A Few Questions

[ManFromMunchkin]

Greetings:

I have a few questions to ask about a Chapter 7 bankruptcy filing I am about to undertake.

I have already had one free preliminary consultation with a bankruptcy attorney. He informed me that I do qualify to file for Chapter 7 bankruptcy.

I will not be able to pay my bankruptcy lawyer his fees, not even a dime, until I receive a check for some work I did in about two weeks from now. Then I will be able to pay him in full.

The problem is that, since I had this initial consultation with my bankruptcy lawyer, I received a "Warrant In Debt" to appear in court for one of my creditors. The date of this court appearance is about one week from now.

On the back of this warrant it says the following:

"I certify that I mailed a copy of this document to the defendants named therein at the address shown therein on 06/11/2007."

This warrant was not "mailed." Instead, I found it stuck in my door, about two weeks after the date named above.

Somebody could have easily walked by my door and snatched away my warrant. Then I would have never known about this warrant and court date.

Question: Can this invalidate this warrant?

I will be unable to appear in court to respond to this warrant. The court is located about 200 miles away from my residence.

Question: Is there anything I can do to receive a continuance or delay of this court date until I am able to pay my bankruptcy lawyer?

When I am unable to appear in court on the designated court date, I assume that the judge is going to rule for a judgement in favor of the creditor.

Question: After the judge makes this ruling, how many days does it usually take before I begin to discover money being missing from my checking account, or my car missing (which is paid for), or any other missing property which has been seized by my creditor?

Question: After I pay my bankruptcy lawyer in full, which I will be able to do in about two weeks from now, can this judgement be reversed?

If so, will my property still be protected?

Once again, this court date is about one week from now.

I can't afford to pay my bankruptcy lawyer a dime until two weeks from now.

I am looking at a period of about one week, between my court date, and the approximate date that I will be able to pay my bankruptcy lawyer in full.

Is this first Warrant In Debt pretty much a "lost cause" at this stage of the game? Note: I do have other creditors. However, none of them have sent me a warrant yet.

If so, will I begin to notice money missing from my checking account, or other missing property, immediately?

If not, do you have any advice for me as to how I should proceed?

Thanks in advance.

Munch

[JRScott]

Okay I've read over this and really it depends a lot on your local laws.

You say you can't pay the lawyer any of his fees. Is there any way that you might could borrow the money from a friend to pay a retainer fee if he offers that service? That would help.

You're almost against the wall here, however how garnishment of your wages occurs is dependent on local rules. I assume this isn't the creditor where your bank account is or else they would have already seized the funds.

In Bankruptcy you can have Judgements discharged. Judgement is a non priority non secured debt.

They cannot seize your car, especially if you owe someone else for it.....(if this is the vehicle creditor then they'd be more likely to repo the vehicle than to seek wage garnishment).

Why can you not appear at court?

The first step might be to contact the clerk of court where the suit is and ask if he can continue the case to a later date. Explain the situation and why you cannot attend on the date stated.

If you do not appear at court and do not get another date then yes the judge will find against you. However that's not a lost cause. He'll find against you and then they'll start whatever local steps are necessary for wage garnishment.

Your lawyer will know the proper places to put lawsuits and judgements, but it is very possible to have such judgements discharged.

[ManFromMunchkin]

Hello JRScott,

Thank you very much for replying to my questions.

I will reply to some of your statements in sections below:

You wrote:

"You say you can't pay the lawyer any of his fees. Is there any way that you might could borrow the money from a friend to pay a retainer fee if he offers that service? That would help."
_____

I heard somewhere that this is frowned upon by a lot of bankruptcy trustees and that doing this could hurt my case. As I understand it, if I borrow money for the purpose of paying my bankruptcy lawyer, then I will have created yet another creditor, which I will have to list when I complete all of my paperwork.
_________________________________

You wrote:

"You're almost against the wall here, however how garnishment of your wages occurs is dependent on local rules. I assume this isn't the creditor where your bank account is or else they would have already seized the funds."
_____

You are right. The creditor is with a bank (via a credit card) that is a different bank than the one where I have my checking account.
____________________________________

You wrote:

"In Bankruptcy you can have Judgements discharged. Judgement is a non priority non secured debt."
_____

Here's another question. Suppose I have a judgement ruled against me, and the creditor garnishes my wages or take the money out of my checking account. If I file for bankruptcy afterwards and get the judgement discharged, then does the creditor have to pay me the money back?

