Law suit from one of my creditors

[luvablexgrl]

Hi! I am currently being sued by one of my creditors. I am going to file for BK Chapter 7, but need to wait till May because that's when it will be 8 yrs from the last time I filed. Anyway, my court date is on the 4th of Feb. Is it really necessary for me to appear in court since I already know that they will win the case? I mean either way if I showed up or not I know for sure that they will win. I am currently unemployed and a single mother of 4. There is no way for me to even pay what they are asking for. What should I do? Also if I didn't show up and they win the case what will happen next or if I did show up and they win the case what's next? What usually happens? Will they send me a bill or will they automatically deduct whatever I have in my bank account because I get child support payment direct deposited to my bank account. Will they automatically take all of that? Please let me know! Thank you!

[BigJohn]

Are you renting or own?

Car payments?

How old is car?

Have any other assets?

Is the bank account you deposit your child support comingled with other money?

[luvablexgrl]

Are you renting or own? I'm currently living with my parents

Car payments? I do pay for my car

How old is car? 5 years old

Have any other assets? No

Is the bank account you deposit your child support comingled with other money? No

[catleg]

As you can probably tell from John's questions, and your own knowledge, you're probably ok unless they get a court order against the bank account. You would have to defend yourself against that. What state are you in?

[luvablexgrl]

Ok, but is it necessary for me to appear in court or I don't need to?

[frogger]

Ok, but is it necessary for me to appear in court or I don't need to?

If you don't appear, they are going to win a default judgment against you. If you go, they will still win (according to you), but you can probably set up payment arrangements with them with a consent judgment.

Then, you pay what the consent judgment states each month until you file for bk. If you do it this way, you don't have to worry about your accounts being seized.

Just a little food for thought.......

[WhatMoney]

If you don't appear, they are going to win a default judgment against you. If you go, they will still win (according to you), but you can probably set up payment arrangements with them with a consent judgment.

Then, you pay what the consent judgment states each month until you file for bk. If you do it this way, you don't have to worry about your accounts being seized.

Be careful about signing any consent agreement. They often require you to agree to NOT discharge the debt in bankruptcy, but to continue with the payments after BK. If you stop paying according to your consent agreement before BK, they will quickly convert it to a default judgment. Then you are still at risk unless you can get the default judgment vacated after the BK. All of this requires extra court fees, attempting to vacate the consent or default judgment after BK. If you abide by the consent agreement to not include the debt in your BK, then you have accomplished nothing.

In other words don't agree to or sign anything if you appear in court. Your child support income is exempt. You can claim an exemption if they attempt to take funds from your bank account, and get it returned. Why pay the collectors anything when if you do nothing they legally cannot take any of your income?

The only question is your car - it's value and your equity in it. Since you are not claiming any homestead exemption, your car may also be exempt under your State laws (what is your State?). All depends on the numbers.

BTW, I had an elderly person in FL do just what Frogger advised - she appeared in court, was intimidated into signing a consent agreement and the judge immediately ordered a consent judgment - case closed. But her only income was Social Security retirement with no assets or job, she is 75, in poor health, and supports a severely disabled adult son at home - and does not have enough monthly income to afford food. Her home is upside down by $100K with zero equity. So by appearing at the pre-trial hearing she screwed herself. All against my advice, and against the advice of a legal aid attorney she talked to before the hearing. She listened to her "friends" in FL instead which said always go to the hearing.

As a result, the creditor slapped her with an interrogatory and attempted to levy her bank account for the payments, all within days of the hearing and consent judgment. She had to then find an attorney (more $$$) to file an exemption claim to stop the bank garnishment of exempt funds, and she still has a default judgment.

[frogger]

Be careful about signing any consent agreement. They often require you to agree to NOT discharge the debt in bankruptcy, but to continue with the payments after BK.

Not in our courts. Consent agreements in our local courts are done by the courts and have no provisions that are not dischargeable.

Of course, you should always check to make sure in your case that there is no hidden fine print.

[treehugger1]

Whatmoney, Interesting that a judge somewhere could "make" someone sign a consent judgment. We are both in Oregon, and I just had a conversation with legal counsel here related to consent judgments. You probably already know this, but here no one can force you to sign away your consent. Of, course, many judges don't know the laws and have to be educated themselves.

I appreciate the fact that Oregon makes it quite easy to argue against a writ that has garnished exempt property. In fact, by law the garnishee here must send you a notice of your rights (and form) related to your ability to defend your exemptions. Since my wages are already garnished, and my remaining paycheck now gets deposited into an account that contains nothing but exempt wages, I still look over my shoulders.

