What if we don't file chapter 7?

[Ineedhelp2]

Just curious. What happens if you have a lot of consumer debt (over $70,000) but don't file chapter 7?

In our case we are self employed, so wages can't be garnished, and we are upsidedown on our house and will likely be leaving it or booted out.

Isn't the only thing they can come after our bank accounts?

Is that likely to happen?

We have one creditor--a large medical debt--that I think is going to sue us for about a third of the above amount.

If they do garnish checking account balances, how often can they do that? Is there any other way to do business so that they couldn't touch our funds.

We are likely to go through with the chapter 7, but just wanted to know if there are ways to avoid having property or funds taken if you don't.

[nick09]

You can hopefully wait for the Statute of Limitations to pass.....

If they get a wage garnishment against you, it's going to haunt you for years....they can collect in 20 years if they wanted to.

I'd just file for Bankruptcy and get it over with.

[AngelinaCatHub]

You can hopefully wait for the Statute of Limitations to pass.....

If they get a wage garnishment against you, it's going to haunt you for years....they can collect in 20 years if they wanted to.

I'd just file for Bankruptcy and get it over with.

I have to agree. You will get sued and a Judgment is an ugly thing. They can come at you again, and again, until the Judgment is satisfied.

Even if you are self employed, I believe they can garnish you through your payroll anyway. It is called a levy. 'Hub

[DeadManCrawling]

It is, in fact, worse, potentially for self-employed people.

I am self-employed and have researched this avenue, too.

If you get a judgment, you wil be served with a writ of levy, or garnishment levy. I think those are the right terms. At that point, you must give up EVERYTHING in the bank accounts. And I mean everything. You may roll the dice and have nothing, but they will do this over and over. Eventually they will catch you with the rent/mortgage/utility money in the accounts.

The worse part? If you refuse or do not honor the levy, you are going to jail. There is no second chance with this. Judges love to show their muscle.

Judges also love to show their muscle to creditors in BK filings. I would file BK and avoid this minefield. I considered this avenue as a self-employed person, but it is simply not worth the risk. Jail time and losing your freedom will never weigh up equal to this potential problem.

Easy enough to file BK and be done with the whole mess in one shot.

best,

-dmc

[jribe]

the banks will levy self employed person's accounts. And typically there is also $100+ fee each time they try to levy or garnish it. When i worked in a bank- i saw this a lot. Lots of times on business accounts of self employed individuals. Also, i believe they can take any tax refund you get as well.

It would be easier just to file BK now and be done with it. A judgement lasts for 10 years; and then can be renewed. So basically, you'll have to be very careful with any bank balances (doesn't matter if it's business) for the rest of your life or until the judgement is satisfied.

Just curious. What happens if you have a lot of consumer debt (over $70,000) but don't file chapter 7?

In our case we are self employed, so wages can't be garnished, and we are upsidedown on our house and will likely be leaving it or booted out.

Isn't the only thing they can come after our bank accounts?

Is that likely to happen?

We have one creditor--a large medical debt--that I think is going to sue us for about a third of the above amount.

If they do garnish checking account balances, how often can they do that? Is there any other way to do business so that they couldn't touch our funds.

We are likely to go through with the chapter 7, but just wanted to know if there are ways to avoid having property or funds taken if you don't.

[Ineedhelp2]

Thanks for all the comments. I plan to file, but wish I could have more time to plan my filing time, as I've got accounts receivables to collect.

I was recently served for a $25,000 medical bill, and I'm wondering how long it would take until there is a judgement. They said I have 30 days to contest it, and if I wait until the end of that period and contest it, would that slow things down. Specifically, I would want to know how it is so high, since I thought our insurance deductible was a lot less than that, and would want to know why my name is on the claim, since it was my wife who was hospitalized.

[DeadManCrawling]

You can easily dispute this debt, buying time. Take a look around this forum and the web in general. Look for form responses you can file with your clerk and fill in your details and case number, etc. You can dispute the validity, amount, almost anything really except your name and address.

Doing so can cause this to drag out for many months, and give you time to plan for the BK. Even if you do not, it will probably be several months before you see a default judgment entered. But if you wish to buy the maximum time possible, you should answer.

[kw1025]

$70,000 is alot in consumer dedt, even without interest. How would you ever plan on paying it back? You do not want a judgement! What a hassle. Other than the judgement, you can buy lots of time, and you will get harrased by mail and on phone. Do the math. If you do not see how you can pay back the unsecured debt, while still paying your normal bills and savings, a fresh start will be best

[merlotwaytogo]

I was under the assumption that if you were the primary on the insurance, or it's from your employer, you are also responsible for the hospital bill.