Getting sued, freezing bank accounts, etc....

[ameliabedilia]

Hi everyone-

I'm trying to help my friends figure some things out before they file bk.
They are in a real mess, in my opinion.
They live in one town and pay rent, but own a home in another city, which they are upside down on- mortgage is $2000 a month and their rent is about $500. They do have a family member living in the house who pays $600 rent. They are slowly coming to the realization that they need to get rid of the house, even though they will be moving back to that city, and originally wanted to move into it.

He has been told by one of his cc companies that they are planning to sue him. They are still offering him settlements, but he cannot afford it.
This is why he is in the real mess- His wife has a bank account that about $10000 in it that is her mother's money- she was not a citizen for a long time, so she asked her daughter to keep it for her. It has stayed in this account for a long time, never getting spent. They would feel terrible if they got their accounts frozen and their elderly mother lost everything. They are also scared about her (he is currently unemployed) checks getting garnished. What do they do? They don't think they can file right away due to this lump of money in her bk.

He also had a decent job last year that kept them somewhat afloat (ended in December), but he does not work now, so they may want to wait until it has been six months. What does everyone think?

[ameliabedilia]

I just had a thought- would it be wise for them to do the following-

since they are likely going to stop paying the mortgage, should they use that money to keep the credit card company off their back and hold off them getting sued until they can figure out what to do with that money in the bank account before they file?

[sunshinepa]

Don't have answers for all of your ?'s however....CC companies usually don't threaten to sue, they just do it in my experience. I just got sued by Citi, luckily filed in time. Here was the timeline...got summons 3/11, had 20 days to file an answer with the court, none filed.........would have got a judgement on April 14th so the whole process took about a month. Your friends have at least that much time and can possibly stall longer.

They should immediatly move all money from any accounts associated with any credit.....get new ones. The mothers money should be put in an account with her name on it, that should protct it. Just my opinion, but they could also be on the acct if needed and is should still be protected.

Hope this helps, just my situation with cc's and opinion.

[ameliabedilia]

Thank you. That is encouraging about the money in the bank account.

[GWBcasualty]

Don't be so worried about a lawsuit to a point that you make bad decisions and make your situation worse.

Lawsuits can be dragged for a year or even more before anything happens as long as you answer and you also play a little bit of offense (for example "threatening to sue" can be a FDCPA violation that you can use to leverage your position).

Now. Make sure you don't keep money in any bank that you owe money to.

If you do that they can get the money from your account without a lawsuit.

As far as the house that they are renting... my advice would be to kick out their relative and get some market $$ for rent! $600/mo on a house that commands a $2k/mo mortgage? I don't think so!

[ameliabedilia]

He says he is answering the calls from the CC, and communicating with them. Perhaps that will help hold them off. I will tell him to look into the whole threatening to sue being a violation.

I think they need to dump the house. It's worth 180,000, they paid 210,000 and their mortgage is $2000, which is much higher than rent would be in that area. They could probably only get $1500 if they are lucky.