Question About Judgement/Court

[dontwanna]

I am in NC. On June 24th a sheriff's deputy showed up at my door with a Magistrate Summons for July 8, 2010. This is for an account with a credit union. It is still with original creditor, not collections, and was 90 days past due.

I had communicated with them, explaining our situation, that we were visiting an attorney about bk. That was about 1 week before getting this.

Our situation is that my pastor husband went through a forced resignation a couple years ago and we've had a drastic reduction in income. During that time, our 6 year old child has had two major heart surgeries, 3 major liver infections and now needs a liver transplant. She has spent months in PICU at Duke. She has at least two more heart surgeries ahead as well. She is on IV meds almost constantly and though we have insurance the copays alone kill us. Insurance will not pay for her nutritional needs to be met, so we have to pay that out of pocket as well. Not to mention frequent and long trips to Duke. I make those trips alone and stay alone because we can not afford for my husband to take off work or to pay for rooms or extra food up there. We have done all we can but can not avoid BK at this point. The problem is, after consulting with attorneys, the least expensive we can find is $1600. We can not afford it. I am sure it's worth it. But medicines and food are our top priorities right now.

The credit union is aware of this situation, and I can not dispute the debt. I can't afford bankruptcy. I don't know what to do.

More info if it helps:

The debt is in my name alone.

I am unemployed due to daughter's medical condition and inability to leave her with anyone else.

The only "asset" that has my name on it is the car, which is also financed with said credit union, but we have managed to keep it up to date. I need the car to get back and forth to the hospital. We owe about 5000 approx on it.

We have other debts that we are behind on, but so far, no other summons.

My questions:

What will happen if I don't appear? I have no defense. I owe this. I am not disputing it. I have had this open line of credit for 12 years. Until the last year, it was never late. Do I just appear and say that? Will they take my car?

Thanks in advance for advice. Please, no flames. I can't take anymore and I feel bad enough about not paying my bills as it is. Trust me. I'm humiliated enough.

[lrprn]

First, I am so sorry to hear about your daughter's multiple severe health problems. I was a PICU nurse for many years, and trust me that I completely understand that unless you are a multi-millionaire to start with, no one (and I mean NO ONE) even with decent health insurance can survive financially under all the medical and hospital bills you have already received. If you did have insurance for her, I'm betting you hit your maximum cap already or certainly will when the liver transplant is done.

There's no shame whatsoever by being completely overwhelmed financially for something over which you and your spouse had no personal control. You want your daughter to live and be healthy. What parent would not do exactly what you have done? So head up - you have no reason to feel embarrassed or ashamed of where you are now.

The biggest problem I see about filing bankruptcy now is that your daughter's health problems are not over yet. If you file now to get rid of the medical and hospital bills you have now, you'll have to deal with the medical and hospital bills coming after you file for the liver transplant. You can't add these bills to an already filed bankruptcy, and you can't file bankruptcy to deal with them again for at least four years (if you are able to file Ch 13) and eight more to file Ch 7 again.

You really do need to go to court on July 8 to share your story there in a straightforward way. The worst case scenario is that the judge goes ahead and allows the credit union to get their judgment against you. This will most certainly happen if you don't go. But you might be able to persuade the judge that without your car, your daughter cannot receive the medical care she so urgently needs right now. You didn't share if you have a home or other secured assets besides your car now, so that may also influence what the judge decides to do.

Frankly you have nothing to lose and everything to gain by telling your story in court on July 8. I strongly encourage you to do just that.

Are the hospital and physician billing offices aware of the severe financial problems you are experiencing right now? If they aren't, PLEASE share that immediately. The social workers and others who can intervene for you to get both financial and family help can't help you if they don't know how dire your financial problems are right now.

I will be keeping your precious daughter in my thoughts and prayers. Please keep us posted about what happens in court and hang in there. We're here for you whenever you need to vent or just need a shoulder to cry on. You aren't alone.

[dontwanna]

Thank you for your reply. No, we do not own our home. We rent. We do have two other vehicles. Both are in my husband's name. My son drives one for school and work. (He's in college, which he pays for.) It is a 1994 GMC truck and is paid for. My husband drives a 1998 Crown Vic, which is paid for. It is also in his name. Since his name is not on this debt, I think those vehicles are safe. Maybe? Neither are reliable enough to be heading to Duke all the time in them.

The car that I drive is in both our names. It's the one we owe the credit union on. Can they take it if his name is on it as well but the judgement is only mine?

