New Member- Advice

[dem]

Hi,
I was laid off my job about two years ago. I had significant credit card debt, $80,000 spread over about 7 cards, and I stopped paying on most cards about a year ago, the last one over 6 months ago. I have found no reasonable employment, and am living off the assistance of family. Thus, I had no way to continue paying on my cards, and have blocked out all collection calls from my phone, and ignored speaking to anyone. I receive the notices in the mail threatening lawsuits and know it is likely a matter of time before they sue. I live in South Carolina which has a law against garnishment of wages, and I am basically judgement proof. I rent where I live, lease a car, and have no obvious assets creditors can go after. I have thought about bankruptcy but have some personal collections that would likely go over the exemption amounts. Question for the board- what is my best course of action, I know I will get sued, but really have nothing to lose if I do, but dont want to go through all that and wait 10 years for the lawsuits to expire. I do have family that I expect to be left assets at some point, and this could occur before the 10 years is up, no way of knowing. I also dont want to file bankruptcy and have to go through the court system. Since I think I am legitimately judgement proof, and have no worry about having wages garnished because of my state, does anyone have any advice for me or insight into my situation. Thanks

[AngelinaCatHub]

First of all, welcome to the Forum.

There is no such thing as Judgment proof. You may be collection proof but a Judgment is a messy thing. You should attempt to fight and hold off all suits the best you can. Always respond, do not let them get a default. Also a lien against whatever future property you may get can occur. Not nice and a lot of trouble. You just don't want a Judgment. Plain and simple.

Next, what are your collection assets you mentioned? Best to get those as soon as possible. However if you intend to bk7 they may become an asset. BK Chapter 7 is total liquidation.

As far as you 10 year laws I am not up on SC but in FL it is 20. Renewable to that point. Never state you have a probable inheritance as you do not know that as fact. It could hold your bk open for a very long time. Only God knows until that happens.

Best advice for a C7 is total honesty, tell only what is asked, never lie, never speculate that you will have something in the future as this may not be true but could muddle your fuddle.

So just my two cents. 'Hub

[dem]

Well, I am not 100% positive I will receive assets from an inheritance but I would call it likely. Like I said no time soon, just at some point in the future, really thinking 10 to 20 years or more on that. As far as a default judgement, I really have no option. I owe the money, and have no way of paying. I have ignored all attemps by the cc company, collectors to contact me. I dont want a judgement, but it looks inevitable. If I do find employment anytime soon, it'll be enough to pay my living expenses amd not much more. I am certain I am collection proof, as I have nothing for a creditor to take, no house, cars, minimal bank account etc. No wage garnishment in SC, and judgements here are not renewable after 10 years. So why declare bankruptcy, why not to?

[ValleYum]

If you are worried about exempting your collections, you should be worried that a creditor could find out about them and attach them, too.

If you do decide to file bankruptcy, you can use the Federal BK exemption set in South Carolina. You can use (as a single person who is not trying to cover equity in a home) up to $10,825 of the unused homestead exemption amount for any property and $1,150 as a Wild-Card. This is a total of almost 12k that could cover your collections.

The above is in addition to the other exemptions provided by the Federal BK exemption set - like clothing, appliances, books, furnishings, household goods, musical instruments to $550 per item up to a total of $11,525 and jewelry up to a total of $1,450.

The inheritance issue only comes into play in bankruptcy if you inherit within 180 days of filing.

Have you taken advantage of attorneys that offer a free BK consultation in your area in order to scope out your situation?

Good luck!

[dem]

Well by collections I am talking about a couple of watches, some coins, antigue guns, things of this nature. Totaled up with other belongings they are well over $12,000, they have sentimental value. These are household items and a collector who sued me would have no way of discovering these. I am not worried about that.

[dem]

Oh about the bk attorney, I did speak to one and they agreed that I did not have to file bankruptcy because I did not have anything to lose. South Carolina has its own exemptions and the wildcard is around $5,000 and for the other catorgories much less that the federal, so I would not be completely covered.

[ValleYum]

You can use the Federal exemptions in South Carolina. Yay! You could be covered with those (if the $$ amount is enough).

Washington is also a state where you can use the Federal exemption set. Lucky us.

ETA: The pricing on collectibles is WAAAAY down due to the economy. Now would be a time to avail yourself of low valuations. Just my 2 cents.

[dem]

No, I have asked and only the state exemptions are now allowed, they may have changed the law from a few years ago, but I asked the attorney about 6 months ago.

