Have you been sued? Any advice?

[Voltron1978]

So, here is my situation.

First, I filed BK, chapter 7 in Jan of 2007 and discharged in April of 2007.

My family and I were living in a manufactured home that sits in a mobile home park. I reaffirmed the debt and continued to live in the home.

Fast forward to last year, my family outgrew the home and we needed to move. Tried selling the mobile home and had no success. Purchased a new home for my family and moved in. Contacted the bank to work something out about the mobile home and they sent me a form to sign. Form only had me state that I had removed all possessions from the home.

That was eight months ago. Now, I have a request from collection attorney working for the bank. I called the attorney on the letter and she asked if I wanted to settle or make some payments. The total debt I owe, after the bank sold the mobile home for fair market value is $13k. I told her I could only afford to settle for a few hundred dollars. She scoffed and said she would send me a packet to fill out for the bank to evaluate my offer. The attorney emailed me an Affidavit of Financial Disclosure. This document wants a ton of personal financial information.

So, I called my attorney and he said not to fill it out and ignore them. He said that they will either sue me or write the debt off and send me a 1099. My lawyer said that if they do sue and get a judgement, just pay small amounts and then file another BK to get rid of the debt.

Any thoughts or friendly advice from my fellow BK Forum members? Any similar situations? What happened to you?

Thanks!

[Pandora]

Best read ever as to why no reaffirmation of mortgages and what can happen:

http://www.bkforum.com/showthread.ph...-very-bad-idea.

Hopefully you can hang in there for another 3 years w/out being sued / getting judgements / etc, doubtful, but.. stranger things have happened. However it's a risky proposition your lawyer proposed given you cannot file another Ch. 7 until 2015. Did your lawyer advise you to reaffirm the debt or did you do it against his/her advice? If he advised it... seek the advice of another lawyer before "just ignoring" the collections effort.

[Voltron1978]

I reaffirmed because we had no other place to live and we wanted to keep the home at that time. Plus, since it was a manufactured home, it is treated as a car loan. Once they saw me file bankruptcy, they tried to repossess the home. That only stopped when I reaffirmed. My lawyer was hoping that I would dump the place and move in with my parents or something. My wife and I decided against that at the time.

[frogger]

What have you got that they can take? Assets or income?

[tobee43]

shoot looking back maybe you could have rented it out and had it become an asset for you at a later time .

as frogger asked, what exactly do you have to lose? if nothing what they will get a lien and it will sit forever on your house...could be ok, if you plan to stay in the house you are in for the next 100 plus years. if not, see if you can work out some type of payment plan with them, although, unfortunate. sorry!

[LadyInTheRed]

I have run across many articles saying that lenders often don't bother with deficiency judgements. I don't know how true that is and whether lenders in one state are more likely than others to file for a deficiency judgement. But, it may be the reason for your attorney's advice. Keep in mind that if you fill out all of the financial information and the bank later gets a deficiency judgement, they will have a head start on finding assets to collect.

[tobee43]

yes, lady, it seems like in the good "old" days there was not a lot of pursuing going on for the deficiencies after a foreclosure. maybe the difference today, is so many places are so far underwater and the banks are taking huge loses, they will not let sleeping dogs lay???

i recall someone i know years ago walking away from a house and the bank MADE money on it! perhaps that is why we hear more about the pursuits of such cases today.

[GoingDown]

She scoffed and said she would send me a packet to fill out for the bank to evaluate my offer. The attorney emailed me an Affidavit of Financial Disclosure. This document wants a ton of personal financial information.

They are trying to determine whether or not you are worth suing and worth pursuing.

Any information you give them will be turned around and used against you.

[bcohen]

GoingDown is right. You have absolutely NOTHING to gain by giving the bank the requested information, despite the fact that they are saying that they need it in order to "work with you". The truth is that they want you to voluntarily disclose your investments, bank accounts, and employer, so that they can sue and garnish as much and as quickly as possible. If I were you, I'd ignore the form which they sent you, and monitor your Credit Karma and/or county recorder's website every week to be sure that they don't attempt to sue and get a default judgement. As soon as you learn of any lawsuit, make sure to empty or close any bank accounts, and use cash for everything.

[Voltron1978]

Thanks everyone for the insight. Friends and experts have all told me to NOT send the lawyer anything. They only want to know what, if anything, they could leverage. As for assets, I have my home and two older cars, a bit saved in a 401k and another retirement account. Other than those, I don't really have anything the bank can sue for. If I do receive a summons, I will deal with that then. My lawyer thinks they will just write this off and send me a 1099, but I'm not so sure. It's tough worrying about a situation that I have no control over anymore.

[tobee43]

Voltron, also, just a suggestions; do not leave any large amount of money in any of your bank accounts! just in case. i know the state we use to live in, the judges would grant the judgements and the debtors were never even legally served...next thing you know, these creditors would be getting into the bank accounts.

so just be careful! and good luck!

[GoingDown]

Read this entire thread for more information about keeping your money safe from judgment creditors.