I had not even thought about future medical bills. That puts a new light on it. I feel so trapped. I will go on Thursday and see what happens. But I have a feeling that judgements are going to pile up. As I said, this is not the only creditor. I can hope they won't try for judgements, but they are way more past due than this one was, so I am not feeling good about this. I am not sure I can take the stress of having to do this over and over and worry about losing this car and deal with all this medical stuff. My husband is currently driving a truck, and he works every hour/mile he can. So I pretty much deal with this all by myself as he's never home.

Sorry for the whine, but I need to find some relief somewhere.

[nervous1]

Hi - I am so sorry for all that you are going through. Our children are #1 and you have enough stress worrying about her health problems w/o all the financial mess too.

Have you applied for food stamps (I'm not sure what the program is called in NC.)? Perhaps that would help with the food expense. I had to humble myself and admit that it was better to apply for FS than it was to keep charging groceries. We have starting receiving $668 a month. HUGE relief. I wish I had done it months ago, but I was just too proud.

As far as the medical expenses, I think that LRPRN is correct that you need to talk to the billing offices about your financial limitations. I know that when my mom was battling cancer, she was to apply for grants.

I will keep you all in my thoughts and prayers. My heart does out to you and the immense stress you are going through.

[dontwanna]

Thank you, Nervous.

I have been told that we don't qualify for anything because my husband makes right at $50,000 per year for our family of 5. But his income has been erratic for the last few months due to the economy around here. We have a twenty year old who was working full time until about 6 weeks ago when he lost his job. But he only made enough to pay for school and his living expenses most of the time. He did help some with drug copays and trips to Duke when he was able. He had his own savings and so he can provide his own gas money and etc. for now. He has applied everywhere, even retail and fast food and so far has had no luck finding another job. He has a good work history, so I don't understand that. Besides the 20 year old, we have a 5 year old and a 6 year old.

Even on what my husband makes, but the time we pay taxes, insurance premiums out of his check our bring home pay is averaging around $700 per week. After we pay rent, utilities, car payment, copays, travel expenses, nutritional needs for my daughter, and give him money to eat on (he's a trucker, so packing meals is out), there's little left, but we are surviving. But there's nothing left to pay other creditors, or to file bankruptcy. Much less buy things like clothes, etc.

I couldn't sleep last night and I started looking around. Our case would be fairly simple and I am looking into doing a Pro Se case. I think I am capable of that if I get some time to myself to do it. I think if I can work on it after my kids are in bed, I can get that done. I am going to the library today to check out the Nolo book that folks on this forum talk about and try to get this going. I know it won't be easy, but something has to give. And I feel better just feeling like I might have a plan.

When I go to court on Thursday, I will explain our situation and hopefully let them know our intentions. If I can pay the filing fee in installments, which if I read the guidelines correctly for NC I can, then I can swing it. If nothing else, my son is willing to help with that. (Yes, I have a great kid who understands what it's like to struggle because of this.)

Like LRPRN said, we have a lot ahead. I don't know what to do about future medical bills, but you mentioned grants and I am going to call Duke and get that going if we are eligible after this. And also, I have been told that my daughter should qualify for SSI because of her needs. We would not get any income because my husband makes what he does, but she should be able to get Medicaid to pay her copays that our insurance will not pay. We will still have to pay for her special nutrition needs because they will not cover that. But even doctor office and medicine copays and yearly deductibles would be a big help for us.

Thanks to both of ya'll for your compassion.

[Exployer1234]

I am so sorry you are going through this. Medical bills add up so quickly that it is overwhelming.

Make sure when you show up you have all your daughter's medical bills in hand to show why you have not been able to pay the creditor.

Also I CAN NOT STRESS THIS ENOUGH...DO NOT SETTLE WITH THEM. Make the case go in front of the judge. Some states the judge will ask you to step outside the court room to see if you can work out of a settlement. Just decline any settlement offer and ask for the case to go in front of the judge. That will give you 2 more weeks at least to build a defense. The judge may offer a wavier or a reduced payment. If you settle with the company they will take 25% of your net income each month. The judge may only give them 10-15% of your net income or completely hold out on taking anything right now due to the medical expenses.

[dontwanna]

I am so sorry you are going through this. Medical bills add up so quickly that it is overwhelming.

Make sure when you show up you have all your daughter's medical bills in hand to show why you have not been able to pay the creditor.

