Chapter 7 or Judgement proof

[rmab46]

I live in Arizona. I have started filing for bankruptcy due to the $71K in Credit card debt from various banks. I ony recieve VA disability and SS Disablity. We do own a home but are upside down by 100K due to the economy. We also own 2 cars but we are upside down on those as well.

We are told I am judgement proof but my lawyer also tells me I can file for BK 7 because I meet the guidelines do to income.

What is my best option? Going ahead and filing for BK 7 or letting it ride and just see if someone files a judgement against me and if they do the can get nothing. I already informed the banks that I am permantly disabled

RS

[Floridagail]

Hi,
I am judgement proof, I also filed chpter 7;I did not really want to. I waited for lawsuit to file to takeaction. They sued me and of course got the judgement, but then they ask for cmplete financial statement filled out thru the court. They can still try to freeze your bank account even if you are judgment proof. They can freeze it and ask questions later so definately change bank accounts for your money from what you are using now.
Capital ONe is especially fast at filing judgment. I stopped 24 months and finally filed, I wish I would of done it sooner it cost me 1200 to 299 filing fee, but worth no worrying anymore. You can ride it out until you are sued, but it is just longer until your credit record is cleaned up. Good luck

[floridian]

you might want to get a second opinion from another lawyer... i was in the same boat and found out that even though you pass the means test, they can put you in a chap 13 due to too much DMI from the SS.. you arent judgement proof, just collection proof...

most on this forum will tell you to file BK, even if its a 13....you can live in a lavish home and file a 7, but too much SS will put you in a 13 even if you live in a trailer.....

[rmab46]

Judgement proof

you might want to get a second opinion from another lawyer... i was in the same boat and found out that even though you pass the means test, they can put you in a chap 13 due to too much DMI from the SS.. you arent judgement proof, just collection proof...

most on this forum will tell you to file BK, even if its a 13....you can live in a lavish home and file a 7, but too much SS will put you in a 13 even if you live in a trailer.....

That is my concern. I have 71K in credit card debt. Chase I owe 15K, GE Money, 11K, and B of A 43K. I get about 3100 each month from the VA and about 2500 from SSD. I have a mortgage payment of 2100, and 2 car payment totaling 950. 500 in child support and the rest is the monthly stuff like food, elcectricity, gas, gas for car, insurance for cars, ect. My main concern is get all the way to the final proceeding and have the judge decide to push me to chapter 13. Each month with my wifes money (appx 500.00) per month we get about $6100.00 tax free & with all the bills they come to about $5500.00...What do you think?

[rmab46]

Bk7

Hi,
I am judgement proof, I also filed chpter 7;I did not really want to. I waited for lawsuit to file to takeaction. They sued me and of course got the judgement, but then they ask for cmplete financial statement filled out thru the court. They can still try to freeze your bank account even if you are judgment proof. They can freeze it and ask questions later so definately change bank accounts for your money from what you are using now.
Capital ONe is especially fast at filing judgment. I stopped 24 months and finally filed, I wish I would of done it sooner it cost me 1200 to 299 filing fee, but worth no worrying anymore. You can ride it out until you are sued, but it is just longer until your credit record is cleaned up. Good luck

I only get VA disability and SSD. I don't think the judge would put a judgement against me when they know I only receive that money. I am trying to stay away from chapter 7. I am afraid they will look at my financials and put me to a chapter 13 and then I will have nothing to survive on each month. I started the BK7 process but I am not sure what to do

[rmab46]

you might want to get a second opinion from another lawyer... i was in the same boat and found out that even though you pass the means test, they can put you in a chap 13 due to too much DMI from the SS.. you arent judgement proof, just collection proof...

most on this forum will tell you to file BK, even if its a 13....you can live in a lavish home and file a 7, but too much SS will put you in a 13 even if you live in a trailer.....

Unfortunatly my lawyer will not give me straight answers until I am fully paid up so that is why I am asking questions. Maybe it will be wise to wait and see who files what. If I do get a judgement served against me and prove that I only recieve VA and SSD that will be the end of that for awhile. I am just affraid of not knowing what the judge will do even though the lawyer advise me other wise

[floridian]

like i said, get a second opinion... you can learn a lot on this forum... after i paid my lawyer all his money for a 7, it looks like i would be forced into a 13....now i find out that if i get a 13, the lawyer gets more money too..how conveinient..

you have a lot of debt, but how do you look when the bk strips away all your debt? if you look good, you are screwed..

i will become an outlaw, before i would take a 13, but thats just my opinion... the current system, is set up to hose those who lived a meager lifestyle but still got in over their heads..

im sure you will hear there are the stages of pre-bk... denial, anger etc... but those are the same ones of pending death.... a 13 is just the post-mortum of your lifestyle..

