Question Garnishment / Ch 13 Questions

[Haddit]

Hi All!

I've been viewing this site for a few weeks, and I really appreciate the information that is being given out by many very gracious and generous people. I thought I might join and see if I could try to find a little help with my situation, then of course share any experiences that might help others in my situation in the future.

I am currently employed, love my job and have a pretty good income. I have absolutely zero assets (the car is worth roughly what I owe). All my creditors and CAs know where I work. I owe about $90k in unsecured debt, and another $37k in non-home secured debt (stock, cosigned-not mine). I also have condo, but am behind in my payments, and I'm looking into taking a loss on a short sale versus foreclosure. My mortgage company supports my short sale idea, and is willing to spread the loss from the sale, interest free, over ten years. I have another place to live, as I'm getting married in Oct (my wonderful fiancee knows all about this mess), and will move in with my wife. After the wedding, I'll be moving from GA to TN.

Basically, I'm worried about my creditors and CAs suing, getting a judgement, and going to my employer for a garnishment. I've been told by bankruptcy attornies that while employers can't fire me for one garnishment, they CAN fire me for a second garnishment. This intimidates me, because I just LOVE my job.

As for bk, it would end up being a CH13, and an attorney told me that with my income, it would be a 100% payoff over five years. So I'm thinking that I'm better off negotiating monthly payments with my CAs than I would be in Ch 13, since it would be a 100% payoff either way, and I wouldn't have a bk on my record.

Right now, I seem to be very close to being sued by several CAs. I'm afraid that I don't have enough cash right now to send them much, even though after the wedding, I'll probably have enough each month to keep them happy. So I'm wondering about how the garnishments would go down.

For example, if two creditors win separate lawsuits, is this considered two garnishments, or just one? Would the two (or three, or more) creditors have to share in the 25% after tax limitation, or can they each get up to 25% of my after tax income? Basically, I'd be very concerned if I lose multiple lawsuits and my employer has to deal with two, three, or more separate garnishments.

Also, if I go into Ch 13 after a garnishment is awarded and placed into effect, will that erase the garnishment so my employer does not have to deal with the payroll issue anymore? And do employers have an equally cumbersome situation dealing with a chapter 13 as they do with a wage garnishment? One goal for going into Ch 13 for me would be so that my employer hopefully would not have as much to deal with.

Finally, is it worth it for me to send the CAs (that seem to be the closest to lawsuits) at least a little cash for now to try to stave off a lawsuit? They seem to be saying that they will accept any payment, but that it might not prevent a lawsuit.

Thanks for any input anyone has on this. This has basically become a part time job for me, and I'm really trying to find the best resolution for me and my new family. Thanks so much,

H

[justbroke]

I don't even know what to say about the 1 garnisment, not being fired, and 2 garnishments, you lose your job! You can't be fired for a Chapter 13 wage order (or the filing of a Bankruptcy).

In any event, the garnishments/judgments would be part of the bankruptcies and the garnishments would stop (by court order0.

You can only have one 25% garnishment at a time (it's up to 25% so, if one got 25%, then the other would have to wait).

Your employer may receive a Wage Deduction Order from the Court which stops all garnishments (including any from the IRS). It's not a big deal, and is no different than Child Support Orders.

[treehugger1]

Its up to you if you are going to send them "any" money. This all depends upon your goals.

1) If you are definitely going to file, then why bother sending anything?

2) If you send money then this is a payment activity. If you think som eof the accounts will not bother to sue and get moved from CA to CA, then you could outlast the SOL in your state. If you make a payment, you generally restart the SOL clock.

3) If your wages are being garnished due to debt (not child support, student loans, alimony, etc) then the BK will stop the garnishment.

In most states you can have multiple garnishments. Here is an example in Oregon:

A garnishment writ comes in to the employer. The writ is good for 90 days. Suppose a few days later another writ comes in. The second writ is also tied to the 90 day rule. If the first writ is satisfied within the 90 day period, then the employer must begin paying on the second writ. But, it could be that there is only a few of the 90 days left for the second writ and therefore they don't get their full garnishment. This leaves the issuer to submit a new writ.

Now, if a third or fourth writ comes in before the second writ expires, then the third is next in line until it is satisfied or expires. If there are a lot of judgments against you, then the CA's and creditor's have to take there best shot at timing when they have the writ served on your employer.

In Oregon, there is a line on the form sent to the employer that states," I had already received a writ of garnishment from another Granishor before this writ was delivered to me. Under Oregon law, th eprevious writ has priority. The previous writ will terminate on________."

So you can see that if a large garnishment comes in that cannot be satisfied in 90 days, then secondary writs run the risk of expiring before they have much paid on them.

Does this make sense?

I now have two judgments against me. The first garnishment will be satisfied (paid) in about 39 days. The creditor with the second judgment has yet to serve a garnishment writ on my employer. I don't know what they are waiting for. It is small ($600) and it could also be satisfied in the pay period 39 days from now. I was hoping they would issue a writ, because this just becomes another account that has been paid in full.

Of interest to me, is that the second creditor filed and received a judgment lien against real property. Of which I have none! But, they make take the stand that should I have real property in the future, then they might have something to act on.

Some states have garnishments that "never" expire until the writ is satisfied. This really creates a problem with other creditors/CA's as they could stand in line for a long time before their writ is acted upon.

I have now budgeted 25% of my disposable income to debt payments. If I have garnishment, then I pay nothing to others. SHould I have months where there is no garnishment in effect, then I'll take the 25% and negotiate with a creditor/CA.

While I know this may sound like it is unfair to others, it is strictly a personal finance decision. I am paying my debt down. In addition, what I do with the other 75% of disposable income is up to me. 75% of my income is always exempt from collections/creditors.

There is the chance in the future that a big CC will get a judgment and ask for a debtor's examination. A garnishment or two is a pretty good description of where my money is going. Garnishment works against your disposable inceom, but on the other hand, garnishment protects the remaining 75%. Well, its not like you want to put the 75% in a bank account. A bank account can be levied, and then it is up to you to file an exemption.

Sorry I went on for so long. Different states have different garnishment laws.

[treehugger1]

In Oregon, you cannot be fired for multiple garnishments. My payroll clerk told me I could have a dozen or more. Its' all automated in our payroll system. They just feed the writ information into the payroll system and it is all automated.

Keep in mind that there are more garnishments out there in the world then you are aware of; child support, alimony, criminal restitution, unpaid taxes, student loans, unpaid debts, etc. Its a tough way to "pay the bills," but for many folks it seems to work out in the end.

[Haddit]

Thanks!!

Thanks for the input. As it turns out, I went ahead and filed Ch. 7. Mostly I just love my job, and didn't want to risk the multiple garnishments and how my employer would view all the hassle. I talked with my labor union, and they said that our contract allowed for termination if my financial difficulty started to cause poor job performance. I know filing ch 7 doesn't change that contract language, but I figure my employer wouldn't care as much if they weren't having to handle multiple wage garnishments every pay period. I don't plan on having job performance difficulties anyway, but just didn't want to give my employer reason to go looking.

Also, I do like the idea of having the debts dismissed, versus having the creditors line up for years in a garnishment situation.

so far so good with the Ch 7; I received the notice of Meeting of Creditors, and it mentioned that the presumption of abuse didn't arise.

Anyway, thanks for all the input!