Should I file bankruptcy or not bother since I'm collection proof?

[Violet]

Hello, I am going to make an appointment for a free bankruptcy lawyer consultation tomorrow, but I thought I'd throw this out there for additional advice. I defaulted on $35,000 worth of credit card debt about a year ago, and am being sued by Discover Card. I have a pre-trial conference scheduled with them in about three weeks. I am trying to decide between filing Chapter 7 and just letting them get a judgment since I am currently collection proof. I am unemployed, live with my parents, and have no assets besides a 10 year old car. I live in Michigan, where it is unlikely I'll find a job anytime soon. I'd like to file BK and put the debt behind me, but my lack of health insurance makes me hesitate. If I filed BK, and needed emergency health care some time over the next several years without having an income, I'd really be in a bad situation. I'm really afraid to file without any income prospects in the near future. Also, in order to pay for the BK I'd have to take money from my mother she really can't afford to give.

My only worry is from horror stories I've heard online about Writs of Fieri Facias (aka Writ of FiFa). As I live with my parents, I don't want a sheriff going through my parents' things like he's on Wheel of Fortune. Wouldn't the creditor need to have a reason to believe I own something valuable to attempt to seize any belongings of mine? Discover is suing me for $4000. I doubt if everything I own put together is even worth $4000. Once the creditor finds out I'm unemployed and have no savings, are they unlikely to go any further?

Any advice would be appreciated.

[frogger]

My only worry is from horror stories I've heard online about Writs of Fieri Facias (aka Writ of FiFa). As I live with my parents, I don't want a sheriff going through my parents' things like he's on Wheel of Fortune. Wouldn't the creditor need to have a reason to believe I own something valuable to attempt to seize any belongings of mine? Discover is suing me for $4000. I doubt if everything I own put together is even worth $4000. Once the creditor finds out I'm unemployed and have no savings, are they unlikely to go any further?

They might, they might not go further. It really depends on which way the wind is blowing.......

As to a fifa, if you don't own anything, then it can't be seized. Sounds to me like everything belongs to you parents. If you don't own property, the the likelyhood of a fifa goes way down. The 10 year old car however, would possibly be up for grabs.

If I was in the shoes of your CA, I would go after your car.

[Violet]

They might, they might not go further. It really depends on which way the wind is blowing.......

As to a fifa, if you don't own anything, then it can't be seized. Sounds to me like everything belongs to you parents. If you don't own property, the the likelyhood of a fifa goes way down. The 10 year old car however, would possibly be up for grabs.

If I was in the shoes of your CA, I would go after your car.

In Michigan vehicles are exempt up to $2,950. The Kelley Blue Book suggested retail value of my car in good condition is $3,951. On the other hand, my car has been in two accidents so I doubt it's worth that much. Where do I find the actual value of my car for a debtor's exam?

[frogger]

In Michigan vehicles are exempt up to $2,950. The Kelley Blue Book suggested retail value of my car in good condition is $3,951. On the other hand, my car has been in two accidents so I doubt it's worth that much. Where do I find the actual value of my car for a debtor's exam?

Exempt for 2950 in bk or exempt for 2950 against a fifa?

[Violet]

According to this website:

http://www.uschambersmallbusinessnation.com/toolkits/popup/P98_12_assettables_MI

The $2950 is a Michigan post-judgment asset exemption.

[Dst1]

Violet. I doubt the CA will go after the car. They could to make your life hell but I doubt it. There have been lots of legal discussions about the value of used cars because the market has been so messed up. I'd be really shocked if they went for the car because the sale commission alone would be about $500 and then there is the fact it's MI where the economy sucks and they probably won't get $500 in an auction on it.

The KBB value is pointless and not even being used by some courts anymore.

[DYLAN150]

I am almost in the same position. My retirement can't be garnished. My household goods are exempted. What are they going to do? I am in my 60's and I may file for a chapter 13, don't know yet. Once I stop paying my credit cards I will have a attorney fill out one of those exempt forms for me showing my retirement and household good can't be touched and file it with the local court. Any idea's here. (I am not feeling too good about the whole situation) I am one of the guy's that got that 4% balance transfers from Chase bank and then they changed the payments from $200 to $500. I have two of these accounts. That's $600 more a month.

[OHBOY]

Quote by 'DYLAN150': "...I may file for a chapter 13, don't know yet. Once I stop paying my credit cards I will have a attorney fill out one of those exempt forms for me showing my retirement and household good can't be touched and file it with the local court."

Just wondering why you 'may file for 13', instead of 7, if you consider yourself collection proof (?)

As I too am also in just about the same position as 'VIOLET' and very much like the idea of filing some sort of declaration withe the court showing that I am 'judgement proof', I am wondering if you actually have seen such a form/forms ? ....and if so, where would I be able to obtain it ?

[DYLAN150]

OHBOY, I have talked with three different attorneys and they told me that I failed the means test and must file a chapter 13. I beleive this site below contains that form but its for Washington state.

http://www.lawhelp.org/documents/1387410205EN.pdf?stateabbrev=/WA/

Its called Declaration of Defendant__________regarding income and assets exempt from garnishment.

[WaitNSee]

Collection Proof

http://www.lawhelp.org/documents/1387410205EN.pdf?stateabbrev=/WA/

Its called Declaration of Defendant__________regarding income and assets exempt from garnishment.

Thanks for posting this link. I think I can adapt this form to Indiana. I have not been sued (as yet), but know it is just a matter of time. Cap 1 and CU will surely give me the opportunity to fill in these blanks with my exempt income. Thanks again.

[OHBOY]

Dylan150: Thanks!

[francis]

violet,you may be judgment proof.but do you always want to have to worry.that some time.if you find a really great job.that they will find out and then garnish your wages.although you may not hear from those creditors.you owing that kind of money.they wont so easily forget.i know because washington mutual never forgot what i owed them.i had to finally bankrupt them.because they never left me alone.

[catleg]

The real question is, if I'm collection proof right now, when would be the best time to file bankruptcy.

The answer is probably, just before you get a job, or some assets, and risk becoming non-collection proof.

If you think you might get an inheritance, the answer would be six months to a year before then.

[GoingDown]

They might, they might not go further. It really depends on which way the wind is blowing.......

As to a fifa, if you don't own anything, then it can't be seized. Sounds to me like everything belongs to you parents. If you don't own property, the the likelyhood of a fifa goes way down. The 10 year old car however, would possibly be up for grabs.

If I was in the shoes of your CA, I would go after your car.

I wouldn't.

They want money.

They don't want to go through the bother and expense of paying the sheriff to seize your car, hiring someone to tow it away, and store it, and pay for insurance for it, and then pay someone to auction it. By the time it is over, they might end up owing money on the car they seized. A 10 year old car is not worth much at auction.

All of these stories about people coming into your home and seizing personal property are meant to scare the hell out of debtors and it works. But listen, they don't want your used underwear, or your used coffee maker, or your used tooth brush. They just want to scare you into coughing up money for them.

If you have medical expenses coming up, don't file bankruptcy yet. Just sit back and wait them out. Even if they get a judgment against you, you can wipe it out through bankruptcy later. It is not a big deal.

Now send them a letter telling them to cease and desist from any communication with you and tell them that you are collection proof (I say judgment proof in my letters, but they will get the point either way.) and they will probably leave you alone. They have finally left me alone. I don't even get any debt collection calls anymore.