How do I set up a payment plan to pay off civil judgements against me to clear debts off of my record?

I have 3 small claims/civil judgements against me in which I owe parties money. I am in the process of obtaining my real estate license and need to make restitution to all parties involved. I am not sure that these would prohibit me from obtaining my license but more importantly I am curious to know how I can set up a legal binding repayment plan that the court would accept as satisfactory. Also, is it possible to have these removed from my record once it all taken care of.

Asked on March 18, 2012 under Bankruptcy Law, Virginia

Answers:

Darren Delafield

Answered 8 years ago | Contributor

A Virginia General District Court Judge does not have authority to order a repayment plan. Most loans have an acceleration clause which means that you forfit your right to make monthly payments once you breach the contract.

A Virginia General District Court Judge can limit the involuntary seizure of your wages to 25% of your take home pay for most debts. Creditors with claims for taxes and child support can seize more than 25%.

Congress created Chapter 13 bankruptcy so that a Federal Bankruptcy Judge could set a reasonable repayment plan. A bankruptcy judge can order a repayment plan.

If you file a Chapter 7 bankruptcy, you can set your own repayment plan for a discharged debt. You are not required to make any payments on a discharged debt. Any payment is 100% voluntary on your part and does not grant any rights to the creditor of a discharged debt.

If you do not file bankruptcy, you can negotiate a written repayment plan with the creditors, but the creditor must agree. The written agreement is a new contract and is enforeable in court. It is for this reason that most creditors refuse to reduce any repayment plan to writing. The creditor will likely accept monthly payments, but you are at the mercy of the creditor.

Once the debt is paid, the creditor is required by law to notify the clerk of court that the deb is discharged or satisfied. If it fails to do so, you can send a warning letter. If it still does not notify the clerk, you can file a law suit and the Judge can award attorney fees and statutory damages.

See http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+8.01-455


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