Why file bk if I'm judgment proof?

[treehugger1]

Yeah, don't assume that someone who has a judgment
plays by the "rule of law." It can be the case that the burden of proof when it comes to a judgment creditor/CA seizing bank accounts is on the debtor. But, you can always open up a debit card account (Western Union, etc) and use the account number and routing number to pay your insurance.

[gilwilliams1]

Thanks.

Yes, I have received my Medicare card. But it is no good until April 2009. I have a very bad hernia from a blown surgery to correct. I have at least 6 prescriptions to restart. I have to start from ground zero with my disability medical treatments, needing a new primary doctor and eventually more surgery. My old doctor does not take medicare, and it seems like few of the others take it either. What does "D&C" mean exactly?

[lrprn]

What does "D&C" mean exactly?

Actually BigBoy typed "C&D" which means Cease and Desist. It's a registered, return receipt letter you send collection agencies setting up conditions they may contact you - for example, forbidding them to contact you directly by phone, only by mail. They work some of the time. Nothing guarantees that creditors and collectors won't call any more except filing bk and giving them a case number.

[cityish]

Your other debts will keep gaining interest and potentially fees. What if your debt eventually grows so big that you don't qualify for a 7 or 13?

Not sure I understand why I wouldn't qualify for chap 7 or 13 if my debts grew.

I know this thread is a few weeks old but I was just reading through it and didn't see an answer to AJM's question.

If your debts grow bigger and bigger over time with interest and penalties, does that somehow affect your ability to qualify for a BK?

I've never heard of this before but it sounds kinda scary because right now that is exactly what is happening to my debts.

If Treehugger (or anyone else) could shed some light on this I'd be interested. Thanks.

[CompTweaker]

Man I need to proof read my posts better...or the stop the meds...lol...

officer in compromise = offer in compromise

wow I look back at what I write at 2:00 am on oxycodone and I am almost amazed I can write as well as I do. But then again I come on here now at 6:00 pm and don't ever remember writing that advice...LOLOLOLOL...wow I do well for not remembering what I say. weeeeeeeeee

Wow, I just saw this post.

[cityish]

Actually I thought it was kind of funny!

[HHM]

I know this thread is a few weeks old but I was just reading through it and didn't see an answer to AJM's question.

If your debts grow bigger and bigger over time with interest and penalties, does that somehow affect your ability to qualify for a BK?

I've never heard of this before but it sounds kinda scary because right now that is exactly what is happening to my debts.

If Treehugger (or anyone else) could shed some light on this I'd be interested. Thanks.

It could effect your ability to file a BK 13. If you don't qualify for a chapter 7 (income too high), and if you allow your unsecured debt to spiral out of control to the tune of $330,000 or more (that is the unsecured debt limit as of March 1, 2009), then you would be ineligible for chapter 13.

The amount of debt you have does not effect your ability to file chapter 7.

[cityish]

Thanks HHM. I had never heard of that!

[CompTweaker]

Great advice HHM.

Actually I thought it was kind of funny!

OH, so.did.I.

[catleg]

It could effect your ability to file a BK 13. If you don't qualify for a chapter 7 (income too high), and if you allow your unsecured debt to spiral out of control to the tune of $330,000 or more (that is the unsecured debt limit as of March 1, 2009), then you would be ineligible for chapter 13.

The amount of debt you have does not effect your ability to file chapter 7.

Right, the unsecured limit right now is 336,900 and there is also a cap on overall debt of around a million.

However, if you go over you are not without relief, it then becomes a personal chapter 11 case. The incentive for a 13 is simpler administration. In an 11 you have a creditors "committee" and they have to vote to approve your plan. I guess the advantage is that it disconnects the Means test from your repayment plan; I guess the court probably tries to keep to the same general themes but you have more flexibility to negotiate I would imagine.

[HHM]

Right, the unsecured limit right now is 336,900 and there is also a cap on overall debt of around a million.

However, if you go over you are not without relief, it then becomes a personal chapter 11 case. The incentive for a 13 is simpler administration. In an 11 you have a creditors "committee" and they have to vote to approve your plan. I guess the advantage is that it disconnects the Means test from your repayment plan; I guess the court probably tries to keep to the same general themes but you have more flexibility to negotiate I would imagine.

