Need Help !! Adversary Proceeding Pre-Trial Next Week !

[jblu83]

Ah, 2 issues here.

1st, you may be judgment proof. Federal Disability (SS/VA) is exempt. I do believe that a Federal pension money sitting in the bank (must be traceable) is also exempt but you need to look into that. If all is exempt and that is all you have, you are judgment proof and probably did not need a bk. Simply tossing in the towel and letting AMEX get a judgment may be fine as the judgment might not be worth the paper it is printed on.

2nd, I usually throw out an opening number of $3K asserting that we are doing nothing more than offering the initial cost of legal fees before a bunch of time is spent on discovery. If you cannot get the creditor to go away based on this, the settlement, at least in my experience, ends up at about 50 to 60% of the claim with payments over 3 years and no interest. The other factor is the attorney who represents the debtor. I think (but cannot verify this) the Firm I work for is a bit more successful in settling or simply making it go away as the institutional creditors know that we routinely handle 523 matters. They also know that if the matter doesn’t go away we will put up a very expensive fight, hauling the creditor in for depositions. The problem with litigating is that you win some and you lose some. It all depends upon the facts of each case and, as you proceed further into those facts through discovery the real picture comes out. Sometimes the creditor is barking up the wrong tree but other times the creditor has a smoking gun that you can’t defend.

Des

Thanks Des.... That is what I was told by my atty as well; that my Federal Disability payments can not be garnished.

[despritfreya]

How much do you think I should try to settle for, if this is indeed my best course of options ??? Can they garnish a Federal Disability Pension ?????

Ah, 2 issues here.

1st, you may be judgment proof. Federal Disability (SS/VA) is exempt. I do believe that a Federal pension money sitting in the bank (must be traceable) is also exempt but you need to look into that. If all is exempt and that is all you have, you are judgment proof and probably did not need a bk. Simply tossing in the towel and letting AMEX get a judgment may be fine as the judgment might not be worth the paper it is printed on.

2nd, I usually throw out an opening number of $3K asserting that we are doing nothing more than offering the initial cost of legal fees before a bunch of time is spent on discovery. If you cannot get the creditor to go away based on this, the settlement, at least in my experience, ends up at about 50 to 60% of the claim with payments over 3 years and no interest. The other factor is the attorney who represents the debtor. I think (but cannot verify this) the Firm I work for is a bit more successful in settling or simply making it go away as the institutional creditors know that we routinely handle 523 matters. They also know that if the matter doesn’t go away we will put up a very expensive fight, hauling the creditor in for depositions. The problem with litigating is that you win some and you lose some. It all depends upon the facts of each case and, as you proceed further into those facts through discovery the real picture comes out. Sometimes the creditor is barking up the wrong tree but other times the creditor has a smoking gun that you can’t defend.

Des

[HHM]

Okay, but what HAPPENED that you couldn't make a payment after that?

Time is only ONE factor in the defense to these claims. 8 months is a good window, but unless you have an explanation as to WHY you stopped paying when you did, your defense is not that strong.

As for settlement, it really just depends. Since the case is borderline on both sides, maybe a lump sum of 25% of the balance (assuming you could pay that), or a little higher with monthly payments.

[jblu83]

Over 6 months from the charges they are fighting for and none of them all that excessive single line itemwise. Did you make any payments on these charges before you filed?

Account was opened from 2004 and multiple payments were made on the account.... My last payment submitted was the end of Oct. 2009

[jblu83]

The reality:

The amount in controversy is $18K. Your legal fees in defending could run over 10K. If you lose you may have to pay lender's legal fees. If you win, the lender may have to pay your legal fees. This is a perfect case for settlement on both sides.

Settlement is a negotiation which will end in the entry of a "non-dischargeable judgment" for some amount and a "covenant not to execute" on the judgment so long as the payments agreed to are made. Discuss settlement with your attorney as that will be the cheapest way to get out from under the claim.

Des.

How much do you think I should try to settle for, if this is indeed my best course of options ??? Can they garnish a Federal Disability Pension ?????

