Judgement question

[jb4lcm]

I am trying to get my ducks in a row so please help if you KNOW what goes on here.

I had a voluntary repo of a 5th wheel trailer. Owed $39K, found a buyer for it at $28K. Offered the 28K to bank of the west who said "not interested". Gave the trailer back 2 years ago and they immediately wholesaled it for $17,000. Now two years later the loan is now being worked by a collection company. We offered 10% ... they said they will take us to court.

IF we go to court, how does the court determine the amount owed? Do they take into acoount our offer that was $11K more than what they sold it for?

I own a small retail business. Most of my inventory is on terms so I do not "own it". IF the court awards a judgement to bank of the west, are they able to a get a writ and take over the inventory in my store? If so, how is the value of merchandise determined? Anyone can sell a $10 dollar bill for $5. So how do I protect the business and get a fair shake?

JB

[justbroke]

The court figures out what your balance was and then subtracts the amount that came back from auction. That means $11K. Then, since it goes to court, you get to pay all the attorney fees, collection fees, and accrued interest (if allowed by the original contract -- and typically, it is!).

I can't make any suggestions to circumvent the law or try to "hide" assets from creditors. You could try to offer more than 10% to the collection agency or you could fight them. If you lose, you will probably lose big (with thousands in additional fees on top of the $11K).

You cannot protect your business assets unless it's a duly structured and registered corporation. If this is some sort of consignment business, then you don't own the inventory. If your inventory is purchased on credit, then there is probably a lien on the business assets anyhow (and equipment).

You really need to speak to an asset protection attorney or bankruptcy attorney that can look at how your business is organized and whether it would be protected from personal collection/judgment issues.

[Pjmax]

JB, I think if I'm reading right, it's $39,000 less repo sale of $17,000, which would be $22,000.

[justbroke]

Yes, $39K less $17K. Whatever the amount, that is what is at risk.

[GoingDown]

I am trying to get my ducks in a row so please help if you KNOW what goes on here.

I had a voluntary repo of a 5th wheel trailer. Owed $39K, found a buyer for it at $28K. Offered the 28K to bank of the west who said "not interested". Gave the trailer back 2 years ago and they immediately wholesaled it for $17,000. Now two years later the loan is now being worked by a collection company. We offered 10% ... they said they will take us to court.

IF we go to court, how does the court determine the amount owed? Do they take into acoount our offer that was $11K more than what they sold it for?

I own a small retail business. Most of my inventory is on terms so I do not "own it". IF the court awards a judgement to bank of the west, are they able to a get a writ and take over the inventory in my store? If so, how is the value of merchandise determined? Anyone can sell a $10 dollar bill for $5. So how do I protect the business and get a fair shake?

JB

I'm just throwing this out there. Do the creditors know anything about your business right now? The less you tell them about it, the better. The less they know about it, the better.

You said you do not actually own most of the inventory. Make sure you have documentation to back that up, where someone else has some sort of lien on it, or some claim to it.

I would personally make sure that any inventory that is owned by me gets used up or sold first. And since it is a retail store, beware of what is called a "till tap."

I was self-employed, too, to avoid paying a judgment, but since I did mainly construction and landscaping, I was able to let Home Depot store all of my inventory, and just buy the parts I needed to use on a job the day I did the job, rather than keeping a large inventory of parts and supplies.

One thing to also keep in mind is that they may be bluffing. A lot of debt collectors threatened to sue me, but only one of them ever actually sued me-- Capital One. And they never got a penny out of me, even with their judgment.

Most of them hate to go after self-employed people. They would much rather garnish wages, seize checking accounts, and slap a lien on real estate. Those are their favorite ways of using a judgment to get paid.

If you don't have those things, they tend to lose interest in you.

[OhioFiler]

They would prefer to settle. Don't be afraid of them. Hint at possible bankruptcy. I'd bet they bought the debt for a couple hundred dollars at most.