In theory that is true...you can actually file a case in a chapter 13 and be over the debt limits. Someone actually has to object. A chapter 11 is "not a good" option for the average consumer, first and foremost, the attorney's fees start at around $20,000+

Anyway, this thread is sort of moving off topic, as it is about being judgment proof. If someone were to approach the unsecured debt limits, it would be practically impossible for them to be "collection" proof since they would almost certainly have assets that were acquired (unless all they did was travel).

There really is no such thing as judgment proof (or more accurately collection proof) except for the truly poor. There are more things to consider than simply the money, its the lifestyle and the time and hassle. Some people have the personality such that they can become professional debtors (granted, these are the same highly stressed individuals that die of heart attacks at age 50 ) In general, the only profile of judgment proof is the following
-Retired, only earns SS, rents, and uses public transportation.

[Floridagail]

Just wanted to share what happen to me. I am Judgement Proof also, I went to attorney, they told me you dont need to file. since you are Judgement Proof. Even at the moment i was being sued by Capital One. I had stopped paying my cc for 18mos,
finally Capital ONe sued me. The attorney said they can get nothing. But after the Judgement, they wanted a financial statement of my accounts, retirement etc. I went to attorney they said yes I had to provide that since it was court ordered with judgement. Then she said yes they could request that every year to see if you are still
judgement proof. I didnt want to give them my copies of my retirement statements.
So I decided to just go ahead and file. which I did Jan 7. So they can still bug you.

[floridian]

thats the same boat im in... what all did they want, bank statements? did you go to court, or take a default judgement?

[Vici]

File Bk, wait, or do nothing?

Hi,
Last night I attended a free Bk seminar at the NM Bar Assn and had a free 1/2 hour consultation with an attorney. He suggested do nothing rather than filing Chapter 7.

My home in Georgia was forclosed in 2006 (loan value was about 135k), and I returned my car to the lien holder (with about 2k left on the loan). I don't know how much the home or the car went for at auction.

I also have about 70k in credit card debt. I believe my last activity on any of the accounts was Fall of 2005. I relocated to New Mexico in Spring of 2006.

I am 47 year old full time university student working on my first BA. I live with family and do not own a car. I earn about $500/month after taxes, and have been receiving about $1500 federal grant money each semester. I will need to start getting undergraduate student loans for the final two years (which I can get even with BAD credit). I intend to apply for graduate school - hopefully will qualify for full ride scholarship/research assistant/fellowship for Fall 2011. If I don't get a full ride, then graduate school loans generally require good credit or no Bk in last 5 years. So if I need a Graduate Loan, I'll be SOL for at least 5 years after I do file.

The attorney said that I was "Judgement-Proof", and gave me the "Judgement-Proof" & "Cease & Desist" form letters to send to my creditors. He also said that my credit card creditors were unlikely to sue & I needed to find out if there was a judgement or if I still owed money on the house and car. If no judgements, or if I didn't owe on the house or car, then I should do nothing, because the debts would fall off my record 4-6 years after the last activity. Fall 2011 will be about 6 years for the debt.

He said if I really wanted, he would be happy to file Bk for me, but that I should wait until my final year of Graduate School if I really wanted to file, when my circumstances are about to improve.

Is the attorney crazy?

Is the risk of being sued that low? Will I not be in that much worse shape than I am now? I've read that judgements are worse than Bk on your credit report.

Am I more likely to get sued if I send the "Judgement-Proof" & "Cease & Desist" certified letters?

I admit getting the $1500-2000 for the Bk fees is a hardship, but I can swing it before the end of the year (barring medical emergencies).

Should I file Bk, wait, or do nothing?

Thanks - Vici

[floridian]

my lawyer originally said that i didnt need to do anything and that actually the negative would fall away in 4-5 years...

i went ahead and paid him for a 7...circumstances changed and now hes talking a 13.... i think hes tired of fooling with me and wants to go ahead and file a 7... then when i get a 13 and walk away, he can wash his hands of my case...

however, its been pointed out to me that when i file bk, the damage is done for 10 years even if its dismissed....

so now im spooked, ive paid the lawyer, but afraid he just wants to be done with my case and if i swing from the yard arm, so be it..