Question??? About Direct deposits & wage garnishment

[DebtHeadache]

Well I called an attorney yesterday and we briefly discussed a few things...here's what he advised us.

1) We bank at a credit union where we have a auto loan/multiple credit cards and a personal loan - I asked him if we'll have any trouble and he advised us to try to get our car refinanced through someone else, otherwise the credit union can tack on the other debts to the auto loan.

2) Asked him if we should pay a little bit to each creditor just to keep them from hounding us - his advise was to pay them nothing since we will be filing the beginning of Decemeber.

3) One question I failed to ask was this? I have cancelled my husbands and my direct deposits and intend to pay bills with Money orders (I have this fear of bank account garnishments), I live in Texas and I do not think they can garnish wages in this state. Will this look like I am trying to hide money from the courts?

Any help you can provide will be greatly appreciated.

[lrprn]

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

1) We bank at a credit union where we have a auto loan/multiple credit cards and a personal loan - I asked him if we'll have any trouble and he advised us to try to get our car refinanced through someone else, otherwise the credit union can tack on the other debts to the auto loan.

Your lawyer is right about this.

2) Asked him if we should pay a little bit to each creditor just to keep them from hounding us - his advise was to pay them nothing since we will be filing the beginning of Decemeber.

Your lawyer is right about this too. Why throw good money away that can be put to better use?

Also avoid using your credit cards for 90 days before filing and don't take any cash advances for 70 days before filing to reduce the chances of being accused of filing in bad faith.

3) One question I failed to ask was this? I have cancelled my husbands and my direct deposits and intend to pay bills with Money orders (I have this fear of bank account garnishments), I live in Texas and I do not think they can garnish wages in this state. Will this look like I am trying to hide money from the courts?

Texas does NOT allow wage garnishments so your creditors can't take any of your earned pay. Using money orders to pay bills is something many of our members have done here. It raises no suspicions - don't worry about that. In the right circumstances, doing this prevents cross-collaterization where your bank takes money from one account with the bank to pay shortfalls in another - a very good idea when you have multiple accounts at the same bank the way you do.

Since you haven't filed yet, now is the time to open another checking account at a totally different bank and start directing your income deposits there. Leave $5 in the current account and stop all automatic withdrawals that may be set up to pay creditors to avoid overdrafts.

Again welcome - hang around with us, ask questions, vent as needed - that's why we're here!

[DebtHeadache]

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

Your lawyer is right about this.

Your lawyer is right about this too. Why throw good money away that can be put to better use?

Also avoid using your credit cards for 90 days before filing and don't take any cash advances for 70 days before filing to reduce the chances of being accused of filing in bad faith.

Texas does NOT allow wage garnishments so your creditors can't take any of your earned pay. Using money orders to pay bills is something many of our members have done here. It raises no suspicions - don't worry about that. In the right circumstances, doing this prevents cross-collaterization where your bank takes money from one account with the bank to pay shortfalls in another - a very good idea when you have multiple accounts at the same bank the way you do.

Since you haven't filed yet, now is the time to open another checking account at a totally different bank and start directing your income deposits there. Leave $5 in the current account and stop all automatic withdrawals that may be set up to pay creditors to avoid overdrafts.

Again welcome - hang around with us, ask questions, vent as needed - that's why we're here!

Thanks for the repling Lrprn. I did open another checking and savings account at another Credit Union.

Once we file I will change back to direct deposits, just to leary at this point.

Another questions: we opened 3 new accounts two months ago and have not paid them...should we make up two payments to avoid any problems with our filing?

Any guidance you can provide will be most helpful.

[rrockinggramma]

If you are filing a chaper 13, then no I wouldn't pay them. they can file a claim and get paid through your plan. As to your vehicles, if they are more than 910 days, include them in your plan. They can be crammed down to FMV and you won't lose them. Your lawyer is right on about the the credit union. They will come after you with both guns blazing over the vehicle and the unsecured debt with them. Your lawyer suggested refinancing the vehicle currently financed through the credit union. If this is possible it is a good idea as credit unions can be difficult to deal with, if not, then include it in your plan(hopefully you can cram it down) and then let the credit union file the claim. But don't plan on banking there ever again.

[aa06a47]

Well I called an attorney yesterday and we briefly discussed a few things...here's what he advised us.

1) We bank at a credit union where we have a auto loan/multiple credit cards and a personal loan - I asked him if we'll have any trouble and he advised us to try to get our car refinanced through someone else, otherwise the credit union can tack on the other debts to the auto loan. Open another bank account. I hear Credit unions are ruthless in bankruptcy cases.

2) Asked him if we should pay a little bit to each creditor just to keep them from hounding us - his advise was to pay them nothing since we will be filing the beginning of Decemeber. Pay your secured creditors (house, car). If your 100% sure of filing, quit paying the unsecureds.

3) One question I failed to ask was this? I have cancelled my husbands and my direct deposits and intend to pay bills with Money orders (I have this fear of bank account garnishments), I live in Texas and I do not think they can garnish wages in this state. Will this look like I am trying to hide money from the courts?I would open up another bank account and not worry about the money order stuff. It is a pain in the ass, and probably not at all necessary unless you have creditors already getting judgements against you.

Any help you can provide will be greatly appreciated.

AA