What happens if you get sued by a CA, they win and you don't pay?

[debtmonster]

I always see people who buried in debt (like me) and are all worried about being served?

If you're broke and have no money, what's the worst that can happen to you if they take you to court and the CA wins? If you simply don't pay them, what is the worst that can happen to you? Do you go to jail for not paying?

I am self-employed, so there's no employer to garnish wages. What could they ever do to me? I have like 62 people on my list that I am including on my bankruptcy as soon as I finish paying my attorney's retainer. I am absolutely amazed that not one of these people in nearly 20 years has ever come after me. All I get is simple letters in the mail. I haven't gotten but a few phone calls in 2008. I tell them to go pound sand and never hear from them again.

I see people always getting choked up about CA's coming after them and wonder what the big deal is. Am I missing something? Should I be scared? Back in 1994 I was nervous. But now I feel like I am totally numb to dealing with any person trying to collect money from me today. I am just to the point where I no longer care and nothing they can say or do will scare me in the least bit. That's just the way I feel about it now. As far as I am concerned, they can come here and take anything they want. I no longer care about having "stuff" any longer. If I came home and my house burned down with everything in it, I'd be happy that I would not have to worry about it anymore. And I haven't paid my home owner's insurance in 3 months!

If they ever did put me in jail, I would simply tell them, "Great! Free room and board!"

[treehugger1]

It is very unlikely anyone will throw you in jail. But, always read your mail and keep an eye out for a summons to court for a debtor exam, etc. Since you have nothing worth taking, there is not any reason to avoid a summons to court.

In terms of how you feel, I also feel the same way. I don't feel pathetic, a deadbeat, or anything when it comes to debt. It turned out the way it turned out. I chose the path, and there is nothing any creditor, CA, or JDB can say or do that will faze me. I can't go back, so I'll keep moving forward. There will be obstacles, but I'll crawl under or climb over them as they appear.

[debtmonster]

Amen to that.

Yeah, I've never gotten served but one time in 20 years. The only reason for that is because I was over 90 days past due and would not give my car back as a repo. They wanted to take me to court for not giving the vehicle back. So I delivered it to the bank, put the key in the box and bought a used motorcycle for $500 and drove that around. That saved me from having to pay car insurance in my state as it's not required for motorcycles that are not financed. I put 18,000 miles in 1 year on that thing and all I did was pay for gas. I LOVED IT! I wish I could do that again. Maybe if I move to a bigger town, I'll get another motorcycle or a big scooter over 400 CC's.

[Pizza]

You might want to be careful about the situation if you actually get served. Jail time, probably not. But from all the research and information I've gathered on this site, there are a few things to watch for. One being cross-collateralized loans. Another being liens on property (which keeps you from selling your house). Also, it sounds like the attorney fees have the potential for going up significantly.

The worst of a bad lot has to do with the bailiff showing up at your house and liquidating. He can't get in by force, but can get in peacefully by the means of his choice (unlocked door, window, crawlspace, etc.) at which point all he has to do is put a finger on household items and it becomes his -- not a lot of property is protected from it -- just what is considered "living necessities", things that belong to a child, and things that you don't actually own.

I'd like one of the big boys to chime in here, because I'm sort of at the end of my rope (running low on cash with no income) and wanting to know when/if to file.

[debtmonster]

I'm giving my house back in the bankruptcy, so they can feel free to put all the liens they want on my house and cars. Everything has negative equity, so they can have at it for all I care.

Man, I CAN'T WAIT T FILE!!! I just can't raise enough money to pay the lawyer, plus I have to keep dragging it out to get our average income to drop. Each month I go, the lower and lower our median goes. Last I saw the median for our state was around $50,300. I don't want that to drop and make it harder for me to qualify for a Ch. 7. So I wanna get this done as quick as possible. Then I am hoping we can stay in this house long enough for me to bankroll money to rent a place in the big city. We are WAY rural. 25+ miles from all major grocery stores, Wal-mart, restaurants, etc. I bought this house out of desperation. Biggest mistake ever. I should have just stayed renting.

[treehugger1]

Pizza, many states have great exemptions for household goods, etc. For many states these exemptions are the same as those allowed in BK. In my state, the exemptions for household goods, "wild card," guns, etc are in teh $1000's of dollars. So, why a bailiff or sheriff may be able to seize personal property under judgment, it rarely pays off, especially if the debtor claims their exemptions.

