Bankruptcy or Ride it out ?

[ronl]

My son has about 20 K in usecured debt that has went to court and had judgments put on him. He has no assets, only rents. Shoud he file chapter 7 to wipe this clean ? or will it eventually roll off ? If he eventually purchases land or house, will this judgment autmatically be attached to that ? and what does that mean ? He is in SC so from what I am told the only thing they can do is to place a judgment against him. (no wage garnishments)

[DebtEnder]

If he had judgments taken out they last forever is my understanding. He will probably never be able to get any sort of credit with those outstanding.

Debts that are very old but never went to court could in time be ignored, but this does not sound like his situation.

[dingdong]

It depends on your state law. In California, judgements are enforceable for 10 years, at which time they can be renewed, so in essence, if a creditor continues to renew the judgement, they can last a long, long time. You need to check your state's laws on judgements and renewals.

Most mortgage underwriting guidelines require you to have paid judgements before obtaining a home loan as the judgements can sometimes attach to the home and muddy up title.

You might want to check the SC laws and see if they can go after other property , such as a car or bank accounts.

You might want to tell your son to withdraw any significant amount of cash he has in checking or savings until he is clear on the state laws for attaching bank accounts to a judgement.

He may possibly be suprised one day to find his bank account wiped out due to the judgement.

[StartingOver08]

I don't know if your son has an actual judgment already or if it is something you are thinking will happen soon.

Does your son have a good income? Is he just starting in his career? Part of his decision will be if he has the ability to earn enough to get his past debts worked out or settled without filing BK. What is the percentage of his debt in relation to his income? Does he have the ability to increase his income to negotiate debt payments? The answers to these questions really will help determine if bankruptcy is his best course of action or settlement.

If your son has a judgment and buys property, most of the time the judgment will attach to the property and stay there until he sells it. So if he has a judgement the time to take care of it is before he buys real property.

I found a little about Judgments in SC, but this may not be the most recent information, so he needs to check with an attorney.

http://www.lawdog.com/states/sc/sta3.htm

Statutes of Limitation:
Civil actions generally can be commenced only within certain time limitations. The time generally runs from the date a cause of action accrues or from the date injury or damages are discovered or should have been discovered. In an action brought to recover a balance due upon a mutual, open and current account when there have been reciprocal demands between the parties, the cause of action is deemed to have accrued from the time of the last item proved in the account on either side. (15-3-610.)

When a cause of action accrues is a critical issue and may be different on a case by case basis. A creditor should always consult actual legal counsel to determine its right to action under the applicable statutes. Some of the time limitations relevant to credit and collection matters are as follows:

Express or implied contract 3 years
15-3-530(1)

Injury to goods or chattels 3 years 15-3-530(4)
Motor carrier charges and overcharges 2 years
15-3-580 & 15-3-590

Contract for sale of goods 6 years 36-2-725
Action for relief not specifically provided for. 10 years
15-3-600

[fltoo]

How old is he and does he have a family?

Does he have a good job?

[ronl]

To file or not

He drives a bulldozer, so it pays fir when its not raining, plus the market being down, he's lucky to get 2 or 3 days a week.
The biggest question is will it roll off or stay there to be attached to a home, if he ever buys one.

[DebtEnder]

If he's already been taken to court then odds are he will get stuck when if ever he gets a house or a non contract type job. If he is only just able to pay rent and food as is then it's best to take care of it now. If he makes a fair amount over that then trying to setup a settlement may make more sense. His credit is trash but it's a question of do you want to reset the clock in 3-5 months with a bankruptcy, or possibly never hoping the judgments go away(which they probably won't)

[OhioFiler]

Is he planning to buy a house soon? He doesn't seem to have a steady income so I don't see a home in his near future. It's possible a lien could be placed on his home AFTER he buys it.

I wouldn't file over a $20,000 debt. He could probably get settlement offers from the debt collectors for a lot less.

[ronl]

As for now, he can barly make it, Good ol Dad has been filling in the holes when he cant make a payment on somthing necessary, like electric or car insurance. He actually will go a couple days without eating if he has to. So buying somthing soon is pretty much out of the question. He would like to do the bankruptcy but the 1900.00 is a bit much for him. So he was looking for alternatives. Being that the judgments will be hanging over his head, I believe the thing for him to do is go ahead and do it, as its most likely to late to arange any kind of settlement (and he would most likely default on that anyway, the work just isnt there at the moment)
Thank you all for your advice.