Now they are calling the loans

[Overmylimit]

I had posted a few days back about possible/certain bk. I have 450k in unsecured business lines of credit. I am behind a few months with most and now I am starting to get the letters that say they are calling the loan/s due and payable, which is crazy if I can't hardly do the monthls payments how am I going to write a check for say 50k. Is this a standard thing for them or is it just because they are business lines?

Thanks, Mike

[AngelinaCatHub]

Yes it is normal. Look on any contract the that print no human can read, only lawyers can make it out. If you default they may "call the loan in" meaning they cancel your time payment and request the whole amount due. Why? I don't know but it is probably a legal thing that sets a timeline towards a suit. 'Hub

[Overmylimit]

Thanks Hub, so now comes the question of Judgements, I read in one of the posts that when they get a Judgement on you they can only take 25% of your disposable income. Is this for each Judgement or all combined? If 9 creditors were to get judgements on me for 450k do thay all split the 25% or do they take turns? Or since these are business lines do they have different rules for them. Thanks, Mike

[chloe0724]

You can only have 25% taken at one time, so they would have to wait in line.

[Overmylimit]

So lets say they secure a judgement before I file bk all of the creditors would be waiting in line and the most they could get is 25% of disposable income. What if you have no disposable income, if I did I would be paying them. If thats the case it would seem as soon as any of them caught wind of a possible bk they would seek judgements right away. Thanks

[AngelinaCatHub]

So lets say they secure a judgement before I file bk all of the creditors would be waiting in line and the most they could get is 25% of disposable income. What if you have no disposable income, if I did I would be paying them. If thats the case it would seem as soon as any of them caught wind of a possible bk they would seek judgements right away. Thanks

[epiphany]

Are you working for someone else or are you self employed?

Wage garnishment occurs when you receive a paycheck from an employer. In California, they can only garnish up to 25 percent of your disposable income but here "disposable" means the net pay after taxes and all allowable deductions (medical insurance, etc). Unfortunately it does not mean what is disposable after all of your expenses.

If you are a very low wage earner, they may not get the full 25 percent as you must be left with at least 30 times the federal minimum hourly wage.

What state are you in? You need to check your state laws for how much can be garnished and what might be allowable deductions. There are just a few states that do not allow wage garnishment at all. Texas is one of them.


You will know well in advance if a judgment is headed your way...you will have time to answer any summons and can drag it out by answering if need be. But if you are just starting to get the letters demanding full payment, you probably have some time before they even file suit, although there is no guarantee of that.

You say you posted about a possible/certain BK. Those two adjectives contradict each other so I can't tell if you are sure that you will be filing but you might as well get ready for it. As Hub indicated, the automatic stay will protect you from any suits that may get filed.

Good luck to you,
ep

[Overmylimit]

I am in California, yes I will be filing but the 1st lawyer I went to wasn't very knowledgeable so I am looking for another. I have an appointment this week with someone else. The other problem was which chapter I can file under. The 1st lawyer told me I made too much and had too much debt to file either, so this has to be sorted out. Oh and I am self employed. Thanks

[AngelinaCatHub]

I am in California, yes I will be filing but the 1st lawyer I went to wasn't very knowledgeable so I am looking for another. I have an appointment this week with someone else. The other problem was which chapter I can file under. The 1st lawyer told me I made too much and had too much debt to file either, so this has to be sorted out. Oh and I am self employed. Thanks

[Overmylimit]

When he said this to me my mouth just kind of dropped, I'm thinking to myself the more debt you have the more the reason! So needless to say I won't be going to them.

[BigJohn]

In my area, virtualy all thr lawyers seem to do is Chapter 7. Maybe he is a Chapter 7 lawyer.

How is your business structured?
Incorporated? If yes, does the business own most of the stocks or do you?

How much is your inventory worth?
Are you retail/wholesale?

Do you own a house? 1st mortgage amount? 2nd mortgage amount?
How much equity in house?
How much is house worth?

How much do you owe on cartruck?
How old is car/truck?

[Overmylimit]

Here is my situation from another thread and no I am sole propeitor.


http://http://www.bkforum.com/showthread.php?t=28153



We are a service business have my home and 2 rental properties all have mortgages for more than they are worth since the housing crash. I do want to keep all of the homes. Thanks

[JRScott]

Here is my situation from another thread and no I am sole propeitor.


http://http://www.bkforum.com/showthread.php?t=28153



We are a service business have my home and 2 rental properties all have mortgages for more than they are worth since the housing crash. I do want to keep all of the homes. Thanks

If you are that upside down on the properties, why would you want to keep them?

[Overmylimit]

Well my house is the house my kids grew up in , my wife will never let it go. We have lived here for 24 years. We rented for years and the owner finally sold it to us in 2004 and since we have completely renovated and added on. When the market was high it was worth 900k (we purchased for 240K) so it wall great now its worth 300-400k. Although we took out a 2nd for the renovations so we owe quite a chunk on the house now. The 2 rental properties, even though their values have dropped to probably less than they are worth, we still generate positive cash flow from them when we pay the loans. Its not a lot but after paying the loans there is still about 750 per month so if we can keep them I would.

[GoingDown]

I am in California, yes I will be filing but the 1st lawyer I went to wasn't very knowledgeable so I am looking for another. I have an appointment this week with someone else. The other problem was which chapter I can file under. The 1st lawyer told me I made too much and had too much debt to file either, so this has to be sorted out. Oh and I am self employed. Thanks

If you are self-employed, they can't garnish your wages. It becomes infinitely more difficult for them to take your income when you are self-employed because they have to do judgment debtor exams which cost them a lot of money, and if you take steps to make yourself as judgment proof as possible, they have a very difficult time taking your money. I've read debt collector forums where the debt collectors themselves say that when they find out the debtor is self-employed, they don't bother with them. They just sell the debt to another junk debt buyer, because it's too much of a headache.

But... since you are self-employed, you may have assets such as tools of the trade, etc., that they may want to use a writ of execution to get. Check your state exemption laws to see if your assets are exempt. If they aren't exempt, then you should probably just go ahead and file BK and get it over with.