Damned if I do,damned if I don't .

[ghk3rd]

Here is a synopsis of my situation .
I am a 72 year old retired civil servent. My only income is a 6000 month CSRS pension. I am told this income is exempt from garnishment and judgements .
I own a home jointly with my daughter and son-in law . The mortgage is appro 500K,and the estimated sale value is 326 K .I pay 3000 a month on the mortgage. When I die the other owners will not be able to keep the house .
In October of 2008 I went through hospitalization and surgery for colon cancer. The bills were many thousands of dollars and I put them on credit cards . I owe approx 70K on ccs.Stopped paying ccs March 2009 .

Option one - stop dir dep of pension and have them mail me a paper check which I will deposit into my grandaughters checking account . Is there any way the creditors could freeze her account since she has no business relationship with me ?

Option two declare Bk -enough secured debt to qualify for a 7 ? Why spend several thousand for lawyers when I have no assets ?

Everybody I ever used as relatives on my ccs are now deceased and can't be harassed .

My phone bell can be turned off and I can screen calls .

What would anyone else do in my case and why . Thanking you in advance for your responses .

[DeadManCrawling]

You present a quite unique case for reasons you are mostly aware of, I am sure.

What state are you in? That is a good place to start.

If your income is exempt, you can, often, in most states, file a document with the county clerk stating this. This, essentially, is a public notice to creditors that you cannot be garnished. It is effective, if your income is truly beyond reach, at least in most cases.

If this is possible, there is no need to deposit your money in a new fashion, such as granddaughter's account.

For their sake, and your peace of mind, I would strongly suggest that they find a way to boost income or make better living arrangements. They are flirting with disaster, and I hate to be crude, but your main portion of life is past. You may have, and probably do have, another decade or two or three, but these folks need to make their own way at some point. If their sole hope for the future is predicated on your retirement checks, they are leeches.

You may love them, and probably do (or they would not be with you), but they need to have some firm financial footing of their own. This must weigh heavily on you. It would me.

In any case, I do not think it is ever too late to file CH7. If you do so, all debts are gone, and if you are alive in ten years when the next bout of financial ailments spring, you will have been recovered from this one, and may have the credit you need for the next battle.

I mean no disrespect by anything I wrote, and hope it is taken in the spirit of advice, which is intended. You have my admiration for being willing to take on the fight when it might seem easier to just coast for the remaining years or decades.

Best,

-dmc

[JRScott]

They can still put a lien on the home. Which may not matter to you since you know ultimately they will lose the home anyway.

Like DMC says really need to know your state.

[ghk3rd]

Thank you for your response. I live in southern Maryland . The only reason I fear account seizure is from postings on this forum. The posters say some collectors will garnish your account even if they believe it is exempt. You will eventually recover your funds but it may cost thousands in legal fees and years of time before it happens.

In this area anyone with less than 100K income cannot afford to buy a decent house in a nice neighborhood.When my youngest grandaughter reaches 18 in four years ,they will no longer worry about the neighborhood and will try to get a smaller house that they can afford .Together they make approx 75K . Around here that isnt enough to afford a single family upscale home .
My original home,where my daughter grew up went from 75,000 in 1980 to 375 ,000 in 2005 . When I moved -in 2005 - housing,in this area was appreciating almost 10 percent a year . This house would be worth 600,000 if that had continued. The kids bought this house with me as an investment - a bad investment as it turned out . Now we are all stuck waiting for housing recovery . I doubt I will live long enough to see it .
BTW how would one find out if exempt income protection is available in ones state ??? Thanks.

[OHBOY]

Quote: "If your income is exempt, you can, often, in most states, file a document with the county clerk stating this. This, essentially, is a public notice to creditors that you cannot be garnished. It is effective, if your income is truly beyond reach, at least in most cases."

DMC: I 'heard' you mention that once before, but I was under the understanding that a Declaration of Assets & Exemption can only be filed AFTER a person has been sued and a case number is established...?

I would love to file such a document immediately, prior to any lawsuit, but I am wondering how to go about doing so...and whether or not it would suffice to just make a statement via declaration that lets the 'world' know that all of my income and assets are exempt from attachment...?

[JRScott]

Okay Maryland gives us a good starting point.

Yes your Civil Service Pension is exempt in maryland (Well they allow the federal supplemental exemptions which exempts it).

Yes there are low lifes that may still move against your account even knowing it is exempt .

Although Maryland has no homestead exemption, the fact your under water means you might could keep the home in a bankruptcy anyway since you have no equity in the home.

You might check with local lawyers in your area 3-5 and get their take on the situation. You might also see about getting a current appraisal and see what the property is really worth (In essence make sure its worth what you think).

[OHBOY]

Wouldn't filing for Bk be a problem as income from ALL poeple in the family, incl. the non filing ones,needs to be on the schedules (?)..... Please, somebody 'hone in' on this....

[ghk3rd]

I would like to know that too . We are tenants in common for 2 mortgages total is 508K. How could all adults file bankruptcy using a commonly held debt as the anchor ??? All of us owe it,some of us pay it .Split the debt three ways ?? I am very confused ...I ran the means test using the debt for all filers and we passed -no abuse test ...