Also I CAN NOT STRESS THIS ENOUGH...DO NOT SETTLE WITH THEM. Make the case go in front of the judge. Some states the judge will ask you to step outside the court room to see if you can work out of a settlement. Just decline any settlement offer and ask for the case to go in front of the judge. That will give you 2 more weeks at least to build a defense. The judge may offer a wavier or a reduced payment. If you settle with the company they will take 25% of your net income each month. The judge may only give them 10-15% of your net income or completely hold out on taking anything right now due to the medical expenses.

Thank you for your reply.

I don't have any income right now for them to take. They can't take my husband's income can they if his name is not on the debt? I have been unemployed for almost 3 years due to her illness. My husband was able to keep up with the payments on his own until the last 8 months or so, when she has been hospitalized 5 times and his income has been erratic.

Like I said, my concern is the car. I have removed my name from the checking account, so they can not take that. Not that there's anything there anyway.

I never saved receipts from anything so now I am in a mess. I can get records from the hospital and pharmacy about her medical issues if I need to, but i am not sure I can do it by Thursday.

[jacko]

You are obviously collection proof. Do you live in a community property state?

Knowledge is power when talking to a creditor. Keep in mind, since the debt is not in your husbands name and if you don't live in a community property state, what is their to garnish? You have no wages and that your assets are exempt.

Also remember, if you had income, the garnishment amount is determined after taxes are withhold and family exemptions are factored in.

What ever you do, do not file BK as along as your child needs medical care.

Thank you for your reply.

I don't have any income right now for them to take. They can't take my husband's income can they if his name is not on the debt? I have been unemployed for almost 3 years due to her illness. My husband was able to keep up with the payments on his own until the last 8 months or so, when she has been hospitalized 5 times and his income has been erratic.

Like I said, my concern is the car. I have removed my name from the checking account, so they can not take that. Not that there's anything there anyway.

I never saved receipts from anything so now I am in a mess. I can get records from the hospital and pharmacy about her medical issues if I need to, but i am not sure I can do it by Thursday.

[dontwanna]

How do I find out if NC is a community property state? I believe I read that it was not, but I am not sure. In NC they can not garnish wages, I believe, but they will take your checking accounts. Or so I've heard. So that's why I have closed mine, or will, when the last item clears in a couple days. My husband has already opened his own. He has to have one for direct deposit which is required by his employer. He works in SC.

[dontwanna]

I just googled it and NC is not a community property state.

So my only concern is them taking the car. It has both our names on it and we owe about $5000 or so. Value is probably around 6,000 to 6,500 according to Kelley Blue Book. It is financed with the same credit union as the judgement account. But payments are current on it.

[jacko]

From the 2009 Nolo BK7, your only vehicle exemption for one vehicle is $3500. Plus you have 2 wild card exemptions. The first exemption is up to $5000 of unused homestead can be applied to personal property. The second exemption is that $500 can be applied to any personal property as well.

You might google/bing for updated NC exemptions since states update the exemption amounts every 2-3 years.

Looks like both of your vehicles are covered.

Remember knowledge is power when dealing with a creditor(and their attoneys to).

I just googled it and NC is not a community property state.

So my only concern is them taking the car. It has both our names on it and we owe about $5000 or so. Value is probably around 6,000 to 6,500 according to Kelley Blue Book. It is financed with the same credit union as the judgement account. But payments are current on it.

[dontwanna]

From the 2009 Nolo BK7, your only vehicle exemption for one vehicle is $3500. Plus you have 2 wild card exemptions. The first exemption is up to $5000 of unused homestead can be applied to personal property. The second exemption is that $500 can be applied to any personal property as well.

You might google/bing for updated NC exemptions since states update the exemption amounts every 2-3 years.

Looks like both of your vehicles are covered.

Remember knowledge is power when dealing with a creditor(and their attoneys to).

Thanks! I had just found the NC exemption form for judgment debtors and it shows the one vehicle and the $5000 under homestead. I don't see the $500, but I don't anticipate needing it. Blue Book on both of the older vehicles together is only $3800. But they are in my husband's name anyway. So that would only be an issue if a judgement is obtained on him by someone. He only has one account that would be in question.

