If you don't pay unsecured creditors..what can they do? What can they take?

[JJCA]

So..if anyone is following my posts, it is probably apparent by now I don't have an attorney to ask my questions to..so looks like this website will be my best resource for a while!!

Based on the suggestion of the attorney that we went to see (that I can not question, so will have to take it for what its worth) It appears we should wait to file and spend down resources, in order to lessen the risk of losing everything, including cars & home. (that part still surprises me since our 'resources' are the equity in our cars and money that will be coming from a personal injury claim, and maybe some equity in the home, although we currently can't make the mortgage payment) And personal injury is 'supposed' to be exempt.. Really seems like we have SO little!!

But anyway, now that I have learned BK is a bigger risk than I realized..and assuming the attorney is correct...and we wait..then what?

We stop paying CC...can't afford those payments and survive anyway. They flood us with relentless phone calls? Garnish hubbies wages? (if he ever gets a job - it has been 2 years) Sue us? (I know they can do this) What about our so called 'resources'? Can the CC companies force us to use our resources to pay them? If the idea of waiting to file BK is to 'protect/spend down' resources, can that then just be taken by the CC companies in one way or another? I am not able to work, hope to be approved 'eventually' for Social Security Disability. Can they tap into that or force us to? I think I read it was exempt in BK, along with back-pay..but just in case will ask if anyone has first hand knowledge or experience wit this. Especially since not filing BK could change this(?)

Thanks again...
JJ

[sunshinepa]

Well, in my case........Citi sued me last week. I plan on filing in the next four weeks. According to my attorney, they can AND WILL get a judgement, pul a lien on my home and actually can come and take my car which I own outright. We plan on sending a response to their lawsuit just to hold them off until we can get the paperwork filed for either a Ch 7 or 13. Which one will depend on what my home equity is when I get a CMA done.

One nice thing for me.......in Pa they cannot garnish wages and even if they could, my state employee pension is protected and they can't get into my bank accounts. One word of caution.......if you have bank accounts that have anything to do with ANY of your credit cards, move your money. They can take your money right out of them.

They cannot touch your SSDI if you get it and another good note is that's exempt in your bankrupcty.

Keep posting, lots of folks here with much more experience and knowledge than me to help.

[JJCA]

sunshinepa: Sorry to hear you are being sued. I too owe Citi also along with a few other 'big guys'. Being sued is a BIG fear of mine! I find it interesting that they can put a lien on your home. Seems like that would be turning an unsecured debt into a secured one. Or maybe a lien just means if you sell and get any money, they get it first but does not really secure anything. And being able to go after your car, Ouch! From a CC card company standpoint I get it, but still, ouch! This is in fact part of what I fear & why I am asking now!!

May I ask, how long did it take them to sue you, and has anyone else also done so (if you owe others) I know it will not have any real meaning as I imagine every case & state is different..still curious if you don't mind sharing.

Looking forward to more replies...

[sunshinepa]

jjca..........it took less than 3 months once they turned it over to the collection lawyer. Got a letter when they got it asking for full payment and then I sent them a debt validation letter hoping to stall.....LOL........they returned it within a week. That was the 2nd week in FEB.......got served my summons on 3/11 but they actually filed it on 3/7........I stopped paying in August. The others have all been turned over to collection agencies and they will not be far behind with BOA fast on my heels right now.

I am filing quickly one way or another to stop it all.

Yes, being sued is scary especially if you wanted a bit more time. In my case, it caused me to rapidly speed up the process but I had already interviewed and chosen my attorney. He will draft a response for me on Friday so I can at least delay them and force an actual court date. Hopefully by the time they get a date I will already have my bankruptcy case #....wish me luck.........LOL.

If you just stopped paying you should be ok.......it took 3 mos. for them to turn it over so overall, I got sued in about 6 mos. I have seen other posts where it was quicker with them. Citi is a monster who moves quickly. I have had their cards for over 30 yrs.......always paid them off, never late and etc.........they really don't care and are really hard to deal with, worse than some others but not all. I actually had a Wells Fargo rep (when I did take one call) tell me to sell my couch.......LOL.........I literally told him to pound sand and hung up. Have not answered one call since.....added caller id and only answer my phone when I know who's calling.