[DeadManCrawling]

OHBOY,

The county clerks in some states are required to file pretty much any document you hand them. I have not filed one of the asset exemption claims, but have read a bit about them. Their legal standing is unclear, but usually the people who file them are expecting to be sued and use it to try to thwart garnishment of exempt wages.

When filed, if you can or do pursue this, you would give a copy of the filed exemption to your bank, credit union, mortgage holder, whoever you wanted to refuse the garnishment or lien. Whether they accept it is uncertain, but in the eyes of a person filing it, it is worth attempting in the hopes that someone in the chain will recognize it. Later, if you DO land in court, there is a higher chance of success with less money spent.

That's the theory.

I know a couple folks here on the forum filed this sort of document. Whether it helped, I can't say, and we debated the merits of doing so. It may not help, but it can't hurt either.

For multiple holders of debt, who are not married, wouldn't you all have to file separately? I mean, your kids as a couple, and you singly? I imagine the exemptions would be tested three times doing this, but only one could claim the homestead exemption? I do believe income from all sources would need to be considered, as well, and though yours is exempt from the means test, CH 13 may be a possibility once the overhanging debt load is relieved. Just thinking aloud, so to speak.

Best wishes with all this, and I hope it all turns out well.

[jribe]

I used to work in banking and will tell you that you cannot deposit *your* check into your granddaughters account. That is, unless you are on the account yourself.


Why are you wanting to do option one, if you're saying the money is exempt from garnishment anyway?

Here is a synopsis of my situation .
I am a 72 year old retired civil servent. My only income is a 6000 month CSRS pension. I am told this income is exempt from garnishment and judgements .
I own a home jointly with my daughter and son-in law . The mortgage is appro 500K,and the estimated sale value is 326 K .I pay 3000 a month on the mortgage. When I die the other owners will not be able to keep the house .
In October of 2008 I went through hospitalization and surgery for colon cancer. The bills were many thousands of dollars and I put them on credit cards . I owe approx 70K on ccs.Stopped paying ccs March 2009 .

Option one - stop dir dep of pension and have them mail me a paper check which I will deposit into my grandaughters checking account . Is there any way the creditors could freeze her account since she has no business relationship with me ?

Option two declare Bk -enough secured debt to qualify for a 7 ? Why spend several thousand for lawyers when I have no assets ?

Everybody I ever used as relatives on my ccs are now deceased and can't be harassed .

My phone bell can be turned off and I can screen calls .

What would anyone else do in my case and why . Thanking you in advance for your responses .

[ghk3rd]

According to this forum,some collectors will freeze your account even if it contains exempt funds. You can take them to court and get it back but it may cost thousands in legal fees and take years to accomplish.

Could I endorse it to my granddaughter and take it out in cash ,then deposit the cash in her account ????

Do banks have to honor and cash federal government checks ??

When I was still working my biweekly check was around 3K and I was able to cash it while out of town and on vacation using a relative as reference .

[Bell30656]

My experience with banking is different than jribe. I've deposited many checks from others into my account without them being on my account. I deposited my former step-daughter's checks every week for over a year until the divorce last year. While she was over 18, she didn't have a bank account of her own. I simply endorsed beneath her signature and put it in the checking account.

[JRScott]

I would like to know that too . We are tenants in common for 2 mortgages total is 508K. How could all adults file bankruptcy using a commonly held debt as the anchor ??? All of us owe it,some of us pay it .Split the debt three ways ?? I am very confused ...I ran the means test using the debt for all filers and we passed -no abuse test ...

If you were filing for instance and I assume the 3k you pay towards the mortgage is the majority, then yes you include the other household incomes in the means test but then back out what they are not contributing to the household, this is something you'll have to talk to your lawyer.

You would use full value of the debt as far as I'm aware on your forms but better ask a lawyer

[JRScott]

According to this forum,some collectors will freeze your account even if it contains exempt funds. You can take them to court and get it back but it may cost thousands in legal fees and take years to accomplish.

Could I endorse it to my granddaughter and take it out in cash ,then deposit the cash in her account ????

Do banks have to honor and cash federal government checks ??

When I was still working my biweekly check was around 3K and I was able to cash it while out of town and on vacation using a relative as reference .

Wells Fargo is the worst offender, if you have accounts with them I'd start moving them and be sure to move to a bank/credit union you have no debt with.

You could deposit in your granddaughters account however I'm not sure they would allow cash back during the transaction, the problem is then you have to rely on your granddaughter to give you your share, if she say decided to go and spend it on a big screen tv it was sadly her money since you put it in her account.

[ghk3rd]

I used to work in banking and will tell you that you cannot deposit *your* check into your granddaughters account. That is, unless you are on the account yourself.


Why are you wanting to do option one, if you're saying the money is exempt from garnishment anyway?

btw-I receive many large (1000 +) gift checks ,just endorse and deposit them . What is the difference ??? I would use paper checks not dir deps ...