How late were you before you were served?

[jacko]

You need to settle all at once. If you settle one, it shows up on your credit report and your other creditors will see it which could initiate a legal suit. That 6K balance most likely includes a $1000 worth of late, delinquent and 30% default interest. So your balance minus $4000 could be a $1000 gain on your taxes.

I would not settle if you are collection proof. You're credit is shot and would not change if you did settle. You need to put your interest first and foremost instead of whats best for your creditors.

If you do settle with one CC company and then need to save again before you can settle with another...Do they come after you with blood? are you better off saving until you can settle w/all CC's if this is your intent instead of BK?

Does anyone know what the tax rate is for those that you settle? I got an offer to settle a $6k CC for $4k. So I would pay taxes on the $2k difference Is that correct?

thanks

[jacko]

Do you know the rules behind garnishment? They can only garnish up to 25% of your net(after the taxes are withhold) take home pay after the federal income exemptions are met. How many children do you have?

I am pretty much in the same situation with you. I think that I'm going to have better luck settling with my cc companies.

Discover filed against me in March, 10 months after I stopped paying.

The house foreclosed 12 months after I stopped paying.

The calls got nasty- My husband and I had no income. No unemployment, no anything- and they were unsatisfied with the fact that we were feeding our children rather than paying them- so I stopped answering the phone.

Then I moved. 4 months after I stopped paying, I moved....and they haven't found me. y.e.t.

I am not collection proof. They will garnish if they file.

[lovemybugs10]

That is where I am doing most of my reading now. From what I'm reading, if they garnish they get 100% plus whatever fees they tack on....so I'm hoping to avoid it by offering settlements. But if they garnish, they garnish...the others will have to wait in line....and by that time the sol will be close to up, and I would only have to pay 1 more at 100%

25% is still 625 a paycheck after having everything withheld we can (tax wise). Right now I'm offering discover 550 a month for 6 months. Less than 1/2 of what they would garnish for.

We have 2.

[jacko]

Are you also factoring in your family household exemption? Since you are a family of four, your first estimate $1900(from memory) of net monthly income is exempt from garnishment. The IRS publishes a exemption table that will guide you on estimated garnishment number.

That is where I am doing most of my reading now. From what I'm reading, if they garnish they get 100% plus whatever fees they tack on....so I'm hoping to avoid it by offering settlements. But if they garnish, they garnish...the others will have to wait in line....and by that time the sol will be close to up, and I would only have to pay 1 more at 100%

25% is still 625 a paycheck after having everything withheld we can (tax wise). Right now I'm offering discover 550 a month for 6 months. Less than 1/2 of what they would garnish for.

We have 2.

[pepperoncini]

Does it make a difference if you've retained an atty? The timeline...

We have paid the full retainer for an atty for BK13. Filed BK7 in 2004 after our daughter's drowning death.

We're low income (food stamps, welfare...*sigh*) and have 4 kids. Make $37K a year.

I want to hold out two years and file a BK7. My best calculations say we'll pay $20-$30K into a BK13 with our tax refunds and payments.

$20-$30K would pay off one of our student loans!!

I'm trying to stay still until we can file a BK7, but I dunno...2 years is a LONG time. We're 1 year behind with Chase (highest debt) at $9K...they charged off and I DV'd the CA...

[Fallonedward]

You need to settle all at once. If you settle one, it shows up on your credit report and your other creditors will see it which could initiate a legal suit. That 6K balance most likely includes a $1000 worth of late, delinquent and 30% default interest. So your balance minus $4000 could be a $1000 gain on your taxes.

I would not settle if you are collection proof. You're credit is shot and would not change if you did settle. You need to put your interest first and foremost instead of whats best for your creditors.

Jacko: thanks for the info. With a family of 5, my most important need is to feed my kids and keep a roof over my head

[lovemybugs10]

Jacko- I'm not seeing anything here- http://www.fair-debt-collection.com/...ent-law.html#1

Nothing more than the 25%. Care to point me in the right direction.