[rmab46]

Bk7

like i said, get a second opinion... you can learn a lot on this forum... after i paid my lawyer all his money for a 7, it looks like i would be forced into a 13....now i find out that if i get a 13, the lawyer gets more money too..how conveinient..

you have a lot of debt, but how do you look when the bk strips away all your debt? if you look good, you are screwed..

i will become an outlaw, before i would take a 13, but thats just my opinion... the current system, is set up to hose those who lived a meager lifestyle but still got in over their heads..

im sure you will hear there are the stages of pre-bk... denial, anger etc... but those are the same ones of pending death.... a 13 is just the post-mortum of your lifestyle..

If I take all my debt including my mortgage (i am upside down) my cars (I am upside down as well), add child support, food, gas, electric, auto insurance, auto gas and other things I have about $400.00 left at the end of the month. That is not including my credit card debt. Those are just number after I take away the credit card debt...I was thinking to sit and wait and see what happens with a judgement. I already started filing for BK7 and informed the credit card companies that I am permanently disabled and only get VA and SSD

[txladykat]

Well, my first question is whether your attorney just did the standard means test based on your income, or if he went further and actually included all living expenses, to determine eligibility based on the second criteria if you don't initially meet the means test.

Second, judgment proof...its not always that simple. There are many factors that determine if you are "judgment proof", most importantly is what grounds the judgment was obtained on. If the creditor alleges any type of fraud with regard to obtaining and using the credit, then the judgment cannot be discharged in bankruptcy. Something as simple as fudging your income on the credit application (which apparently is very common) can render the credit obtained as fraudulent, thereby disallowing a discharge of the judgment.

Third, how collectible is the judgment? Judgments are for a lifetime, if the creditor renews it every ten years. Once a judgment is obtained, the creditor can then "abstract" the judgment which effectively places a lien on any property you own. They must abstract it in the county where the property is owned. When you sell the property, then the lien must be satisfied. So, for example, if you own a house and you have a judgment against you, when you sell the home, the judgment must be satisfied.

[floridian]

if you are upside down on your house, you could walk away if they put a judgement on it... however, i doubt you would ever get financing for another home, ever!

[rmab46]

means test

Well, my first question is whether your attorney just did the standard means test based on your income, or if he went further and actually included all living expenses, to determine eligibility based on the second criteria if you don't initially meet the means test.

Second, judgment proof...its not always that simple. There are many factors that determine if you are "judgment proof", most importantly is what grounds the judgment was obtained on. If the creditor alleges any type of fraud with regard to obtaining and using the credit, then the judgment cannot be discharged in bankruptcy. Something as simple as fudging your income on the credit application (which apparently is very common) can render the credit obtained as fraudulent, thereby disallowing a discharge of the judgment.

Third, how collectible is the judgment? Judgments are for a lifetime, if the creditor renews it every ten years. Once a judgment is obtained, the creditor can then "abstract" the judgment which effectively places a lien on any property you own. They must abstract it in the county where the property is owned. When you sell the property, then the lien must be satisfied. So, for example, if you own a house and you have a judgment against you, when you sell the home, the judgment must be satisfied.

yes, he did the means test but in the regulation here in AZ he only has to use I think the VA disability as income. If not the SSD. Then he goes from there. He told me again on friday I do meet all the criteria for a BK7.. THe only thing I would have left at the end of the month once the credit card debt is discharged and you count for the child support I pay, the mortgage (they can not take my house here) the cars (they can not take my cars here ) I have to re-affirm them is and all the other things like food, electric ect is $400.00

[rmab46]

house

if you are upside down on your house, you could walk away if they put a judgement on it... however, i doubt you would ever get financing for another home, ever!

No, I do not plan on walking away from the house, it is only 2 years old, we have 2 new cars we are keeping and we are up-side down as well.

[floridian]

im 1200 bucks below the median on my income... factor in the SS thats not supposed to be used on the means test and i get a DMI of 500 bucks.. screwed!

but the good news is that because im below the median on my retirement, i only have to be an indentured servant for 3 years and not 5..

[Floridagail]

They will get a Judgement for sure, if they want one, you owe them. But really all they can do is try to freeze your bankaccount , even if it has only ss in it. My attorney told me to change bank accounts right away. They get a judgement to look for assets and bank account is one. I did not want them knowing my account numbers for retirement pensions and the judge in my case ordered I provide all account numbers to them if I am judgement proof. So the they would have my bank account numbers etc. Also they can request that information every 6 mos to see if you have obtained any assets.

[floridian]

thanks to advice on this forum, i now dont have direct deposit... i get paper checks sent to me.... i put just enough in the bank to cover any checks.... if they were to freeze the account, they couldnt hurt me too bad..

in my case, its time for a lifestyle change....ive always been a "by the book" kind of guy... i can see me spending my golden years as a recluse....

if i was to ever meet someone that i would want to get involved with, they might have a hard time understanding my point of view.. as long as i have my freedom, pets and health, im ok..