The real problem in many places is that it can take several days or weeks to get the money returned to you.

As such, I stay pretty proactive. With three judgments against me, I keep active in speaking with the judgment creditors or their attorneys. Once they know that they can get in line and have to wait for garnishment, they seem to leave me alone. Attempting to garnish someone's wages here when their wages are already garnished can be an interesting timing game for judgment creditors. So, I try to help them along. The nice thing about garnishments for a high wage earner such as myself is that I am free to do whatever I want with the remaining wages; including holding up to $7500.00 of exempt funds in bank accounts.

Sorry I got a bit off track. I still think it strange that there could be states where a judge can force someone to sign a consent judgment.

[WhatMoney]

I still think it strange that there could be states where a judge can force someone to sign a consent judgment.

TreeHugger,
She was not forced to sign the consent agreement. The collection attorney provided the consent agreement and convinced her out of court that since this was her debt she had to admit to it and sign this form or she couldn't go home. When the signed consent agreement was presented to the small claims court judge, he said well alright then, consent judgment for the plaintiff - case closed. This was in a small Florida county.

I checked the court records for the last 12 months for that court and found only one other consent judgment, out of over 1000 court hearings for credit card debt in that county. She was simply confused and never should have appeared in small claims court in the first place without assistance. Her comments were that she was never allowed to talk, had no idea what happened to her, and it was over fast. She was convinced she had to sign the consent agreement or she would be held at the courthouse. Remember, 75, totally unsophisticated in all financial and legal affairs, legally blind in one eye, still recovering from hip surgery, and some senility. The perfect candidate for a Florida collection attorney.

[catleg]

You can't sign away your right to discharge a debt in bankruptcy in state court. That is effectively a reaffirmation, and BK judges look at those very carefully. The debt is what it is, a judgment can only convert it from unsecured to secured if the creditor is granted a lien on your property by the state court. This can be voided by the federal bankruptcy court if it impairs an exemption.

[BKDefender]

If your goal is to slow them down a bit so that they don't get a judgment that they can record against you, then you might consider filing an answer in the court to their complaint. You probably have a legal aid society in your area, or even a civil self-help section in your courthouse that can provide you with a how-to for submitting an answer. Generally most non-obvious allegations are denied. i.e. don't deny "Upon information and belief Defendant John Doe is a resident of City, State. The idea is if you are responding to them by filing an answer, most courts will require them to begin the discovery process which can take 60-120 days to complete before they file a motion for summary judgment. If they immediately file a Motion for Summary Judgment, you would file an opposition and generally your defense is 'We have not had time to conduct discovery and it is Defendant's belief that upon completion of discovery Defendant will prove that Plaintiff's claims are without merit." yadayadayada.

Of course the opposition isn't that simple but with help from your legal aid society or civil self-help center at your courthouse, you should be able to hold them off from getting a judgment against you so quickly.

Don't give up. It seems intimidating but if your lower court is as forgiving and understanding to pro-se defendants as the Justice Court in Las Vegas, even if you're not perfect in your forms, if the judge can read your pleadings and understand what you are saying and that you are actually opposing the summary judgment because you don't have everything from the creditor yet to prove that you don't owe them the money - then the judge could require a full early conference, possibly a settlement conference, a 60-120 day discovery schedule, etc, that would get you until May.

Sorry if I'm rambling, but I've seen WAY too many people just ignore this stuff and think they have no chance, but they do.

I'll give you a great example - a client was sued by creditor X (well sued then became a client). It didn't take much to see that in their motion for summary judgment they submitted statements that had a 3 year gap. So my response was basically that client accepted the ~$500 debt from 4 years ago but that the creditor had not submitted evidence of any charges that allegedly ran the debt to $5k during the missing 3 year period. The judge denied the MSJ and the creditor's attorney still can't get the creditor to provide him the 3 years worth of statements to prove client owes more than $500. Next step? Offer of judgment for $500.00.

Good luck!
William

[GoingDown]

If it was me, I wouldn't bother showing up to court. If the debt is within the statute of limitations, they will probably win anyways. Just file bankruptcy and get the judgment vacated later on.

And there is no way I would ever sign a consent judgment or agree to any payments.




MOST of my debts are now beyond the statute of limitations for Arizona, so I will fight against any and all lawsuits at this point. But, for some reason, most of my creditors seem to have completely given up on me and I don't think any of the remaining ones are going to file a lawsuit against me. They are just going to drop off my credit reports one by one and fade back into nothingness. Cool!