How soon before lawsuits and judgments?

[Rockwell]

Hello all,

Terrific forum you have here, with tons of great info and helpful people!

Like many on this forum, as I sit here now, I have terrific credit. Have never missed any payments and have literally gone without food to make a CC payment on time. Most of my debt (personal) was incurred for my business of 22 years. Very bad economic conditions, rising operating costs and reduced sales have lead me to the hard decision to file personal BK7. My fiance and I are also expecting our first baby this January and I can no longer be solely focused on the survival of my business. After numerous consultations with BK attorneys, I have just sent my first deposit to begin the process.

My attorney advised me to stop paying my CCs. Mentally, this is very challenging for me as I have so trained myself to protect my credit at all costs. I know I must let this train of thought go. This week I will miss my first CC payment, the rest will be much easier.

My question is, How long, generally speaking, after a person stops paying CCs do things like lawsuits and judgments take place? My fiance is in her 3rd trimester, I am trying to avoid things like the Sheriff at the door handing me summonses. Trying to keep this as minimally upsetting to the household as possible.

Also, is it OK to change banks (personal checking) before filing? My checking account is held with a bank that I also have a large CC balance with.

Lastly, over the years I have paid my CCs online using both my personal checking account as well as my business checking account for business charges. I have no loans or CCs with the bank my business is with. Can the CC companies "reach" into my business account because they have that info on file from prior online payments? None of the CCs are in my business name.

Many thanks from a very nervous dad to be!

[tobee43]

Hello all,

Terrific forum you have here, with tons of great info and helpful people!

Welcome Rockwell!

Like many on this forum, as I sit here now, I have terrific credit. Have never missed any payments and have literally gone without food to make a CC payment on time. Most of my debt (personal) was incurred for my business of 22 years. Very bad economic conditions, rising operating costs and reduced sales have lead me to the hard decision to file personal BK7. My fiance and I are also expecting our first baby this January and I can no longer be solely focused on the survival of my business. After numerous consultations with BK attorneys, I have just sent my first deposit to begin the process.

Congrats on the upcoming birth of your lovely new baby...right now that's number one in most anyone's book

My attorney advised me to stop paying my CCs. Mentally, this is very challenging for me as I have so trained myself to protect my credit at all costs. I know I must let this train of thought go. This week I will miss my first CC payment, the rest will be much easier.

Easy for them to say...it scares US to death to stop paying....but it will be fine.

My question is, How long, generally speaking, after a person stops paying CCs do things like lawsuits and judgments take place? My fiance is in her 3rd trimester, I am trying to avoid things like the Sheriff at the door handing me summonses. Trying to keep this as minimally upsetting to the household as possible.

I think it depends on who the creditor may be. we came from new jersey (we since have moved out of state) and it was approx. 1 and a half years before we rec'd our first summons for charge card....for the foreclosure it was approx. 8-10 months before the first summons came...however, that does NOT mean we had to leave the house. we actually could have stayed for another year rent free...at this point it's 2.7 years and still chase has not foreclosed on the house.

Also, is it OK to change banks (personal checking) before filing? My checking account is held with a bank that I also have a large CC balance with.

one of the VERY first things we did was change banks.......get your money out asap....attempt to open another account with a small community bank and if you can a credit union, (the credit unions are USUALLY more bk friendly with members as you rebuild you credit in the future).

Lastly, over the years I have paid my CCs online using both my personal checking account as well as my business checking account for business charges. I have no loans or CCs with the bank my business is with. Can the CC companies "reach" into my business account because they have that info on file from prior online payments? None of the CCs are in my business name.

we made occasional payments on line.....we didn't have auto pay...and you know what the CC company attempted to grab out money without permission!!!! even tho we removed ALL info from the computer. so we had to physically go TO THE BANK IN PERSON...speak with a manager let them know in writing ALL payments from the account are to cease immediately.....close the account...(open your other one first if you can and in the new one only keep what it cost you to live...nothing more).

