general questions about filing and the automatic stay's, and garnishments

[Elle615]

Forgive me if this has been answered elsewhere, but my searching hasn't found anything.
My husband and I were hoping to avoid bankruptcy.

Our troubles got really bad two years ago when we raked in a lot of medical debt. Which is now probably about $15,000. (doesn't include deliquent credit cards.)

we are well below the income median in our area.

we were sued, and a lawyer suggested my husband doesn't go to the court as the hospital creditors needed the judgement to write off the debt. If we were lucky, they'd write it off. We explained to them how we are economincally destitute. We offered payment plans, they refused. Well, they got the judgement. Now they are garnishing wages.

We get paid every two weeks. Now, we understood the law to mean that only what was over $351 for an every two week paycheck to be the amount they can garnish 20% of. (We live in Michigan.) Yet my husband's employer is giving them everything over $351. So did I misunderstand how it works?

(here's the link http://www.dol.gov/esa/regs/compliance/whd/whdfs30.htm)

So, we are living below poverty level for a family of our size. I've seen that just filing alone is $299. So that would be half a month's wages. Add in lawyer fee's...

so how would things work to help us?

our medical debt alone is more then a years income. I don't want to risk them garnishing paychecks and then seizing what is left in the bank. We're looking at years! (So far our garnishment has been $67 and $86.)

After talking to an attorny, would they file the bankrupcty IF we have a payment plan with them? Would that stop the garnishment? Or are we going to need to come up with $1500 - 2000? (If we had that much, we could nearly pay off the judgment. And probably continue to work with the other medical debt.)

I'm planning to organize everything to at least speak with a bankruptcy lawyer.

are there one's that work with low income families?

thank you!

[coma]

Filing would stop garnishments because of the automatic stay. Additionally, you could apply for a waiver for the filing fee. If granted, you wouldn't have to pay that. However, there are other costs, including the credit counseling, to consider, though there may be a way around that. The experts around here will chime in on that. You may want to check with the legal aid society in your area. They may be able to help you with the lawyer issue. You don't have to have one, but you'd be better off, believe me. Hang in there and keep asking questions...there are tons of great people here with tons of knowledge.

[lrprn]

Welcome to BK Forum, elle - glad you found us!

Your situation is why the bankruptcy laws were written in the first place. You sound like the perfect candidate for Ch 7 which would not only stop the garnishment but also wipe out all your non-secured debts as well.

Make appointments for free initial consultaitons with 3-4 bankruptcy lawyers in your area. You'll llearn a great deal during the consultations and see which lawyer fits your needs best. Bankruptcy lawyers are very used to their clients having no money so don't worry about that.

All of us here were hoping to avoid bankruptcy. Sometimes life just doesn't allow that to happen. You sound so far in the hole right now with your medical debt alone that you will never be able to get out on your own.

Filing bankruptcy needs to be a cold, emotionless financial decision, the same kind of decision the hospital made to garnish your wages. Don't allow fear or shame to keep you from filing. After two years, you'll hardly know you even filed. Mortgages are possible. New car loans are possible. Take a tour through the After Bankruptcy forums to see that for yourself. Do what you need to do for the health and well-being of your family - that's what really matters.

[SinkingFast]

You might be able to qualify for Hardship on the Filing Fee. Meaning you wouldn't have to pay the $299. Or you could apply to pay your filing fee in payments. That's a couple of options to check into.

Another thought for you is to call around and see if you have a Legal Aid office. Possibly some similar type of name. Many communities offer free legal assistance to people of low income. Something to look into to see if you qualify.

Otherwise, you can file on your own. It's called Pro Se. Several members of the Forum have file Pro Se successfully. There are some very good self help books. And you can ask questions here any time. Folks are always glad to help.

[Elle615]

I made an appointment to see an attorny thursday. (I want to make sure my husband can go to the first one at least.) I even told him we make less then $10,000 a year. He wouldn't quote prices, as he said he'd have to see what everything is first. Is this a good sign?


Next question, where do I find information on the hardship filing?

[woeisme]

Unforntunatly, as you have found out, they can garnish anything over the $351, up to 20% of your salary. So they can garnish everything you make above $351 unless you make more than $440 or so in a 2-week pay period. If you made $440, they could garnish $88 (20%), so you'd get $1 over the $351. If you made $450 they'd garnish $90 so you'd get $9 over the $351 and so-on.

If there is any way possible, what you really need to do is figure out a way to improve your income. I know, easier said than done, but with your income so low, you are always going to be one small bill away from disaster, and CH 7 isn't going to fix that. And if you file now, you have to wait 10 years to file again, so that's a long time to hope nothing else goes wrong. I feel for you!