[Pizza]

Pizza, many states have great exemptions for household goods, etc. For many states these exemptions are the same as those allowed in BK. In my state, the exemptions for household goods, "wild card," guns, etc are in teh $1000's of dollars. So, why a bailiff or sheriff may be able to seize personal property under judgment, it rarely pays off, especially if the debtor claims their exemptions.

Thanks, TH, I understood all that. What I (think I) understood though is that you only get those exemptions if you file BK. If you just sit around and let the creditors sue you (the topic of this thread), I think that's when the bailiff comes into play.

[debtmonster]

I thought they just get judgments and put liens on your house/car and wait until those items are sold?

[Willy13]

Thanks, TH, I understood all that. What I (think I) understood though is that you only get those exemptions if you file BK. If you just sit around and let the creditors sue you (the topic of this thread), I think that's when the bailiff comes into play.

Not sure about your state but in mine all but one exemption goes for judgments also. At least that is what it said on the sample writ of execution I saw. These are state exemptions by the way and not the federal BK ones. Maybe that is what you were thinking

[Willy13]

I thought they just get judgments and put liens on your house/car and wait until those items are sold?

This lady had her house sold out from under her over a $68 dental bill.

http://abcnews.go.com/Business/PersonalFinance/Story?id=4896048&page=1

[debtmonster]

Those people who did that should be beaten in the street in front of people to watch. That is horrible!

[CompTweaker]

Learn how to fight lawsuits, or hire a lawyer for you after learning as much as possible about the process yourself.

This web site http://www.debt-consolidation-credit...play.php?f=177 has a lot of case law and members willing to help, but you have to devote a lot of time to truly understand what you need to do. Go there and start spending an hour or so per day just clicking and reading, and remember each state has its own civil rules of procedure, and you can usually find those online.


Each state also has its own exemption amounts that apply to BK and judgements, so you need to find out which exemptions and how much apply to you in your state. Generally, if they get a judgement and you own some property, they will file a lien on it and it will sit until you satisfy it. You may be called in for a debtors exam, but they will have to get a judgement first. Why let them get an easy judgement, just answer the summons and send them on a paper hunt proving the debt is yours and that they have the right to collect it.

[debtmonster]

just answer the summons and send them on a paper hunt proving the debt is yours and that they have the right to collect it.

I like that idea! It can even be made into a fun challenge! Maybe not for you guys... but for me it would. I am so brain dead from all of this debt stuff already. I need to poke some fun into it for a change.

[treehugger1]

In Oregon, the federal BK exemptions are not allowed. You are entitled to the same exemptions afforded under the "judgment" exemptions. These are similar and, in some instances, more liberal than the federal BK exemptions. As an example, you are allowed up to $7500 iof exempt wages in a bank account. There are more folks out there who realize this than I would have assumed a couple of years ago. There are plenty of folks who are "bankrupt," but their assets fit under their state exemptions. As a result, they do not file BK, but choose to go an informal path where they let the legal system work it all out.

This entire issue is going to get tricky in the future. Here's why. Suppose you are buying a house (no one OWNS a home until they have the deed in their hands) and you are in financial trouble. If your equity in the home exceeds your state exemptions, then you are possibly open to a lien that can be acted upon (plaintiff moves to sell your home to cover the defaulted unsecured debt that they have a judgment for.) I'm not sure how this plays out in the end. But, consider this. Suppose in some strange circumstance your home is put up for sale. After the sale, they do have to account for your state exemption. Whatever remains they can apply to the judgment. In these times of DECREASING home value, what creditor in their right mind would force the sale of a home (and cover their court costs,) when they realize the ultimate outcome will net them $0? You have first right to the exemption amount. This can get very complicated and the rules are different from state-to-state.

The nice thing about BK is that it can protect your home and other secured assets that are beyond your exemptions. In addition, you get the automatic stay that protects you from harrassment form creditrs/CAs/JDBs.

Each state is different. Keep in mind that "not paying your debt" is generally a civil matter. It is not a criminal matter. You are not expected to answer a "complaint," but you are expected to appear in court if summoned to do so. As HH stated in another post, even if you are in contempt, it could be very unlikely that the judge will have you arrested. Again, in these very difficult financial times for government entitites (even the court systems,) I would hazzard a guess that civil matters related to debtor issues are not the top priority. If such is the case, we will need to build thousands of new prisons nit he next couple of years. LOL.

You roll the dice.

[debtmonster]

Good post!

The next question is... how can I buy a house and have it in another name or corporation or something to protect the asset? I think Lee Majors (the Six Million Dollar Man) did this for his house in Ft. Lauderdale. It was in some corporation name instead of his real name. I want to do the same thing next time around so that I will be law-suit proof.

Can this easily be done?