Need to File ASAP due to Suit but by Numbers May Have to Wait.... what to do?

[98daffodils]

Hi!

In 2021 I had to file a Chapter 13 due to a medical debt lawsuit. My divorce took my house and my savings before that, so I had no choice but to file, however it truly should have been a 7 and not a 13. I had a second, PT job that put me over the median income - however I had child support obligations and other court-ordered costs (paying Ex husband's legal bills and funding a college 529) that made it unaffordable. My payments were around $1600 a month and I just could not do it. My child support to my ex (we have 50/50 custody) are based off percentages - with me owing 58% of any expenses he has for the kids. So for example if in January he paid $100 for school supplies I would only owe 58.00. But, if in May he paid $2980 for their soccer team fees (they play travel) then I would owe $1728. I tried to explain this to my attorney (she has since been fired) but she said the trustee would never budge. Ultimately I had to have the 13 voluntarily dismissed as I couldn't afford. After several months of research I have found that she has many complaints about pushing people into 13s because she gets paid more... that is another issue I will handle later....

For now I have a dilemma and I don't know what to do....... I was preparing to file again (because these bills won't go away). I no longer work the second job (since the end of March) and I have more medical debt (my daughter had an accident and also had sports injuries so lots of medical bills). I was looking at new attorneys, pulling together my information and then BAM! I got a Warrant in Debt (that's what Virginia calls it) from a law firm who represents a sports medicine doctor we saw for my daughter. I had tried to pay them but they would not accept since I was in a bankruptcy. I guess since dismissed they came for me. Sad part is, it is only for $1000 (they have tacked on 18% interest and attorney's fees making it closer to $2100. The hearing for this would be June 21. The WID says I have to show up IF I want to ask for a trial, otherwise I don't have to show up. But, if I don't show up, it is a default judgement and it will be entered right then- meaning they can garnish my paycheck or levy my bank.

I don't have a lot of cash, but I have been saving since the Ch 13 dismissal. My new attorney has run the numbers and he believes I qualify for the Ch 7 now since the old PT job will roll off and my expenses were not calculated correctly in the first place. Plus, the addition of the medical debts. But he is thinking that I should wait a bit before I do file to ensure that the old PT doesn't get fully counted.

Here is my concern -- the hearing on the suit is June 21. If I don't go, they will enter a default judgement. This CANNOT happen. I have two kids and I can't have these people taking money out or freezing my account or levying on my car. I mentioned this to my lawyer and he said not to go, to send in a letter asking for a trial. I know he is the lawyer, but the WID says I have to APPEAR if I want to ask for a trial. He told me not to go, absolutely not, because they can ask me under oath while there if it is my debt and I must answer. And of course, when I do, it will be automatic judgement anyway.

Ideally the best thing would be to file right away. I know the automatic stay is different the second time around, but I know it would stop the suit. The other part of me thinks it is best to just pay these people and have the thing dismissed. I don't want to risk having a judgement entered before I file. I know filing would stop the suit, but I am in a timing crunch. What do you guys think?

Thanks!

[justbroke]

I would listen to my current bankruptcy attorney. You don't not want to be under oath and make an admission in the court. Reminds me of the time when people would go the foreclosure hearing to "explain" things to the judge. On Florida's rocket docket, the seasoned judges would instantly shut down the homeowner and say "there's only one question I have for you; did you pay?" If you say no, instant grant of the foreclosure action and the date of sale set 30-days out from that day.

Now, having wrote that... I would just listen to what my attorney is telling me. The creditor would likely need to first get the summary judgment, then ask for a wage garnishment order. That's not going to happen in a day, and will likely be several weeks before they "might" garnish your wages. I say might because most states have formulas and it's usually a maximum of 25% of your "disposable income" which has to be calculated. If you have children and are under the median, it's possible that your "disposable income" is very minimal.

That's all I can say. You should try asking your bankruptcy attorney if they know about wage garnishment in your State and how quickly such an order can be done. Also ask that if the creditor gets such an order, can you file something with the court that shows your disposable income so that they don't just simply take the maximum amount allowed.