Co-signer, broken lease, small debts, other q's

[Spaghetti42]

So I'm preparing to file my 2nd Chapter 7. I have a few questions since it's a little more complicated this time around.

1. I have an old car loan (repoed) that my mother was the co-signer on. It has just started getting garnished (balance now $7700) My mother is on disability, which they can't garnish anyway. When this debt is discharged what will happen to her? Is there a way I can sort of protect her from the creditor?

2. I had to break an apartment lease earlier this year and I still owe about $500 to that landlord. Should I include that on my bankruptcy? What happens to my apartment-obtaining prospects after this?

3. I have several small debts (under $100) that, once the bankruptcy is done with, I can totally pay off one by one. Should I still include them?

4. Lawyer says I need 6 months of bank statements. I know they're looking for "windfalls" or large deposits, but will they look at my actual spending habits?

Any advice is appreciated, thank you!

[justbroke]

1. I have an old car loan (repoed) that my mother was the co-signer on. It has just started getting garnished (balance now $7700) My mother is on disability, which they can't garnish anyway. When this debt is discharged what will happen to her? Is there a way I can sort of protect her from the creditor?

The debt would be discharged as to you. As for her, she would be liable. Since she appears to be on some sort of unattachable income, she would be collection proof, unless or until she has other property (real or personal). I might want to make sure the creditor knows, if they already aren't, that your mother's income and deposits are from disability.

2. I had to break an apartment lease earlier this year and I still owe about $500 to that landlord. Should I include that on my bankruptcy? What happens to my apartment-obtaining prospects after this?

Yes, absolutely include this. If you ever were evicted or otherwise didn't live up to the terms of a lease, you may have been reported to the credit bureau that tracks such things. This may make future attempts at obtaining traditional leases through apartment complexes or management companies a little more difficult to almost impossible -- depending on whether it was reported.

3. I have several small debts (under $100) that, once the bankruptcy is done with, I can totally pay off one by one. Should I still include them?

You MUST include ALL debt that you owe. You do not get to pick and choose. If one of those small amounts was for a family doctor/dentist that you like, you could pay them back if you so choose. Nothing prevents you from paying after the discharge. The discharge only removes your legal responsibility to pay the debt and stops all legal process to collect that debt.

4. Lawyer says I need 6 months of bank statements. I know they're looking for "windfalls" or large deposits, but will they look at my actual spending habits?

Typically, they are looking for withdrawals and deposits and to see if it matches what you put for income on the forms. I would not read too much into this.

When did you file your first Chapter 7? Did you receive a discharge in that Chapter 7?

[Spaghetti42]

Hi justbroke, thanks for your reply. I filed my first Ch 7 in Sept or Oct 2005 and it was discharged in Dec 2005. The lawyer I'm retaining says I am eligible to file again. What is the best way to let the creditor know about my mothers income? Is that best done after my stuff is discharged? They did serve her the papers for the judgment and mailed her the papers for the court date for finding out our employers; they found my employer so they must know she is not employed. (I got served and mailed as well)

[bcohen]

How much total debt do you have? How much income do you have? Are you presently being garnished, or is this finance company only trying (unsuccessfully) to garnish your mother's disability income (which by law is protected from creditors)?

If the answer to these questions is that you don't have a lot of debt, don't have any garnishable income, and aren't presently being garnished for anything, then it's probably NOT in your best interest to file for Chapter 7 at this time. Please understand that your filing for Chapter 7 bankruptcy will not prevent the auto lender from continuing to harass your mother, or garnishing her if she ever starts working again. So if that is the reason you were considering bankruptcy, please think twice!

[justbroke]

I would be very concerned that they sent interrogatories to your Mom trying to find her money. If your mom did not respond, they may not know that any money she has in banks is protected. That's why you answer the interrogatory. In any case, I do not know the exact procedure to make sure (your mom's) funds are not mistakenly garnished/levied upon. Not all employers report to a service known as The Work Number (a company that seems to track employment). The creditor may be attempting to find your mother's assets. I can't speak for them or what they have learned through their own asset discovery inquiries.

bcohen brings up a good point as to whether you are collection proof. However, it read to me as though you were already being garnished, so they did find your assets and employment.

[Spaghetti42]

I have over $15000 in debt, and I am at less than half the median income for my household size in my state. I am currently being garnished for the car loan, though it's just started. I'm not asking whether I SHOULD file, I'm asking how I should handle these certain situations within this new bankruptcy.

[Spaghetti42]

I'm assuming they sent both of us the court papers because she is on the loan with me? Both of our names are listed. It seems like they would have found out that she is not employed at the same time they found my employer. I think I will have to ask the lawyer about how to make sure they know she is collection proof, just hope she doesn't charge me an extra fee ;-)

[keepmine]

You and your mother need to comply with the the debtors exam and your mother needs to show proof that her funds are exempt.
If the money is fromm SS, she also needs to inform her bank that the funds are protected.

http://www.consumeraffairs.com/news04/2011/02/new-federal-rule-protects-social-security-va-benefits.html

[Spaghetti42]

Hi keepmine, it doesn't look like a debtor's exam. It just says it's a hearing that is directing the Department of Employment Security to disclose mine and my mother's places of employment. This has already happened and they have got my employer's information and started the garnishment. I wonder if I should advise my mother to file bankruptcy as well? I am going to call her this weekend and explain what is going on and what I've learned (we live 4 hours away from each other). I will also talk to my lawyer on Monday; that's when I plan to bring in the paperwork and payment.

[AngelinaCat]

Without going through our story again--you can search on the terms "co-sign" "car loan" "car note", and our usernames: AngelinaCat and AngelinaCatHub.

The short story is that 'Hub co-signed a loan on a car for an acquaintance. Acquaintance defaults on payments, and we make him surrender the car. Both 'Hub and Acquaintance are sued for the difference. We filed BK; Acquaintance did not. Acquaintance is stuck with a default judgment.

This person only has SS to live on, beside some odd handyman jobs he might get now and again. He cannot own anything in his name ever again, as long as the judgment is active--and depending on how mean the judgment holder wishes to be.

Florida only allows $1,000 exemption for a vehicle. But in 2000, 'Hub and I sued a person who tried to steal my dead MIL's property, and won a judgment against this miscreant. We went to the expense to have this person's car seized and put up for auction, which we bid on and won. I drove it for four years.