money. You should also assess your current financial statements to understand your budget and what the lawsuit or a settlement may cost you.

If you know that the debt is valid, check your statements to see when the last time you paid anything to the creditor. It’s important to look at how old the debt is that is trying to be collected. States have certain rules on how long collectors can try and collect on a debt; this is known as the statute of limitations. Once a debt is past the statute of limitations, collects cannot sue you to collect a debt.

One law office provides a pretty hilarious example of what one of these summons will look like.

Three ways to answer a civil court summons for credit card debt

When you’ve been served with a lawsuit for your debt, there are three things you can do:

  1. Ignore it
  2. Try to settle the debt
  3. Go to court

While it is an option, DO NOT IGNORE THE LAWSUIT! Ignoring the summons sets you up for a rash of other issues, including wage garnishment and bank account levies and property liens. If you fail to answer by ignoring the response, a verdict can be entered against you. Ignoring a lawsuit will not protect you from the negative outcomes you can face in court!

So, you can either settle or go through the court system. Ideally, you should try to settle first and go through the court only if that fails. However, you have a limited amount of time to answer a civil summons. So, look on the summons to see when you need to file a response. Make sure to handle the case before that date to avoid more legal issues.

Step 1: how to answer a civil summons for credit card debt by settling it

First, you should try to contact the creditor listed on the summons and reach a settlement without having to go to court.

Before you call, look through your finances and create a budget. How much do you owe and how much could you afford to pay? Sometimes creditors will accept a reduced amount of what you owe, usually in a lump-sum; some may be willing to accept a small series of payments. Settlements typically run from 40 percent to 80 percent of what you owe, depending on how old the debt is and who owns it.

If the debt still belongs to the original creditor, expect to pay more in the settlement. If the debt has been sold to a collector, they may take a lesser amount, since they purchased the debt at a discount. Looking at your budget, can help you determine your stance during the negotiation. Have an amount you are willing to pay ready when you call and work from there with the creditor.

If the creditor won’t speak with you, have this call with the attorney listed on the lawsuit instead.

Out-of-court settlement is usually the best option. If you settle the debt out of court, the creditors and their lawyers can withdraw the case. You can avoid the hassle of filing an answer formally with the court.

Need help with debt settlement negotiation? can connect your with accredited debt settlement attorneys now.

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Step 2: How to answer a civil summons for credit card debt by filing an answer with the court

If trying to reach a settlement does not work out or you decide you prefer to go to court, you must file an answer to the served summons. Note that you will need to file within 30 days of receiving the letter, including holidays and weekends, according to the Judicial Counsel of California. This time limit can vary depending on where you live. So, make sure to check your summons for the exact timing that your state requires.

Within the summons package you received should be a complaint with a list of allegations against you. It’s your job to then “answer” these allegations in writing and submit them to the court before the date listed. Within the allegations will be a section stating that you are the owner of the debt and what the amount of debt is, among other things.

This is where it is again important to have your documents handy to look through the information you have. This way, you can either confirm or deny the allegations entered against you, based on the information you have.

In your response, you will need to either affirm, deny or lack knowledge of the claims against you. You can also admit a claim is true, but state there is another reason you should not be responsible for the debt; this is called “admission with defense.” When writing your answer, make sure to refer to yourself as the defendant throughout. Your answer should be typed and printed.

Deciding whether to affirm, deny or reply lack of knowledge to a civil summons

When to affirm an allegation

If you know the answer is true, you need to answer factually in your response. For example, if the summons complaint, paragraph one alleges you live at 123 ABC Lane and you do in fact live there, you need to respond within your answer of paragraph one that you admit or confirm you live at that address.

It can be as simple as writing “Admitted” next to the number one in a bulleted list, or you could choose to write out a sentence.


  1. Admitted
  2. Defendant admits he resides at the residence listed on the complaint.

Not admitting something that is known to be true can lead to larger legal issues once the case has begun.

When to deny an allegation

If it happens that an allegation is completely untrue, you can deny the claim in your answer. Only deny if you are 100 percent sure it is untrue. If you aren’t sure, you should instead reply that you lack the knowledge to admit or deny this claim (see below). Only deny a claim if you can prove it is not correct.

You should use this option  if you believe that the claims against you are for a debt that is not yours. For example, if you were an authorized user and didn’t spend the amount listed, but are being charged with it.


  1. Denied.
  2. Defendant denies using credit card at Bed, Bath and Beyond.

When to reply “lack of knowledge”

When you are unsure of an allegation made against you, such as the exact amount you owe or the last time you paid the creditor, you can answer that you have a lack of knowledge regarding the claims.


  1. Defendant lacks sufficient knowledge to confirm or deny the information within this paragraph and therefore denies the allegation.

If an allegation contains claims that can be a combination of these answers, combine them to compose the best response.


A paragraph may claim you are cardholder of an account and that you owe $5,284.73. If you agree that you are the cardholder but deny or lack the knowledge to confirm the amount, you can answer: Defendant affirms they are the cardholder but lacks the knowledge to confirm the other allegations within the paragraph and therefore denies them.

When to use admission with defense

An admission with defense is important if you plan on fighting your debt in court. In your reply to the summons complaint, you admit to the allegation, but with a defense. When it comes to debt collection or credit card debt, these defenses would be:

  • The debt is not yours
  • That you have paid the debt already
  • The statute of limitations on the debt ran out

In these cases, you admit or affirm the paragraphs and include your defense within you answer to the summons complaint.