So, now, about bankruptcy... my daughter may not get a transplant for a few years if her liver lasts that long. They will not list her for a donor until her heart is repaired to the point that they think they can give her a good chance of surviving a liver transplant. So far, we are not there yet. For now we medicate her liver, place drains in it, whatever it takes to make it last. Her heart repair is being done in stages and if her pulmonary arteries don't grow, it will never be fully repaired. In that case, she will get shunts replaced in her heart every year or two as she grows. She will never get a new liver and will likely not make it to adulthood because of that. She has a genetic syndrome causing defects that have led to all these problems. So my point in all that is that there is never going to be a point when we are not looking at major health procedures, at least not for the next 5-10 years we think. If all goes well, by the time she's an adult, she could live a fairly normal life without so much trauma. So do we keep putting off filing and never be able to have checking accounts, direct deposits with employers, etc. due to fear of them being seized? At what point do we wipe the slate clean. If accounts do get seized, we could end up homeless, literally, as we live paycheck to paycheck. I understand about future debt, but I guess I am asking questions no one can answer. We are never going to be out of this as long as my daughter needs medical care. This is unreal. We try to so hard to do the right thing and provide insurance and care for our kids and we are still going to never be able to have anything. Am I over reacting or is this a valid analysis of what we are facing because of the future medical issues? I can't give up on my child because of money.

[jacko]

How much debt do you have? The debt is in your name, plus you and husband took proactive steps to protect your funds. With the debt in your name, they can't go after what you don't have.

Also, you may want to wait when the health care reform is in place to see if you can get a break on co pays.

Remember, you can file BK once ever 8 years.

Thanks! I had just found the NC exemption form for judgment debtors and it shows the one vehicle and the $5000 under homestead. I don't see the $500, but I don't anticipate needing it. Blue Book on both of the older vehicles together is only $3800. But they are in my husband's name anyway. So that would only be an issue if a judgement is obtained on him by someone. He only has one account that would be in question.

So, now, about bankruptcy... my daughter may not get a transplant for a few years if her liver lasts that long. They will not list her for a donor until her heart is repaired to the point that they think they can give her a good chance of surviving a liver transplant. So far, we are not there yet. For now we medicate her liver, place drains in it, whatever it takes to make it last. Her heart repair is being done in stages and if her pulmonary arteries don't grow, it will never be fully repaired. In that case, she will get shunts replaced in her heart every year or two as she grows. She will never get a new liver and will likely not make it to adulthood because of that. She has a genetic syndrome causing defects that have led to all these problems. So my point in all that is that there is never going to be a point when we are not looking at major health procedures, at least not for the next 5-10 years we think. If all goes well, by the time she's an adult, she could live a fairly normal life without so much trauma. So do we keep putting off filing and never be able to have checking accounts, direct deposits with employers, etc. due to fear of them being seized? At what point do we wipe the slate clean. If accounts do get seized, we could end up homeless, literally, as we live paycheck to paycheck. I understand about future debt, but I guess I am asking questions no one can answer. We are never going to be out of this as long as my daughter needs medical care. This is unreal. We try to so hard to do the right thing and provide insurance and care for our kids and we are still going to never be able to have anything. Am I over reacting or is this a valid analysis of what we are facing because of the future medical issues? I can't give up on my child because of money.

[treehugger1]

While it is not guaranteed, it is likely that there is a clause that links your defaulted debt with the credit union with any "assets" you have that are tied to loans through the CU (i.e. the car loan.) While it may be that you are well within your exemptions to protect your vehicle, you may have to "claim" your exemptions after the CU possibly repo's your car.

One of the fallacies that seems to come up over and over is that if you are within your state exemptions, you are fine. Well, you may be fine, but this is only if you play by your particular state rules. Someone can garninsh your wages, repo a vehicle, attempt a sheriiff's sale on property, and it can be up to you to provide evidence that such actions should not occur. Many times this is after the fact.

Do your homework. Does the judgment against you create liens against real property without further action from the plaintiff? Liens against personal property?

Does your credit union have the right to seize your vehicle because you defaulted on another loan with them? This would not be unusual for credit union agreements that I am familiar with.

[tay666]

I would not even think about filing BK until after all the medical stuff is over.
Or you will be right back where you are now.

Yes, it will be hard, and a major pain. I know, as we have been waiting over 3 years to file.
But it is the most prudent path to take.

You don't own a home for them to attach leins to.
You have no income for them to garnish.
The only real problem will be the car, as they will likely seise that due to cross-colateral agreements.
Which reminds me, do you have checking or savings accounts there?
If so, I would change banks on those.
Then look for another car with payments around what you are paying now, and have your husband get it in his name only.