[ttg1]

First, no judgment is ever inevitable. Believe it or not your creditors hate court more than you do. If you are willing to do basic legal research you can tie them up in court for years and drive up their costs till they go away. Most CC's have arbitrations clauses and invoking those clauses is enough sometimes to make the creditor head for the hills. Fighting with your creditors is really beyond the scope of this forum but it has been done successfully.

My bigger concern however is the way you talk about time. You sound like you are well before retirement age. So that means sooner or later you are going to have to find work of some type. Mooching off family is not a viable strategy over 10 20 years, not unless they are really rich. So sooner or later you have to move on. I'll repeat what I have said before. Do not underestimate the psychological costs of staying in a dead-end situation. Remember, the #1 comment people make about BK is that they wish they had done it sooner.

[dem]

Yes, I am 35. My family is comfortable, and can likely support me for the time being, but you are right about having to find an alternative. The way I look at it I have 2 choices with the debt situation. 1) Do nothing- get several judgements over the next couple of years and wait out the 10 years until they expire, because of the no garnishment law in SC, me not having any obvious assets and nothing for them to attach, it is not likely I will lose anything from the judgements. But the stress, fear, etc of going through all that will cost me. 2) File bankruptcy- I may lose some personal assets that will not be covered by the exemptions that I will never be able to get back but all the debt will be wiped out. No creditors, no stress, but I am fearful of going through the court system and would rather avoid it altogether. So each option has its pluses and minuses- I'm really torn, what do yall think.

[ttg1]

So each option has its pluses and minuses- I'm really torn, what do yall think.

The decision has to be based upon the totality of the circumstances and you alone know the totality of the circumstances facing you. I will point out this fact: no matter which of the two choices you have outlined you choose you will have to go through the court system. The difference is that in the first case you will go through it passively and in the second case you will go through it actively. But either way you're going through it.

[ValleYum]

I haven't read anything about SC no longer allowing the Federal bankruptcy exemption set.

The states and district which have opted to allow bankruptcy debtors their choice of exemption sets to use are:

Arkansas, Connecticut, District of Columbia (Washington, D.C.), Hawaii, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Washington, and Wisconsin.

Google: States Allowing Federal Bankruptcy Exemptions

Or you can read about it here: http://www.legalconsumer.com/bankrup...=SC#exemptions

ETA: Maybe ask another lawyer or 2.

[dem]

Well their seems to be some confusion on that, some websites list SC, some dont. I asked that question before, but perhaps I was mistaken, I will need to follow up on that. If so, it may nudge me some in the bk direction, but I still have a difficult decision. My those who have filed, how painful is the process. Is it pretty straightforward, or does the trustee scrutinize and question you. I have wondered hypothetically if I didnt tell the trustee about a couple watches, for instance, how would they ever know. Im sure people do this all the time, not saying I would, just wondering how the process works.

[ttg1]

is it pretty straightforward, or does the trustee scrutinize and question you. I have wondered hypothetically if i didnt tell the trustee about a couple watches, for instance, how would they ever know. Im sure people do this all the time, not saying i would, just wondering how the process works.

My opinion about leaving off an asset is simply whether or not it makes a material difference. If the watch is worth $5 no one cares. OTOH, if the watch is worth $5000 and takes you from an no-asset case to an asset case then leaving it off is a major problem.

Don't hide major assets. Don't. do. it. OTOH, as the above poster suggested, you can list the assets and then low-ball the price by looking it up on e-bay or even Craig's List.

At the end of the day the system works off of honesty, recognizing that there is room for reasonable people to disagree. If you list the item at a rational value you are highly unlikely to get challenged on it.

My those who have filed, how painful is the process.

If you (a) play by the rules (b) are honest and (c) document everything then (d) the process is as painless as anything can be in this life. IMO the main cause of people's fear simply stems from ignorance, from fear of the unknown.

[dem]

I have discovered SC has one of the lowest rates of bk filings, and the reason is said to be the no garnishment of paycheck law. Their are 3 or 4 other states with this law, and they are among the lowest as well. Makes sense! If I was faced with finally finding a new job, and 25% of my income being taken away indefinately to pay creditors, bankruptcy would look alot better. But not having to contend with that, you have alot less to lose. I would imagine the CC companies would be less likely to sue in thses states, as that is their #1 way of recovering money, but with my amount of cards and the amount I owe, I know it will be soon. I imigine the creditors have a very small rate of recovery in these states. This right now seems to be the thing holding me back from filing, because I know the cc companies cannot do anything to me.