[jblu83]

How is your attorney feeling about this? I am hoping you are able to get something worked out. I really do feel bad for you. Please keep us updated as I know I am feeling pretty uneasy right about now with this happening to you.

Atty: feels pretty good about our case because the charges are 8 months and older.

[jblu83]

It's an arguable case, I see about $14K of actual charges listed. If you really charged all that in a 2 month time frame and made your last payment on the card right after the sending spree, that doesn't look so good.

Time to think about settlement.

In reality, what happened; time to come clean, you charged 14K+ in a little under 2 months, and stopped paying right after you finished the charges and filed BK just over 8 months later.

Were you working at the time you made the charges? Was your income lower?

Yes I was working at the time of the charges and my income was steady. . .

[despritfreya]

The reality:

The amount in controversy is $18K. Your legal fees in defending could run over 10K. If you lose you may have to pay lender's legal fees. If you win, the lender may have to pay your legal fees. This is a perfect case for settlement on both sides.

Settlement is a negotiation which will end in the entry of a "non-dischargeable judgment" for some amount and a "covenant not to execute" on the judgment so long as the payments agreed to are made. Discuss settlement with your attorney as that will be the cheapest way to get out from under the claim.

Des.

[panda]

How is your attorney feeling about this? I am hoping you are able to get something worked out. I really do feel bad for you. Please keep us updated as I know I am feeling pretty uneasy right about now with this happening to you.

[HHM]

It's an arguable case, I see about $14K of actual charges listed. If you really charged all that in a 2 month time frame and made your last payment on the card right after the sending spree, that doesn't look so good.

Time to think about settlement.

In reality, what happened; time to come clean, you charged 14K+ in a little under 2 months, and stopped paying right after you finished the charges and filed BK just over 8 months later.

Were you working at the time you made the charges? Was your income lower?

[DebtEnder]

Over 6 months from the charges they are fighting for and none of them all that excessive single line itemwise. Did you make any payments on these charges before you filed?

[jblu83]

Okay, time to move on to the next phase

What did you do? What are they objecting too and how much?

1. HAD THE CREDIT CARD SINCE 2004 AND NORMAL SPENDING HABITS WITH NORMAL PAYMENTS.

2.BANKRUPTCY FILED JULY 20,2010

3. AMEX OBJECTING TO CHARGES FROM SEPTEMBER 2009-NOVEMBER 4TH,2009.

4. CLAIMING CHARGED WITHOUT THE INTENT TO PAY FOR THE ENTIRE USE OF CHARGES IN THE AMOUNT OF APPROX. $18,000.

5. THEY ONLY OUTLINE THE CHARGES THAT THEY FEEL ARE FOR LUXURY GOODS.

6. 2 CHARGES FOR AIRPLANE TICKETS $2020.00 WE PURCHASED TO GO VISIT FAMILY IN NY.

7. 32 CHARGES FOR GENERAL MERCHANDISE AT RETAIL STORES FOR $1812.00

8. 2 CHARGES FOR FURNITURE $2600

9. 13 CHARGES FOR CLOTHING $900

10. 1 CHARGE FOR AN ELECTRONIC DEVICE $900

11. 3 CHARGES FOR A CAMERA $1000

12 2 CHARGES AT A RETAIL STORE FOR $880.00

13. 1 CHAGE FOR A SECURITY SYSTEM $700

14. 4 CHARGES FOR TICKETS TO AN EVENT $600

15. 1 CHARGE FOR A HOTEL WE USED TO VISIT FAMILY IN NY $400.00

16 3 CHARGES FOR A SECURITY DEVICE $400

17. 1 CHARGE FOR A PIECE OF JEWELRY $320

From 2004 I had all normal payments on time and my last submitted payment was to them on October 29th, 2009. Filed bankruptcy July 20th,2010.

What are your thoughts ?

[HHM]

Okay, time to move on to the next phase

What did you do? What are they objecting too and how much?

[panda]

Thanks for answering, unfortunately they are my biggest creditor.

[jblu83]

jblu, would you mind sharing who filed the AP?

Amex