Many thanks from a very nervous dad to be!

hopefully you will get some other input and ideas so you have some guidelines to help you though. the information i have provided you, is what we did and experienced while going through these hard time...best of luck and make certain you keep us informed!! once again congrats on your new baby!

[AngelinaCat]

Hi Dad-to-be:

Welcome to the forum. I don't know about New Jersey, but for our situation here in Florida, we had between three to six months before the first lawsuit came. Our two lawsuits were for a co-signed auto loan that the other guy defaulted on, and for a loan from American General. The two CCs never made any action.

Yes, you can move your checking account, and it would be prudent to do so, to another institution that you don't have any other accounts with.

[Floridagail]

Welcome
I can only say in my case , It took 18 mos for me to get sued, I had 6 or 7 cards . CapOne sued me. which forced me to file. The rest never came after me. They all threatened but never did.

I would definately get a new bank account opened for yourself before filing. make sure it is with a bank you owe no money to.
I did that and it was glad I did, as my CU stopped my debit card immediately upon my filing.

[Mensa1]

Concerning your situation of drop in business and no longer being able to keep current on all payments; STUFF Happens. Once you move forward and get this all behind you, you'll be amazed at how much better life can be.

Specific to your questions. Usually with cc defaults the telephone calls will begin within 30 days. However they usually do nothing for months upon months concerning any legal action. In some cases they never take legal action, regardless, but if you are now talking to an Atty you should be way ahead of the lawsuit filing curve before they take such action. There will be offers of settlement and attempts to work the debt out before any lawsuits are filed. Usually the lender will go 150 days past due before they chg off the debt, moving it off of their books. Of course you still owe the balances, but it is usually at this point and after that a lawsuit is considered, and by then you should have filed, which in and of itself will eliminate creditors from filing any suits once the Bk is filed.

No problem with changing banks for checking, etc., in fact probably a good idea to do so before filing. These creditors cannot reach into your accts unless they have filed a suit and have obtained a judgment against you, which doesn't seem likely to happen since you haven't yet defaulted and are contemplating the Bk. In laymans or old cowboy terms, you will have headed them off at the pass. Lastly and likely for elementary purposes, depending upon how your business is formed, (Sole prop, Corp, LLC, Parternship) would determine whether a creditor with a judgment against you could garnish the business acct. If sole-prop they could garnish the acct, but if corp or other entity then the creditor would need to perform a judgment debtor exam and levy against assets in that manner; (legally acquiring the right to attach your business assets or distributions, since you are a shareholder). But again, doesn't seem like this should be much of a concern in your case.

[Mensa1]

Shazaam............. 4 answers all simultaneous. Never led it be said that no one shows concern over the plight of their fellow man here on the forum.

[Floridagail]

Wow, We are here for each other...

[tobee43]

Shazaam............. 4 answers all simultaneous. Never led it be said that no one shows concern over the plight of their fellow man here on the forum.

got that right!! i believe and hope that's what it's all about...

[Rockwell]

Thank you all so much for the replies! I am looking to file within 60 days so its sounds as if I should be on solid ground. My business is a Corp so I'm more than likely safe on that front as well. I will open a new personal checking account today.My largest concern was for my fiance and baby, don't want to trouble momma or baby!

How do you handle the collection calls once they start? I have read its not wise to tell them you are seeing an attorney until you have actually filed. Do you just tell them "lack of funds is why you haven't been paid"? Say anything? Say nothing? Don't answer?

[tobee43]

Thank you all so much for the replies! I am looking to file within 60 days so its sounds as if I should be on solid ground. My business is a Corp so I'm more than likely safe on that front as well. I will open a new personal checking account today.My largest concern was for my fiance and baby, don't want to trouble momma or baby!

