Would you file if you were judgement proof?

[basketsbears]

Hi,

The attorneys have said one of our options is to "do nothing". The main reason we are filing is because of a foreclosure on my husband's old home which has been a rental. BOA has sent notice to foreclose.

My husband's income cannot be garnished, his name is not on our primary residence and my name is not on any of it. It appears (according to attorneys) we are on the "bubble" of a Ch 7. If we cannot get a 7, what is your all's opinion of a 13? We are already in a debt repayment plan, but as of today will miss our first payment to that in over 2 years. In that contract we would be done in 3 years, and can miss 3 payments before the program would end. If we ended up in a 13, one attorney said she thought we could be a 3 year payback as she felt we would not have to include my husband's VA income which puts us below the income for the means test (I thought VA had to be included?). I know an advantage would be that we could "cram down" our vehicle. We do not have a 2nd mortgage, nor do we have any late payments.

So, other than the foreclosure, I am not sure I see an advantage of us doing a 13? Any advice?

[helpmeout]

To be honest, I would go over the Chapter 13 board, I remember reading something about the 3 year plan no longer being an option.

As for being judgement proof. You are not judgement proof, what you are is collection proof. As long as you don't put your funds into the same bank account as husband, that is.

To be honest, the foreclosure is going to happen regardless of whether you file for BK or not. BK will just delay it. All a BK means is that the creditors can't come after you.

[basketsbears]

Hi, Thanks! I will copy this over to Ch 13 board.

[basketsbears]

Would you file if you were judgement/collection proof? x-post

Hi,

The attorneys have said one of our options is to "do nothing". The main reason we are filing is because of a foreclosure on my husband's old home which has been a rental. BOA has sent notice to foreclose.

My husband's income cannot be garnished, his name is not on our primary residence and my name is not on any of it. It appears (according to attorneys) we are on the "bubble" of a Ch 7. If we cannot get a 7, what is your all's opinion of a 13? We are already in a debt repayment plan, but as of today will miss our first payment to that in over 2 years. In that contract we would be done in 3 years, and can miss 3 payments before the program would end. If we ended up in a 13, one attorney said she thought we could be a 3 year payback as she felt we would not have to include my husband's VA income which puts us below the income for the means test (I thought VA had to be included?). I know an advantage would be that we could "cram down" our vehicle. We do not have a 2nd mortgage, nor do we have any late payments.

So, other than the foreclosure, I am not sure I see an advantage of us doing a 13? Any advice?

[kornellred]

When a creditor obtains a judgment against a debtor, they will never stop trying to obtain satisfaction of the judgment. Judgments typically have very long term validity, and renewal is practically guaranteed. Bankruptcy is the only way to stop the madness.

[basketsbears]

Thank you. That's what I thought. I guess we are in it for the long haul one way or another.

[HHM]

It's not really "option" it is a choice. An options implies that some sort of positive change will occur, that is NOT the case with doing nothing. Bankruptcy is an "option" because it will improve your circumstances, but you don't have to do anything, just like you don't have to work, bath, etc., it is a choice.

What most people fail to realize the "lifestyle" being "judgement proof" actually entails. They CAN get judgments against you, the more apt term is collection proof. Here is the rub, (1) your credit never rebuilds, (2) collection efforts don't stop and (3) do you really want to be collection proof for the foreseeable future, all to avoid a BK which better for you long term then doing what you are doing now. (4) it is actually a lot of work to be collection proof, to "truly" be collection proof, you eventually move to using cash cards or cash (since bank accounts are never safe, in any state) and you cannot own anything of value, again, is that what you really want long term.

[note, I merged your 2 threads, you only need to post a question ONCE, in one of the Forums, thank you]

[DYLAN150]

I was told V.A. funds had to be included. You might want to research this.

[basketsbears]

Thanks again! HHM I appreciate your input. That's what I thought too that it is to our benefit either way, but wanted to see what people who are further along could tell me.


Dylan I think I meant they cannot be garnished.

Thanks!

[BKAttyMI]

Ditto what HHM has stated. Do you really want to be "collection proof" forever? For an 80 year old with no assets, I might say go for it, but for someone younger, families, etc. it would be very difficult to remain this way. Your credit would never rebuild and you would never be able to save up or purchase anything of value, lest it be seized because of the judgments that would rack up against you while you were busy being "collection proof". For some people, doing this might make sense, for others, it would be a terrible way to exist. The laws give you a "bail out", use it to your benefit, that's what it's there for.

As to 13s, it seems many people fear them like the plague. While some people make silly decisions going into their 13s (keeping a house they are behind on and really can't afford anyways, which makes their payments high, etc.), if you choose wisely with your head (not your heart), many people find 13s to be a lifesaver. They can lower car payments, lower credit card payments, cram down vehicles, etc. If your payment is "too high", it's important to discuss with your attorney why it is the amount it is and what could be done to lower it, if necessary.

[tobee43]

I was told V.A. funds had to be included. You might want to research this.

i think it may vary on where you are with respect to which income is protected by the ss act. interesting enough unemployment insurance was exempt and covered under the act in our county, (as well as one of our pension due to the fact it was police, firemen..etc. )...while the very next county over it was counted as income. in our county as well, the va funds would not be included, however, as you point out, i would research it, as it may or may not be the same where the OP is filing.

[LadyInTheRed]

To be honest, I would go over the Chapter 13 board, I remember reading something about the 3 year plan no longer being an option.

If the debtor's income is under median, the plan can be as short as 3 years.

[mountanddo]

If the debtor's income is under median, the plan can be as short as 3 years.

Yes, mine is 36 months with a DMI of $100. Let's hope I get a really good raise at the beginning of year 4!

[basketsbears]

I hope you do too!!!

[flaguy]

"

because of the judgments that would rack up against you while you were busy being "collection proof". For some people, doing this might make sense, for others, it would be a terrible way to exist

so true I am living it