My main worry is that money will wind up being taken from my checking account within one day to two weeks after the judgement, before I am able to pay my bankruptcy lawyer and get my case started.
___________________________________

You wrote:

"They cannot seize your car, especially if you owe someone else for it.....(if this is the vehicle creditor then they'd be more likely to repo the vehicle than to seek wage garnishment)."
_____

That's good to hear. The car is paid for and was inherited from my father about three years ago.

Here's another question: Is wage garnishment usually the first resort a creditor takes against you after a judgement? If so, then this might buy me some time, as my next paycheck (I'm on state disability retirement) does not occur until the end of July. By then, I should have received my check and paid my bankruptcy lawyer his fees.
___________________________________

You asked:

"Why can you not appear at court?"
_____

To be honest, I really can't afford the gas. The site of the court is in a city located about 200 miles away from the city of my residence.
____________________________________

You suggested:

"The first step might be to contact the clerk of court where the suit is and ask if he can continue the case to a later date. Explain the situation and why you cannot attend on the date stated."
_____

I thought about that.

However, if I contact the clerk of the court and ask for a continuance, knowing in advance that I fully intend to pay my bankruptcy lawyer in a week or two, then isn't this dishonest?

This would seem to me like asking for a continuance under the false pretense that I intend to appear in court for that one creditor at a later date, where in actuality, I intend to file for bankruptcy and only attend that one meeting where all of my creditors are invited to attend.

I fear that this would only get me in further trouble. If I contact the clerk of the court, I think I would just have to be honest and tell the clerk that I will be filing for bankruptcy within a week or two when my money to pay my bankruptcy lawyer comes in.
___________________________________

You wrote:

"If you do not appear at court and do not get another date then yes the judge will find against you. However that's not a lost cause. He'll find against you and then they'll start whatever local steps are necessary for wage garnishment."
_____

Two questions: (1) Is wage garnishment usually the first step? (2) Is there a rule about what percent of your paycheck they can take out every month? Can they take out all of it every month until the debt is satisfied?
_______________________________________

Thanks again for replying to my original post and my questions.

Feel free to respond to anything else I have written and asked.

Best Wishes,

Munch

[lrprn]

Welcome to BK Forum, munch - glad you found us!

Is wage garnishment usually the first resort a creditor takes against you after a judgement?

Depends on what you owe the creditor. What's the creditor trying to collect from you?

Is there a rule about what percent of your paycheck they can take out every month? Can they take out all of it every month until the debt is satisfied?

Depends on the state you live in. What state is that?

[JRScott]

As lrpn says to answer your new questions we'd need to know more about the nature of the debt, level of delinquency on debt, and your State.

[ManFromMunchkin]

Welcome to BK Forum, munch - glad you found us!

Depends on what you owe the creditor. What's the creditor trying to collect from you?

Depends on the state you live in. What state is that?

Hello Irprn,

Thank you very much for replying to my questions.

To answer your questions:

***The Warrant In Debt is from a bank who is trying to collect an unsecured credit card debt. Surprisingly, this is my first Warrant In Debt, and it is coming from the credit card to whom I owe the least -- about $1,000. I have several others, to whom I owe a lot more, and I am surprised none of them sent me a Warrant In Debt first.

***I live in the state of Virginia.

I hope this helps.

Thanks again!

Best Wishes,

Munch

[JRScott]

Virginia allows up to 25% of your disposable earning for the week to be garnished or the amount by which disposable income exceeds 40 times the federal minimum hourly wage whichever is less.


Now I'm not 100% up on VA law, but in many places they have to first get the Judgement against you and then have to go back to court and seek wage/bank garnishment.

[lrprn]

Here's a link that explains wage garnishment and judgment interest rates in VA - http://www.bcsalliance.com/debt1_virginia.html

Virginia uses the federal restrictions on wage garnishment - as JR said, that's 25% of your earnings for the week, but the amount by which his disposable earnings for that week exceed 30 times (not 40) the Federal minimum hourly wage.

The bank has to go to court to garnish your wages. Get ready to file bankruptcy - retain a lawyer, complete the forms, etc - so that when the notice comes, your lawyer can file immediately before the court date. If it's close to the court date, then be sure you or your lawyer attend that day and bring along a copy of your filing papers - that will stop the proceeding because the automatic stay prevents the bank from trying to collect the debt.

[JRScott]

lrprn if I'm not mistaken the 30 was changed to 40 on July 1st, 2005 for the State of Virginia, not for the Federal Government.

Here I looked it up, it is 40.

http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+34-29

[lrprn]

Thanks for the heads-up, JR. I found another independent source stating that 40 times is indeed now the correct amount for VA - http://www.hunton.com/files/tbl_s10N...Alert_6.05.pdf . Good catch!

