Lost two investment homes, now garnishment order

[didi768]

We owe 133,000 on one of the homes and 30,000 (second mortgage) on the other home. We lost these homes in FL. Lost them 5 yrs. ago.
The first home sent us a garnishment order which we will choose the head of household excemption and mail back soon and the second home with the 2nd mortgage only calls us constantly so far.
If filing chapter 7 will cause us to lose our 23,000 dollars we now have saved up in our bank, we'd rather settle or do nothing. If the garnishment doesn't work for the plaintiff, I hear they can freeze our bank account. Now I feel like going out and spending every dime I saved, even before consulting with bankruptcy lawyers, or at least using it all to pay off husbands 23,000 student loans.
My mind is overloaded at this point so I guess just getting several lawyers' opinions is in order.
I read about how people lose their own homes but never see info or personal stories on how ppl lost investment homes.
All suggestions/personal stories welcome.
Thanks

[justbroke]

If they are seeking a garnishment order, then I don't understand why they would not levy your bank account(s). I think that you should be consulting with several local bankruptcy attorneys now! You are at what I call, the final stage in the collection process... execution of a Writ of Garnishment/Levy!

As for the Head of Household exemption, I believe it only protects a certain portion of disposable income (in Florida). I think it's under the same statutes as bankruptcy exemptions... F.S. 222. Additionally, only one of "you" can be head of household, so if the other is working or has bank accounts, the garnishment may still sting.

This is time to do some Estate planning and maybe some bankruptcy pre-planning. There may be things that you can do to protect what assets (and money) that you have. I would not be guessing as to how far the judgment reaches. You have a significant savings which should probably be in an ERISA-qualified retirement account. However, I'm neither a tax attorney nor bankruptcy attorney so you should be asking questions about protecting your assets.

[didi768]

If they are seeking a garnishment order, then I don't understand why they would not levy your bank account(s). I think that you should be consulting with several local bankruptcy attorneys now! You are at what I call, the final stage in the collection process... execution of a Writ of Garnishment/Levy!

As for the Head of Household exemption, I believe it only protects a certain portion of disposable income (in Florida). I think it's under the same statutes as bankruptcy exemptions... F.S. 222. Additionally, only one of "you" can be head of household, so if the other is working or has bank accounts, the garnishment may still sting.

This is time to do some Estate planning and maybe some bankruptcy pre-planning. There may be things that you can do to protect what assets (and money) that you have. I would not be guessing as to how far the judgment reaches. You have a significant savings which should probably be in an ERISA-qualified retirement account. However, I'm neither a tax attorney nor bankruptcy attorney so you should be asking questions about protecting your assets.

The lawyer was quick. They opposed our head of household exemption. We just mailed it wow. Seeing a second lawyer Wednesday morning. We are scared to death now. I don't work, just hubby does. Wish we didn't have to file since we have no other debt in the world besides those lost homes. I hear so much about people and their credit card debt and we just have none, we are pretty conservative on spending. Wish we'd never bought those homes to flip.

[justbroke]

Wish we'd never bought those homes to flip.

So does everyone who did so on the upswing (2003-2007).

While bankruptcy is the "nuclear" option, you must consider that your deficiency judgments from the foreclosed homes as the SAME EXACT THING as credit card debt. Do not think of it any differently! I'm puzzled as to why you were lulled into the false sense that this would just go away. If you are saying that you have $160,000 in judgments, have (household) income, and have $23K in the bank, of course a creditor will go for the gold... so to speak.

You are well served by speaking with bankruptcy attorneys and determining your next course of action. Again, that may include some bankruptcy pre-planning and converting some non-exempt assets into exempt assets. Only a attorney or estate planning professional can provide you with exact advice.

Remember. Buying an investment home (or homes) is a business decision. Your business failed. Bankruptcy is a socially acceptably and legal way to reset after that fruitless decision. Everyone from Donald Trump to Walt Disney has done it. Judgments of over $100,000 are nothing to be modest about!

[bcohen]

With an active judgment, the creditor can and will seize almost everything in your bank account--if they can figure out where you bank. You need to get that money out of the bank, like yesterday! I would recommend withdrawing the funds in the form of a cashier check payable to the student loan lender, and paying off your husband's student loans. Then, after using your savings to pay off the non-dischargeable student loan debt, wait a minimum of 5 to 6 months* and file for Chapter 7 bankruptcy. The judgments will be discharged (well, technically the underlying debt will be discharged, but the judgments will become unenforceable) and you will no longer need to worry about wage garnishments or bank account levies.

* The "lookback period" for preferential payments (i.e. payments made to some creditors while not paying other creditors) is 90 days for non-insider payments, which would include student loans and other consumer debts. However, to avoid being hassled by the trustee when you ultimately do file, it is a good idea to wait twice as long--or even longer, if possible--before filing.