Questions about garnishing accounts...

[Wantmypeace]

Just spoke with the attorney, and he says we have too much debt for ch 13 (250K in sl debt plus 70K in cc's), and we are over the means test for ch 7. Our plan is to try to pay down enough of the SL debt to get under the max for a ch 13 in the next year. In the meantime, our cc's will sit.

So, here's my concern: I've already switched bank accounts just in case any of them have my account info. I banked at the same place for the last 17 years, so some of our cc's probably have it. I know that they can get judgments and garnish our wages up to 25%, but only one creditor at a time in California. So, what I'm wondering is if they can come after anything else. We have two cars that are both upside down, and our house is also upside down. Can one cc garnish my wages, one garnish my husbands wages, and another garnish our checking account? We don't have anything else, but I'm trying to build up a savings account for emergencies (a hundred dollars a month). Hypothetically, could one of them garnish the savings account and take the few hundred that I'm saving for emergencies? Should I just not put it in a savings account at all and go cash only?

Any help is appreciated!

[optimistic1]

Nope, they will need to get in line, however, because California is a community property state, a good attorney that is suing you, and wins, can garnish both of your wages for the 25%, if the debt was incurred during the marriage.

I personally, would spend the money that your normally send to the credit cards, and instead, purchase a floor or wall safe (fireproof), and save your own money.

[Wantmypeace]

So, if they garnish my check and my husband's check for 25%, and the remaining balance in deposited into my bank account, can they also garnish our bank account. Essentially, that money would be immediately sent our for bills, and the balance at the end of the month (actually, more like by the 5th of the month) goes back to close to zero. I just want to make sure we have enough to pay our mortgage, buy food, gas, etc...the regular living expenses. So, can they garnish our account AND our paychecks?

[optimistic1]

No, they cannot, 25% is 25%

[lrprn]

Just spoke with the attorney, and he says we have too much debt for ch 13 (250K in sl debt plus 70K in cc's)...

Interesting since in 2007, the maximum unsecured debt to file Ch 13 was increased to $336,900. 250K + 70K = $320,000 and that's below the current maximum. Have you spoken to other experienced bk attorneys about this?

Hypothetically, could one of them garnish the savings account and take the few hundred that I'm saving for emergencies? Should I just not put it in a savings account at all and go cash only?

The unique thing about government student loans is that the lender does NOT have to go to court to get a garnishment of up to 15%. No matter what, you can keep an amount equal to 30 times the minimum wage. The minimum wage is now $6.55/hour. This means that 30 x 6.55 = $196.50 is protected per week. The minimum wage will rise again in July 2009. Private student loan lenders do have to go to court to get the garnishment and are not restricted to just 15%.

There's some great information about how to deal with government and private student loan garnishments at http://www.studentloanborrowerassist...-garnishments/ and http://www.studentloanborrowerassist...rg/bankruptcy/

Now I have a tough question to ask you, so please forgive my directness. Will getting rid of your non-student loan unsecured debt over five years free up enough income to effectively tackle the student loan amount left over after your trustee pays them the same % all your unsecured creditors will get through your plan and adding on the interest which doesn't stop during the years of your plan?

[lrprn]

I personally, would spend the money that your normally send to the credit cards, and instead, purchase a floor or wall safe (fireproof), and save your own money.

[Wantmypeace]

Sorry, more specific numbers: cc=70K and sl=272K, so total is 342 K...just barely over, really!

And, to answer your question, which I really appreciate because it makes me think, I don't know. If we were to begin paying student loans right now (assuming we didn't have the credit card debt), we coudl definitely pay them and get them paid off before retirement. However, I don't know how much the fees and penalties and stuff like that could end up being...so, I'm not sure what to think....

[treehugger1]

I would find another attorney! I'm not so sure that the SL's shoud be playing such a big role here. Am I missing something?!

The question related to what the SL interest will become over the life of your BK 13 can be an important issue. I am one of the baby boomers that have to deal with solid income, SL's, and large unsecured debts. You should sit down with a calculator, 25% wgae garnishment, and BK 13 repayments at 80% - 100% and get a sense of what serves you best in the near-term.

[Wantmypeace]

I keep hearing that the SL's are a sacred cow. They are unsecured debt, so the payments on them cannot be included in means testing. I wonder if they can be paid outside of a ch13 and work to lower the disposable income, though???? That might be something to look at...

[junker]

they can garnish checks, AND also take money from your checking or savings acct....

[optimistic1]

Optimistic, you are openly advising a member to hide assets from the bk court before filing. This is a direct violation of our forum rule, "• All BF users agree not to discuss, engage, or encourage any behavior or activity which violates the law."

I never suggested anything about hiding money from the BK court, this is the collections forum BTW, not the BK 7 or 13 forum.
I did suggest that the OP save his couple hundred dollars at home rather than in his bank account, which the creditors could seek a garnishment from. My post is being taken out of context and you are merely insinuating. If a person had $25,000 in his account and I suggested this, I could see where you are coming from, but the guy said he had a couple hundred dollars, and didnt want the 'creditors' taking it, not the court. Besides, doesn't California System 2 exemptions have a Wild Card exemption of $1100?

[Wantmypeace]

So, I'm confused now. Junker says they can take 25% of my check AND the money in my account, but optimistic say no. I'm saying IF I don't file or WHILE I'm preparing to file (so the wildcard wouldn't play into this yet), can a cc company put a garnishment on my checking account. The account has my paycheck deposited into it on the 1st and the money is gone by the 10th at the latest. Aside from the first 10 days of the month, there is generally only a few hundred dollars (if that) in the account. My concern is if a company (or multiple companies) can freeze my account or take money from it (garnish IT) say on the 1st of the month when my paycheck is first there. This would make it impossible for me to pay my mortgage, bills, etc., and my company requires direct deposit.

[junker]

you have to remember what you are dealing with. if you read enough here you will see that jdb.s and ca,s have absolutely no morals, they will do absolutely anything to get their money, you mentioned a small savings acct, they will most certainly get that, if you had equity in your cars they would go after them, from the amount of debt you have, they will use ALL resources to get their money, remember them coming after OJ simpson, they tried to take everything they could, not just one thing at a time...it is true they can only garnish one at a time...but thats not all they can do..

[Wantmypeace]

What is jdb.s and ca,s? There is 10.00 in the savings account just because it has to be open to have my car loans with the credit union. How exactly can they get to my checking account at a bank not associated with them? Don't they have to have a court order or something to access it? Are there any laws protecting us from a creditor coming in and taking the money from my checking account?

[junker]

jdb is junk debt buyer, ca is collection agency, they are the ones that buy your defaulted accts from original creditors, they are the ones that seek the judgements and sue you. they can easily find your bank accts. if you have a chase credit card, chase might sell that defaulted acct to a jdb and they will be the ones sueing you..read more posts on this forum and you will see how they operate..they might also do an asset search.. or after judgement call you in for debtors exam... to find out what you have..