The Treehugger Saga

[treehugger1]

Update:

A couple of years ago I had 22 unsecured accounts totaling approximately $70K. I defaulted on all of them in the past 24 months. Local creditors all took me to court, and through mediation and wage garnishment, all but one local creditor has been satisfied.

I have one new agreement with the remaining 10 unsecured accounts. I am down to 9 accounts totaling approximately $54K (down from $70K+) Of these nine accounts:


4 CAP1 accounts have been bounced around CA's and "law firms." I have never received debt verification on any of these accounts. The oldest default is now approaching 2 years! CAP1 was never willing to work out a five year low-interest payoff. They were th eworst in my experience.
2 BOA account. Sold to a national CA. They have never furnished verification of the debt. Second account I have a 5-year payoff plan
2 Citi accounts. Assigned to collections several months ago. They have not furnished verification of debt.
1 Credit Union account. This went to an out-of-state unregistered CA and I DV'd and reported them to my state AG's office. They sent the debt to a local CA with a 30% collection charge added. I DV'd local CA two nmonths ago and have not received verification. Duh, no judge in my district is going to allow 30% collection charges on a secondary debt being collected by a CA collecting on original debt and collection's debt outside the state. This is also a non-small claims debt, so the local CA was probably smart enough to file this in the garbage.

For the past 24 + months, this has been my second job. Thanks to folks on this forum and the full protection of a potential future BK, I continue to survive.

I firmly believe that never ignoring my debt and exercising my rights under civil laws has been my keeper.

It is most likely that eventually I will need to retire and file a BK 7. In the meantime, life has been kind to me. I continue to put away protected money in retirement accounts (not a given in a BK 13) and continue to work with my $70K in student loans.

If I could have BK 7 my unsecured debt, I would have done so immediately. The overall economy in this country would have been better for it.

Credit scores: 680 - 720 (24+ months ago) 520 - 560 (currently) This includes all the chargeoffs, collections and public record judgments. Not so bad, really! LOL



Just my update.

[deepend]

I've been reading your posts for weeks now and it's been very interesting and encouraging to hear about alternatives to immediate BK. You mentioned in another post that wage garnishment of 25% was much lower than what you were paying on just minimums for cc's and you could live just fine on 75% of your income. That's true for me also right now (as long as I don't get caught in the mass layoffs happening all around me!) I have a mortgage on a home which has perhaps 15k equity and am current on it. I worry about filing and getting into a Ch 13 repayment plan that is as hard or harder to live with than the all the debt payment I've been struggling with until now, and also what effect filing in the near future will have on other people in my life. I just stopped paying this month, so haven't had all the calls and letters yet; I don't know how much that will bother me.

So, if you don't much care about your credit score for the moment, and have enough income to survive a wage garnishment, waiting is an option! And even though I have a house, isn't it true that any lien on the home would be stripped by filing BK as long as the home qualifies as an exempt asset?

I'm not sure what I'm going to do yet, but thank you for posting your experiences so others know there are options.

Did you have a background in law before this or did you pick all this up on the fly?

[treehugger1]

I don't have a mortgage, but I was told by all legal counsel folks that I spoke with that if an unsecured creditor/CA had a lien on one of my automobiles, then this could be removed and these folks would become part of the BK 13 creditor profile and would be expected to file a claim. What you need to keep in mind is that there are so many interpretations of the BK rules that can vary by state and district. One of the things I first did was speak with several local BK attorneys. I discovered that all of them said the same thing when it came to secured and unsecured debt. These initial consultaions were quite enlightening to me.

I do not have a degree in law. I do have an advanced degree in theoretical mathematics, and I believe this has been more than helpful in understanding the laws of my state. Legal statutes are very similar to those of fundamental mathematics; "If this, then the following applies." Once I understood the process and potential repurcussions, then I just followed the law. I have attended several courtroom settings in my local jurisdiction, including BK's. I attended one local debtor examination, several small claims trials, etc. These were very helpful and showed me that attorneys are not always the best and brightest on the block. This is not to say that they are not well-versed, but they do fumble when the defendant is a well-educated consumer.

The most important thing that I've learned is that the "law-is-the-law." The law is open to everyone willing to do a bit of due diligence. I am still not sure if I would tackle a non-small claims suit. I would have to measure the claim and make a personal decision as to whether or not I would spend $180 to file an answer and set the wheels of arbitration in motion. For almost all civil suits under $50K in my state, an answer to a summons puts the case before arbitration. The problem with pursuing arbitration in my state (Oregon) could result in additional costs (paid for arbitration) that I would not deem worth it. The other thing about answering a non-small claims suit is that I would potentially open myself up to discovery queries from the plaintiff's attorney. I really don't have the time nor patience to go this far. If the suit and amounts seemed reasonable (I owed the debt and collection fees seemed reasonable,) what could I possibly gain in the long run other than time?

I went from thinking (many months ago) that my salary would decrease and a BK 13 was in the cards. Since that time, my salary has increased by 40%. Thus, a 25% wage garnishment doesn't bother me.

I have also researched and read a great deal about "informal bankruptcy." This is the case where a person simply stops paying their debts and let's the standard legal protocol take the lead. The research suggests that this may be far more common than folks filing BK. I've had plenty of panic moments. For a while, I was concerned that I could be forced into an involuntary BK, but I have since determined that such is the case only under Chapters' 7 and 11.

The great thing about BK is that it brings the comfort of an automatic stay, and the future is clearly understood; 7 or 13. On the other hand, I am two years from qualifying for an early retirement, drawing my pension, and qualifying for a BK 7. I hope not to do this, but knowing I have the future protection of BK is very powerful. I will probably work until I die.

In addition, my father is quite elderly with some severe health problems. I have a daughter who has also needed medical attention. While my father and daughter are both adults, I feel a responsibility to insure that they can live comfortably without the threat of overwhelming medical bills. It's not that I'm altruistic, but I know my family would help me if I needed the same type of help. Financial concerns are secondary. The last thing I want at this time of my life is to be in a BK 13, and have my hands tied from making decisions by some trustee.

[SobStory]

I have enjoyed your posts and wish the best of luck. Thanks for sharing your insight with us.