Our take home is 5800.


Does wage garnishment come before funds for 401k is taken out?

[flyinbroke]

If I am not mistaken, the net pay (after all money is removed) is what is garnished. And, if memory serves, retirement plans do not count against you and are not garnishable so it was advised to park cash in them to lower cash vulnerability (note...this does NOT apply to BK).

With kids, you already have all sorts of exemptions too.

[lovemybugs10]

That's good to know about the 401k. We could just move what is going into savings into there.

Where do I find the exemptions?

[Quagmire]

Thank you very much Exployer1234 FallonedwardLovemybugs10noneLoadedGuns, thank you for sharing what has happened with you. At least I feel better reading that it appears that you had several months before things got ugly for you legally. I am just hoping that I have enough time to put a plan together to avoid being served and or being taken to court.

Thanks Everyone!Everyone!

Quagmire

[jacko]

Only up to 25% of net income after exemptions are factored can be garnished regardless of how many creditors you have.

You can minimize the garnishment by resetting your tax withholding exemptions to zero for max, plus have additional money withhold and receive a large tax refund(not direct deposit, but via check to minimize seizure). Some use this method to contribute to their ROTH IRA.

There are stickies that explain garnishment including your rights and exemptions.

If you agree to a settlement payment plan with one creditor, it will show up on your credit report for your other creditors to see and they will sue for garnishment. Do not settle.

401k contributions are not calculating in determining garnishments.

Jacko- I'm not seeing anything here- http://www.fair-debt-collection.com/...ent-law.html#1

Nothing more than the 25%. Care to point me in the right direction.

Our take home is 5800.


Does wage garnishment come before funds for 401k is taken out?

[jacko]

For a family of five, your first $2300(from memory) net income is exempt from garnishment. You may want to inform your work payroll office of your exemption. The IRS publishes a table on exemption amounts for household size.

Jacko: thanks for the info. With a family of 5, my most important need is to feed my kids and keep a roof over my head

[jacko]

So why don't you hold out? Looks like your collection proof. Why can't you file a BK if your income is $37K which is below most states medium?

Does it make a difference if you've retained an atty? The timeline...

We have paid the full retainer for an atty for BK13. Filed BK7 in 2004 after our daughter's drowning death.

We're low income (food stamps, welfare...*sigh*) and have 4 kids. Make $37K a year.

I want to hold out two years and file a BK7. My best calculations say we'll pay $20-$30K into a BK13 with our tax refunds and payments.

$20-$30K would pay off one of our student loans!!

I'm trying to stay still until we can file a BK7, but I dunno...2 years is a LONG time. We're 1 year behind with Chase (highest debt) at $9K...they charged off and I DV'd the CA...

[lovemybugs10]

I know that they will try to sue- but it will take a couple weeks before it hits the courts, at least- and like I'm doing with discover now (paying them over 6 months) I would do with the other two.

I posted in the wage garnishment sticky. For the sake of time I'll repost the skinny here- they can, after all exemptions still garnish 900 (and something) a month. It will only take a year to pay off Discover, then a year for BOA then 2 for Citi. So why would I let them garnish, if it gets me no where but paying 100% plus fees and interest, etc. I can pay off both boa and discover at 40
% in a year, then Citi in about 8 months.

I don't understand what is wrong with that?

[Fallonedward]

For a family of five, your first $2300(from memory) net income is exempt from garnishment. You may want to inform your work payroll office of your exemption. The IRS publishes a table on exemption amounts for household size.

Jacko: thanks so much... I currently only take one exemption instead of 5, to get more money to use now...

maybe I should kick it back to 5 deductions to protect myself but then I would not be able to pay my core bills on just my salary and hubby's unemployment. Like House Payment, House Insurance, Car Payment, Car Insurance, Food and Gas....ugh so scary

I'm 3 months behind in my cc cards this month