Bets On Who Is Going To Blink First (Mother vs Cap. 1)

[tobee43]

They didn't want to budge till she started listing medical expenses-- some of which their behind payment on, which is about 66%+ of their monthly income-- insured and uninsured, then the utilities, by end there simply was no money for anything unsecured. And the $1500 is a maybe seeing has they are so far underwater at the moment, the lawyer thinks the trustee might just wave it off.

wouldn't that be GREAT if the trustee just waived it off. it's such a hassle with some of these creditors..it's like......what do they want when you have nothing to give??? BLOOD! i guess.

[BrokeIn2010]

They didn't want to budge till she started listing medical expenses-- some of which their behind payment on, which is about 66%+ of their monthly income-- insured and uninsured, then the utilities, by end there simply was no money for anything unsecured. And the $1500 is a maybe seeing has they are so far underwater at the moment, the lawyer thinks the trustee might just wave it off.

[tobee43]

She signed the final settlement yesterday evening-- I was with her, loooong meeting done at her attorney's office and with the other side on the phone. They agreed to drop the provision about not filing it in Ch. 7 (so debt go bye-bye in a few weeks); no down payment-- once they went over the finances and the medical expenses started racking up you could hear in his voice the Cap. 1 lawyer sort of realizing they've got a worthless judgment; They are going to take a lien on the house (they wouldn't back off that) but have agreed not to go any further so long as she either pays the $75 a month or files the debt in BK; no levies or garnishments at this time; she misses one payment she has 72 hours to pay the whole thing off, but like her lawyer said she'd be required by-law to stop payments to ALL her bills during the BK process anyway so that part's not legally binding after the Ch. 7 papers are filed and the stay kicks in. She might, MIGHT, have to "buy back" the difference in her exemption of the equity on the house, but that'd only be about 1500 dollars over a 12 month period versus 6000 over a 12 month with a balloon.

that sounds more like it...that 6k with a balloon, sounded like a nightmare....i'm all for the 1500 over the 12 month period!! that's great news for her!

[BrokeIn2010]

She signed the final settlement yesterday evening-- I was with her, loooong meeting done at her attorney's office and with the other side on the phone. They agreed to drop the provision about not filing it in Ch. 7 (so debt go bye-bye in a few weeks); no down payment-- once they went over the finances and the medical expenses started racking up you could hear in his voice the Cap. 1 lawyer sort of realizing they've got a worthless judgment; They are going to take a lien on the house (they wouldn't back off that) but have agreed not to go any further so long as she either pays the $75 a month or files the debt in BK; no levies or garnishments at this time; she misses one payment she has 72 hours to pay the whole thing off, but like her lawyer said she'd be required by-law to stop payments to ALL her bills during the BK process anyway so that part's not legally binding after the Ch. 7 papers are filed and the stay kicks in. She might, MIGHT, have to "buy back" the difference in her exemption of the equity on the house, but that'd only be about 1500 dollars over a 12 month period versus 6000 over a 12 month with a balloon.

[BrokeIn2010]

That's what I'm trying to talk her into doing, but she's afraid they'll jack up the amount again. The "continuance" apparently was "well if she doesn't pay, this the date she's showing up in court" they'll drop it if she pays them.

[tobee43]

Okay she's talked to her lawyer this morning: He settled it for $75 a month and total payment of 6000 dollars (they sued for 2500 twice what was originally owe, but the settlement says she has to pay all the court costs), 12 months with a balloon payoff in 12 months of the remaining debt, and they want her to agree not to put the debt into her Ch. 7-- if she doesn't agree to their terms they will go after a lien/sale of her home. Her attorney said just do the reaffirmation and pay it, reaffirm the one debt, and discharge the rest. I told her it sounded to me like she was getting screwed with her pants on.

brokein...yes, i'm really surprised her atty did help her better negotiate the settlement amount?

is it possible for her to seek another atty's advise about this??

[BrokeIn2010]

Okay she's talked to her lawyer this morning: He settled it for $75 a month and total payment of 6000 dollars (they sued for 2500 twice what was originally owe, but the settlement says she has to pay all the court costs), 12 months with a balloon payoff in 12 months of the remaining debt, and they want her to agree not to put the debt into her Ch. 7-- if she doesn't agree to their terms they will go after a lien/sale of her home. Her attorney said just do the reaffirmation and pay it, reaffirm the one debt, and discharge the rest. I told her it sounded to me like she was getting screwed with her pants on.

[debee]

Glad it's working out, Broke.

[catleg]

Excellent. Probably the best outcome of all.

[BrokeIn2010]

Looks like (according to the court's clerk, seeing as Mom attorney is out sick and not returning calls at the moment) the Judge granted a continuance till some time in January (they'll mail her the exact day and time). Which is going to put it past her BK filing date if all thing work out.

[catleg]

As stated above, the lien is voided in BK to the extent it impairs an exemption.
Meaning, if she has no equity or less than what she's allowed to keep, it's gone.
The judgment would need to be vacated by a motion in the state court that granted it, usually not a problem.
The attorney would most likely work out a stipulated judgment with the creditor by which she would make regular payments and only create a court judgment and lien if she defaults on the stipulated judgment, but she'll hopefully just be filing BK which would end it all.

I'm not sure what it's like in TN, here in NJ the creditor needs to get a judgment and then after a diligent search for personal property it can be docketed against any real property of the debtor within the state by making a filing.
At that point they have to go through the sheriff's sale process against any real estate to recover money.

The key take away is to avoid letting judgments get created if you have equity in real estate, this can result in unsecured debt becoming secured.

[BrokeIn2010]

Mom got off the phone with her attorney about an hour ago (thankfully she taped the convo...yeah I'm paranoid these days). He told her that he had it worked out, but he couldn't give her the details till after Wednesday morning, when he and the other attorney got with the Judge in pre-trial. She doesn't have to appear and shouldn't be at the court house, and he said she'll be be happy with "the deal" but he wants to get everything locked down before he brings her to the office to sign the papers. She's worried about not being there and the fact that he's not giving her any details; I told her that if they get a default judgement and there's no "deal" and there was never any "deal" and the attorney was blowing smoke, all she needs is her tape from today's convo and she can't probably roast some a$$es over it.

[BrokeIn2010]

Between the exemption and the equity of the house? She's about 2000 or so above the exemption (7500 in TN). And the attorney said she had to wait 8 years from her last Ch. 7. Which is way she went to one of those Debt Management companies, she was trying to stay out BK and they more or less drove her directly into one anyway; she'd been better off filing a Ch. 13.

[debee]

Do you know how much equity she has?

I don't know about TN but it may be that the plaintiff can also use the services of the sheriff to levy on your bank accounts and garnish wages.

I wonder why the lawyer didn't just head them off at the pass & file...

[BrokeIn2010]

See that's what I would think would be the bigger concern: The Trustee possibly forcing a sale. I can't see Cap. 1 trying to force a sale for a couple of thousand-- lien, yeah, sale, no.