Wish you the best of luck.

[frogger]

What can they do?

File legal actions in order to get judgments against you.

What can they take?

Bank accounts if they can be found, vehicles if they are paid for. Technically, other things "could" be taken in a seizure action, but it's rare.......

The Sheriff's department usually does not have the manpower, the storage space, and most especially, the will to start taking peoples personal possessions.

Play your cards right, and what can be taken is very limited.

[sunshinepa]

Frogger............give me some cards.........LOL

[daylate]

Short of garnishing your wages which is limited to some amount, there is not much a creditor can do to force you to pay. They could sue and get judgments against you but most states allow the same exemptions against creditors as in bankruptcy. For example they can't get your SS payments or tap any 401k or IRA you have. One thing to watch out for is a bank using money in your checking account or savings account to pay credit card bills. safest way around that is to make sure you don't owe the bank where your money is. If that is the case, switch banks. Do a search on being sued, lawsuits, bank offsets, etc-lots of good stuff on this forum. Good luck.

[frogger]

Frogger............give me some cards.........LOL

A good gambler never shows his/her cards......

[keepmine]

Maybe a rundown of how much equity you have in your home and cars that you have to spend down will help.Exactly what did your lawyer say that says you have to delay.
If you can't make your mortgage payments, you need to think about selling the house and capturing some equity and use that for a fresh start.

[JJCA]

Sure...
Owe $270,00 on house, have 1st & 2nd. Recent broker price opinion was for $300,000 sight unseen except from the front/street, but he is very familiar with the neighborhood (have known him for years). I think MAYBE, at best, $330,000 but probably somewhere in between. Real Estate agent says not much chance of selling, house needs major repairs & would have to be sold as is, then factoring is commissions & fees etc. Can't make mortgage that increases amount owed & would end up losing any amount equity very quickly. (so he says) The 2 cars total equity is about $10,000. Around $11,000 access to cash, including life insurance loan/surrender value. Only income is unemployment (hubby) of $1,600 right now, ends this month. Bills & variable expenses of at least $2,000 a month plus CC minimums of $1,700 a month plus Mortgage of $2,300. Lived on CC to survive last 2 years (owe $80,000). Major health issues, 4 surgeries in 2 years, now chronic illness & disability and so on. Can not live like this any longer!! Do expect personal injury settlement sometime this year. May be for something between 9 & 18,000 max. Attorney said too many assets to protect them all right now, spend down & file later. If I/we spend it all down while waiting to file, nothing to survive on afterward. (I know not fair to CC company, not trying to be a dead beat, just trying to survive) Don't want to do anything wrong/fraudulent & don't want to to make dumb move that causes more harm than good in long run. (like continuing to pay mortgage or CC when ultimately we will not ever get out of this mess) We are no longer using or paying CC as of this month, nor mortgage. Can't unless we access the remainder of of cash, but then will not be able to survive past 2 months. (Mortgage, CC & bills = over $5,000 a month) 2 months wipes us out. Then can't even pay to keep lights on!

Does that help any? I would like to get a divorce at some point & need to have a way to survive, with or without hubby! Spending everything now just to make it 2 more months & file is hard to swallow. Have to make sure it is the best answer..but attorney won't offer more guidance without paying them more $ fees.

I think we are just in a pickle from what I can tell! I think were in too deep. Don't want to get rid of all assets to keep house, only to not be able to survive later anyway..but don't want to get rid of house in BK if there is another way.

I see why pre-planning is a BIG deal.

[keepmine]

Bk may not be the answer to your problems.
I'd consider stop paying everything and live in that house until the foreclosure process is complete and use that money to support yourself.
AT some point, the 2 of you will have to find some sort of job. Even post bk, you still have to support yourself.

[keepsmiling]

Probably time to stop paying the cc's. Probably safe to assume little to no equity if there are major repairs needed- you can always get some quotes for repairs to subtract from a quote that the trustee might argue.

[JJCA]

Thanks for the replies!!