How do you handle the collection calls once they start? I have read its not wise to tell them you are seeing an attorney until you have actually filed. Do you just tell them "lack of funds is why you haven't been paid"? Say anything? Say nothing? Don't answer?

they will usually not start until the pass 30 day mark...and we are hitting holiday time...so that does slow them or SOME Of them down a bit...we either turned down the ringer, blocked their numbers on both our home and cell phone......OR in my case ONE Of us whom shall remain shameless and nameless enjoyed toying with them...even got one or two of them to cry.

point is, do NOT Let them get to you...you are filing and it will be ok soon enough... unplug the phone and enjoy the holidays!!

[Floridagail]

We just changed our number to non published, they got it somehow.. So we just unplug our landline every morning and let it ring in lala land. We use it basically for faxing only. We use our cellphones for everything else. But be care about giving cellphone out to business they report it to credit bureau and the creditors get it. We just ignore the calls basically. No need to get upset over them.

[oregonpilot]

Rockwell...welcome to a great fam. I have found great peace and support here.
Before finding this place I had already gone thru 10 yrs of savings trying to keep up on the payments after my business took the downturn.
Went thru Everything short of getting into my IRA's, thanks to the great peeps here i still have them, which is a good thing cuz at 59 thats all i have.

I remember missing that first payment. Walking around the house looking at the clock almost every few minutes thinking ok i can still make that payment. I actually had to leave the house to keep from pressing the make payment button.
That was back in May. Seems like a lifetime ago.

I went into all my CC's (still had access) and changed the phone number to a Google phone number and deleted all the other numbers on file. Worked great. only had one still calling my cell #.
I never talked to anyone!!!

Good luck to you and yours. Congrats on upcoming new BABE.

[keepsmiling]

Hey Rockwell, I am in NJ too.
Just FYI, the phone calls started almost IMMEDIATELY upon non-payment. Like in less than a week! However, what you say or don't say almost is irrelevant since 90% of the time there is no one on the other end anyway..... there is a lot of discussion about google voice, which is a brilliant idea- do a search and you will see pretty complete instructions for how to enjoy some silence- you still have time to change your phone numbers on the websites...

I just hit the 90 day mark and the calls have actually started to slow down and the letters begun to speed up, informing me that my rates will be rising (! since they've closed the accounts anyway why does this matter lol!) ; one settlement offer from Target that showed up a month ago, and a few suggesting that further collection process is under consideration.

[Mensa1]

My business is a Corp so I'm more than likely safe on that front as well.

A little bit off topic of this thread, but you will need to declare the value of your Corp in your Bk filing. Net worth or book value of the company, essentially what the value of the company stock is worth. A Trustee can raid a Corp or LLC for assets, depending on the circumstances, so make sure you do plenty of advanced research on this before filing. There is sooooooo much to know, isn't there.

[Rockwell]

You people and this forum are the greatest thing since the keyboard!

I can not thank you enough for all the responses!

"I remember missing that first payment. Walking around the house looking at the clock almost every few minutes thinking ok i can still make that payment. I actually had to leave the house to keep from pressing the make payment button." Have you been watching me? You described me perfectly!

Oregon and KeepSmiling: Thanks to you two, I have already set up my voice Google and updated all my CCs online! AWESOME!

Mensa1: You are correct about Corp value. I am obtaining a professional Business Valuation from a Certified Appraiser at the suggestion of my BK lawyer. I also own 2 homes and I and the Corp also own 6 vehicles. Homes are pretty much both underwater. Home 1 is totally underwater, Home 2 has some positive equity in it but is owned by me and another party. Lawyer feels he can protect what little equity is in Home 2 with Federal Homestead Exemption and the fact that equity value would be halved due to other owner. Vehicles are commercial vehicles that are old and of little value and he feels the Trustee will abandon these as not being worth the time, effort and cost. Of course I am getting certified values on all. Believe me, I'm a complicated case but I feel I am in good hands with my attorney. I also know there are no guarantees in this world.