The two reliable online sources of garnishment information by state that I typically refer our members to - http://www.bcsalliance.com/ccpa_15usc1673.html and http://www.fair-debt-collection.com/...hments.html#47 - both still show Virginia with 25% or 30 times the federal minimum wage, not 40.

I'm dropping an email to the administrator of both of the incorrect infomration sites. I'm sure they'll appreciate knowing they currently have incorrect garnishment information posted for VA.

[JRScott]

You're Welcome

[ManFromMunchkin]

Virginia allows up to 25% of your disposable earning for the week to be garnished or the amount by which disposable income exceeds 40 times the federal minimum hourly wage whichever is less.

Now I'm not 100% up on VA law, but in many places they have to first get the Judgement against you and then have to go back to court and seek wage/bank garnishment.

Hello JRScott,

Thank you very much for the information.

In regard to your second paragraph above, are you saying that the court date I am facing right now is only the one which determines whether the judgement of my debt is ruled against me -- and that my creditor will have to seek a separate and second court appointment to officially seek the wage/bank garnishment?

My Warrant In Debt court date is this coming Wednesday on August 11th. I cannot afford to pay my bankruptcy attorney yet until I get paid for some work that I did last month.I expect to get paid sometime during the next two weeks.

My bottom line fear is that when I am unable to make my court appearance this coming Wednesday, and after the judge rules in favor of the plaintiff (the creditor), that I may come outside my apartment Thursday morning and find my car missing or my checking account emptied.

If garnishing my wages or seizing my automobile or checking account balance is something that requires a separate and second court date by the creditor, then this would appear to give me further time (hopefully the two weeks I need) to receive the payment I am expecting, which would immediately enable me to pay my lawyer and get my paperwork done.

Am I interpreting this correctly?

Thanks again for the information.

Best Regards,

Munch

[ManFromMunchkin]

Here's a link that explains wage garnishment and judgment interest rates in VA - http://www.bcsalliance.com/debt1_virginia.html

Virginia uses the federal restrictions on wage garnishment - as JR said, that's 25% of your earnings for the week, but the amount by which his disposable earnings for that week exceed 30 times (not 40) the Federal minimum hourly wage.

The bank has to go to court to garnish your wages. Get ready to file bankruptcy - retain a lawyer, complete the forms, etc - so that when the notice comes, your lawyer can file immediately before the court date. If it's close to the court date, then be sure you or your lawyer attend that day and bring along a copy of your filing papers - that will stop the proceeding because the automatic stay prevents the bank from trying to collect the debt.

Hello Irprn,

Thank you very much for the information you provided above.

I want to make sure that I understand this correctly.

I have a Warrant In Debt court date this coming Wednesday on July 11, 2007.

Due to the fact that I am unable to appear, and that I cannot yet afford to pay my bankruptcy attorney, I am assuming that the outcome will be a judgement against me and in favor of the creditor, which is a bank for an unsecured credit card debt.

Are you saying that the creditor will have to go to court AGAIN for a second and a separate time to get permission to garnish my wages?

Or can the creditor get this done during the same court appearance on this coming Wednesday, July 11, 2007?

Once again, my biggest fear is that I may walk out of my apartment building the next morning (Thursday, July 12, 2007), the day after my judgment, and find my car missing and/or find that my checking account has been emptied, as a result of my property having been seized to begin paying off the creditor who won the judgement).

If the garnishment of my wages or the seizing of my property in any other way (i.e., taking my automobile or emptying my checking account) is something that will require a second court appearance by the creditor, then
it would appear that I would have some additional time, at least during the next two weeks, to receive the payment I am expecting, and to pay my bankruptcy attorney and get my paperwork done.

I want to make sure that I am understanding this correctly.

Thanks again for your help and information.

Best Regards,

Munch

[ManFromMunchkin]

Correction

Hello JRScott,

I made a boo-boo in the post I just posted to you.

I wrote:
_____

"My Warrant In Debt court date is this coming Wednesday on August 11th."
_____

I meant July 11th, which is this coming Wednesday.

Sorry.

Best Regards,

Munch

[lrprn]

Ask the lawyer you plan to retain whether you can take all the money out of your accounts now and use money orders to pay your secured creditors, utilities, and other bigger purchases until you file. Save the receipts in case there's any question about what you did with the cash you removed. This cc creditor can't take money from your accounts if it isn't there. Since you are filing in a few weeks, don't pay any non-secured debts.