Announcement

Collapse
No announcement yet.

Collection Judgement when your basically judgement proof

Collapse

Unconfigured Ad Widget

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    Collection Judgement when your basically judgement proof

    My income is low from SSD, my condo and IRA exempt in judgements in FL, I have a 20 year car w/150,000 miles worth maybe $3000 and not much in house hold goods. Do I send this info to the creditor when they sue me? Or if we go to court and really have nothing of value to take, what happens?

    Do they get a judgement and see if I ever start working?

    #2
    You have pretty much figured out what happens. We don't like to call it "judgment proof" because no one is really judgment proof. We like to use the term "collection proof" to define a debtor from whom a creditor is unable to levy or garnish.

    If a creditor sues you and wins a judgement, they usually send an interrogatory to determine your assets and whether you're working. (Full disclosure, I have never been personally sued so I am just repeating what I understand to be the process). You will have to tell the court and/or the creditor that funds in your bank are derived from the Social Security Act and are protected by law, as they probably don't know that money in your bank is protected by law.

    Being collection proof can have its advantages, but the creditor can actually get a judgment and may be able to renew it for up to 20 years. If you're lucky, the creditor may already understand that you're colleciton proof and ends all attempts to collect because it's fruitless. However, that would not stop the original creditor, or a subsequent assignee, from looking at this again. That's the real problem with "junk debt buyers" (JDBs) and how bad debt portfolios are resold over and over again. You may have to deal with a lot of letters demanding payment, but if you make it through the statute of limitations period, you could be pretty free after that.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog


    I am not an attorney. Any advice provided is not legal advice.

    Comment


      #3
      Thank you, yes collection proof makes more sense. Is it worth writing the creditor once the demand letters start with evidence of funds, or does that just draw more attention to your case?

      Comment


        #4
        It's never a good idea to interact with a creditor as you could a.) reset the statute of limitations on collection by promising or other saying that you will pay, or b.) send them running to the courthouse steps quicker.

        There may be others that have better experience with being collection proof and how to interact or not interact with a creditor. Maybe bcohen has some advice.
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog


        I am not an attorney. Any advice provided is not legal advice.

        Comment


          #5
          If you are truly collections-proof, then I fail to see how you benefit from communicating with creditors at all. Those creditors or JDBs who like to sue are not going to be dissuaded by a debtor's claim of being collections-proof. It is a numbers game to them, i.e. they know for every X number of lawsuits filed, a certain percentage of debtors will do nothing, allowing them to obtain a default judgment and begin garnishing wages and bank accounts for relatively little cost. Out of the remaining percentage, some will declare bankruptcy, and some are truly collections-proof, but this doesn't increase the costs of filing the lawsuit. Only a very small percentage of debtors even bother to file an answer (the first step in contesting a lawsuit) and it is only at this point that the plaintiff's costs begin to increase.

          Even so, I believe that the collection attorneys who file these lawsuits are paid on a contingency basis, because otherwise it would not make sense for companies such as Discover to sue all debtors, even those who are obviously unemployed and unable to pay.

          It sounds to me like you have little to gain by responding to any lawsuit until and unless the creditor wins a judgment, and you are served with a debtor's exam. At that point, you would appear, and inform the court that you are unemployed and your income is from SSDI and an IRA, which are exempt from judgment enforcement. The creditor would be out of luck at that point.

          And no, they are not automatically notified if you do start working in the future. They would have to rely upon a judgment enforcement service, which mainly works by scanning your credit reports to see if any new positive accounts appear, or if any applications for credit/bank accounts/rental housing have appeared, and they can see whatever employment information was listed on said application. If you do not open any new credit accounts, and do not list your new job on any application for credit, banking, or leasing , it is likely that a judgment creditor will be unable to find out about it.

          Comment


            #6
            I am wondering how to pay mortgage and HOAs if I get a judgement against me. I can protect my SSD account with no more than 2 months income in it. However I have to pull money from my IRA which goes into a separate account to cover mortgage and HOA. So if I get a judgement and that acct is fair game, I assume they can drain it or freeze it?

            If I get paper checks instead how can I cash them to pay mortgage/HOA? If I use the SSD acct to cash them, say get a money order then the SSD account is no longer protected?

            Can you use a “check cashing” company for checks of $1000?

            I just get $1100 in SSD so even if I juggle and pay mortgage/HOAs from SSD I still need some from the IRA to eat....so not sure how to accomplish that. Need to keep current on condo for at least another 10 months or year to get 2 year residency in Florida should I need to file CH 7.

            Anyone been sued by BBVA COMPASS or Barclay Bank? I will be in default with both starting next month. Over $10,000 for each. Do all Credit Cards / collectin agencies sue?

            Geting scared now it is all going to go down.

            Comment

            Unconfigured Ad Widget

            Collapse
            Working...
            X