Not paying credit cards

[fugazzi]

I'm going to try and stop paying my cc's for about 3 months before i file. My question is, can they levy my account or garnish wages without a judgement? They have to get a judgment first right? And i would know if they get a judgement first, cuz i will get a notice that they are filing a law suit, right?

Probably a stupid question, but i just want to be sure they can't get the money i'm putting away to prepare for 13.

Thanks!

[free2breathe]

Yes, they would have to get a judgment first. It's not a super quick process. You should be fine for three months at least. They will first try to encourage you to pay for a couple of months before taking further action. After they've tried that, they will start hinting at getting a judgment to try to "scare you" into paying. Then the creditor has to file their claim in court. You get a notice stating they've filed and when the court date is set. You get a chance to answer. At that point you can request documentation of the debt, etc. By the time all this happens, you will be ready to file anyway. It is very common to quit paying debt and save the money for the attorney fees.

eta: once they get the judgment, they then have to follow through with paperwork for garnishment/levy.

[fugazzi]

Yeah, my dad told me back when his biz had some trouble that 2 cc companies filed suit, he went to the court date and when the judge asked if he owed the debt, he said "i don't know, i need to see the documentation to see if this is accurate" and the lawyer there said he'd have to get it. Then he never heard back from them, that was 10yrs ago. But I'm sure they are probably more aggresive now since the whole credit crash.

[BKParalegal]

There are some ways they can and that is if you bank at a place where you have a line of credit, then if it is in their contract regarding defaulted loans, they could do an offset where they take the payments right out of your account. Credit unions are famous for this, so just don't bank where you have debts until after you file, then they can't touch you.

Good luck

[kornellred]

If you are certain you are going to file for bankruptcy, there is no point whatsoever in making payments to unsecured creditors. The wheels of progress turn slowly with respect to creditor reaction to default. It's all in the play book and most large creditors use the same one.
No competent Chapter 13 attorney will file a debtor's petition until it is certain that there has been no use of credit for 90 days prior to filing. If you stop paying now, your accounts will be closed and you will not be able to use credit for the three months that you are planning not to make payments anyway.
If you are 100 percent certain that you will be filing for Chapter 13 bankruptcy, stop paying immediately and just let things develop as they will. There is no need to continue to pay, unless you are going to try and pull a fast one in terms of asset manipulation. Don't even think about it - they'll get ya.

[fugazzi]

not following your last 2 sentences, what do you mean by pulling a fast one with asset manipulation.

[kornellred]

When a debtor is at the point where Chapter 13 appears to be inevitable, the first thing that comes to mind is: how can I arrange things so that I get to keep much of what I own. This starts a mental process whereby the debtor starts to devise a strategy. Since you reveal that you plan on not paying your unsecured creditors for three months before you file, it means that there are things you need to do before you stop paying. And that implies that for now, your creditors need not have any idea of what you are planning to do, and the best way to do that is to keep paying until you are all set to file for bankruptcy. What happens between now and when you stop paying is to be none of their business.
I am not implying that what you plan on doing is underhanded - I have no idea what your motives are. In all probability, you are simply doing all that is possible to maximize your situation. Who wouldn't?
The last two sentences of my response were meant to be a warning that there are mistakes that can be made when planning for a bankruptcy.

[fugazzi]

yeah i basically can't pay them anymore, because i need to use the money to pay for some living expenses, and pay for the attorneys fee, because of my income i will be doing a 100 percent payback.

[BrokeinMD]

When you stop paying the CC's, you'll begin to get phonecalls, emails, and a few nasty notes in the mail. In my experience, I didn't get anything serious until Citibank took me to a collection agency, which I received notice right around the time that I filed. That was a six month break from paying. Take care of what you need to take care of and good luck!

[fugazzi]

Thanks for all the input. Since I will most likely be forced to pay 100% I just want to get things in order and then file, cuz the longer I'm not paying them the longer the interest and fees are adding up and will only increase my payment. I was just worried that if i missed one payment they would start sueing. I've never missed a payment on anything in my life (33yrs) and it's kind of freaking me out.

[BrokeinMD]

It is a little weird at first, Fugazzi. I remember my anguish over the first missed payment. We've all been there. It will get better!