  1. Defendant admits to being the cardholder of the credit card ending in 2345 but contends that there is a failure to name the essential party as they are not the primary cardholder.
  2. Defendant admits to the debt but asserts it was paid on this date. (You would need to specify when you paid the debt.)
  3. Defendant admits to being the owner of the debt; however the defendant contends that the statute of limitations in the state has run out. (You would need to specify which state your debt is in and where you are being sued.)

The New York Office of Court Administration offers a full list of possible defenses as well. Complete your answer by closing the letter with the date you submitted it and put a line for your signature.

Tips for submitting your answer to the court

  • Print out your answer, sign and date it
  • Then make two copies — one for the court and one for the attorney of the creditor.
  • You will need to go down to the courthouse to submit your original answer to the clerk of the court.
  • Know that you will likely have to pay a fee to file.
  • While you are there, have them “file stamp” your other copies so that when you send one to the lawyers, they know you filed it.
  • Keep one for your records, and mail the other stamped response via certified mail to the attorneys hired by the creditor.

Are you required to hire an attorney for your debt summons?



In most cases of legal matters, it’s always recommended that you hire a state-licensed attorney. Going through legal issues without a lawyer can be tough to navigate. However, often the reason you receive a civil debt summons is because you couldn’t afford to pay. Hiring an attorney is an expense that many in this situation can’t afford.

The good news is that many state-run government websites offer legal help and advice for these situations. There are also law organizations that offer pro-bono law assistance for low-income individuals. It may be worth hiring the services of a lawyer just to understand your rights in your state. They can also answer any potential questions and explain possible outcomes based on your particular case.

Don’t leave credit card debt to turn into a civil court summons! can help you solve debt problems before they become legal problems.

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How Can I Wipe Out $19,000 In Debt Without Selling My House?

How Can I Wipe Out 19k in Debt Without Selling My House

How can I wipe out 19,000 in debt without selling my house? A reader has many beautiful things but also an ugly amount of debt.

When people ask me for financial advice I usually recommend many things: Credit counseling, a debt settlement program, and yes sometimes even bankruptcy. But I also spend a lot of time warning people what not to do when people are drowning in debt. It’s like they’re literally drowning.

They’ll reach for anything they think will help them stay afloat. Unfortunately very bad people out there know this. They dangle too good to be true schemes that can actually get you in deeper debt. In Anita’s case the worst thing she can do is take out a loan against her house and use it to pay off her unsecured credit cards.

That’s because if she fails to pay back to the home loan she could lose her house, but if she fails to pay back the credit cards she won’t be homeless. Instead a debt management program, or even a settlement program will probably work best for her.

It takes a little longer but slow and steady not only wins the race but it wins your financial freedom for the future.

Question: My neighbors think I have money because I have the biggest house on the block. But actually, I owe $19,000 on my credit cards!

After my divorce, I got the house. I can easily pay the mortgage, but my problem is living expenses. I have a job as an office manager, but it barely pays my living expenses. The health insurance isn’t very good, and I have several prescriptions that cost me $220 a month. (I was in an accident several years ago, and now it’s led to a chronic illness.)

Do you have any advice? Please don’t tell me to sell the house, because the mortgage payments are actually less than what rent would cost me. (We bought the house in 1999, when property values weren’t so high in this area.) 

I’m 67 years old and am worried about my future. 

— Anita in Massachusetts

Howard Dvorkin answers…

You’re facing three of the four major causes of debt, Anita. Those are: divorce, natural disaster, illness, and accident. So first of all, I want you to take a moment and be proud of yourself. You’ve persevered, and now you’re seeking professional help. Those are two admirable traits.

Now let’s dive into your situation.

Prescription drugs

This wasn’t the first item on your list, but it’s the easiest to check off. You can likely save half on your prescriptions by using a free service called GoodRx. If that sounds too good to be true — and GoodRx insists the savings can reach 90 percent — it’s not.

The company was founded by some of Facebook’s original employees and is a deceptively simple business model: Crowdsource many prescription drug users, then negotiate with the drug companies for volume discounts. Read’s report on GoodRx.

Credit card debt

The next easiest money problem to resolve is actually your biggest: that $19,000 in credit card debt. I can’t say for sure, but you might be a candidate for a debt management program. These programs can cut your monthly payments by up to 30 to 50 percent while avoiding fees.

Again, it might sound too good to be true, but DMPs (as they’re called) have been around for decades. I can’t tell you for certain if a DMP is right for you, because that requires a more detailed debt analysis. Thankfully, you can get one for free from a certified counselor at a nonprofit credit counseling agency. How do you find one? can hook you up with one that’s A-plus rated by the Better Business Bureau.

What not to do

I believe these two steps might be enough, but I want to warn you against doing too much. If you ask less-reputable people for help, you might be told, “Take out a loan against your house and pay off all your debts!”

That’s a terrible idea.

As has reported

The problem with that is that you effectively convert unsecured debt into secured debt. Credit cards are usually unsecured. As much as debt collectors may threaten, they can’t take your property without a court order. On the other hand, if you fall behind on your home equity loan payments, the lender will start a foreclosure action. If you don’t catch up, you can lose your home.

Explore GoodRx, call a credit counseling agency, and read’s report, Money Management for Seniors. You can do all that in one day — and by tomorrow, you’ll be smiling.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.