Ahhh... small claims noitce from my credit union.... Help, Help, Help!!!!!!

[aaengel]

I just got a certified letter today that I had to sign for, my credit union wants me in small claims court on Tuesday, March 6.... due to a deficiency balance of $2400+ that I owed on the vehicle I turned back into them....

Anyway, I have very little money at the moment.... I'm getting over $4,000 back from student loan proceeds but want to use that for school and living costs now (if you guys remember my thread from a few weeks ago, I'm not buying a motorcycle now, though I had to spend my tax return money to purchase a vehicle [the one vehicle had a rotting out frame, thus needed to be replaced]....). Anyways, even the new car needs a timing chain... and was going to use some of the student loan stuff for that.

Anyway, what must I do?

Should I take the student loan proceeds and pay off the deficiency balance? Once I get that money, how would the court view it? what should I say to them?

I've been trying to stop using my credit cards, but have used the chase one recently.... thus it would probably be June before I could file....

As for income, I have little coming in over the winter, I fluctuate between $80-$160 a week from one job after taxes, another job I fluctuate between $40-$120 after taxes. My fuel and food expenses are what's killing me... the new car gets about 28-30 mpg and I have to drive almost 60 miles a day (4 days a week at school, and then my one job which is 30 miles away).

Food costs, because I'm out so much, I eat fast food all the time (or cafeteria food at school).... this is usually $7-10 a day (or more depending on the day).

[8forme]

Food costs, because I'm out so much, I eat fast food all the time (or cafeteria food at school).... this is usually $7-10 a day (or more depending on the day).

This means you are spending upwards of $200-$300 a month on eating out, depending on if you count weekends or not. I would invest in a small cooler bag or even a small cooler to keep in the car and bring food with you. If you can't do that then make peanut butter sandwiches, granola bars, protein bars, popcorn, cereal, all of which does not need refrigerated. If you have a cooler/cooler bag then you have tons more possibilities and can even keep cold drinks in it also. I think it is absurd ot be spending that much money on eating out when you can't afford your bills to begin with.

[AngelinaCat]

Are you planning to file?

You don't really ask for help with the summons, but here is what you need to do: Appear in court on the day and time specified in the summons. When asked if you owe this debt, respond, "I neither admit or deny this debt." Stand FIRM on that. Then the judge will set a date for you and the plaintiff's attorney to go to Mediation. Usually this will take place about 20-30 days after your court date. If you are scheduled to be out of town on that date, (legitimate--don't invent something), say so, and the date will be set for a later date, perhaps a month later.

Then you get busy and get your BK ducks in a row, and file. Once you file, and the civil court gets notice of your filing, this civil case will be dismissed.

We had this same situation thanks to 'Hub cosigning a car note for an acquaintance, who later defaulted.

Good wishes to you.

[aaengel]

Ok...

How do I shield my student loan proceeds money? I'll be getting it in check form.... would I just declare it like regular money and have it exempted once I file?

Also, if I do what you say Angelinacat.... what if they have another date in a month, then I still can't file for another 2 months after that second date? I'm thinking June at minimum....

As for the most recently used card, it is a Chase card.... it's only been used for fuel, food, car registration costs, and my insurance down payment ( ).... how should I handle this? I heard Chase in the other thread is basically giving up for the time... should I just file for bankruptcy and hope to not have adversarial proceedings? Or should I just wait the 90? I was hoping to pay them some more for conscience sake, but, now that I have this summons...

[LadyInTheRed]

For info on Michigan Small Claims procedures go to: http://courts.michigan.gov/scao/self...elp.htm#defend

There's nothing about arbitration. That would vary by state.

aaengle, bankruptcy will not help you if you don't learn to live without credit and within your means. You can't afford to eat out. As 8forme points out, there are lots of portable food options.

While most attorneys would recommend you wait 90 days to file, since your charges are not for luxury items and are not cash advances, a credit card company would have to prove you didn't intend to pay the debt at the time you incurred it. They are unlikely to file an AP unless you have charged huge amounts. You need to consult with a bankruptcy attorney or two. They can tell you how to deal with your student loan money.

Definitely do not use student loan money to pay off dischargeable debt. And don't pay anyone "for conscience sake". The credit card companies don't make decisions on how to pursue based on their conscience. Pay them only if it makes sense to. You should get an attorney's advice on that.

[AngelinaCat]

Your account is not going to be garnished immediately, unless they already have a judgment against you. My advice is based on the assumption that your summons is the start of a lawsuit against you for the deficiency on your car note.

From what you wrote, it appears that your local civil court does things in 20 day increments (some courts do 30), since you have a court date of March 6. You MUST appear or the CU WILL get a default judgment against you, and then can start proceedings for garnishment. You want to avoid this. If you follow my advice above, this may stall the court proceedings for 40-60 more days, giving you time to file.

Meanwhile, open up a new checking account somewhere else, and put your student money there. You don't want any of it deposited in your account at this CU where your car loan was, as they can and will 'cross-collateralize' your accounts and snatch that money.

[keepsmiling]

I am willing to bet there is a microwave at the school. That will expand your options. A hearty bowl of soup can be filling and satisfying and cheap.
I also carry a hotpot in my car and a converter. A little creative thinking can save a lot of cash.

With spring coming perhaps you want to rethink the motorcycle. You'd probably get much better mileage. You could start looking for a carpool as well. All the schools have FB pages now and other forms of communication/networking.

[aaengel]

So, if I'm understanding correctly with the bankruptcy laws, if the whole amount charged on a credit card within 90 days is $600 or more, than I must declare that on the form, correct? I was looking at the forms today (just picked them up...).

Here are my concerns.... I got a cash advance on this Chase card on December 23, it posted on the 29th.... since then, I've incurred gas charges, food charges, charges such as paying for registration, tax and title on my new car, etc. Until this point, these charges surely are well over $600...

Thus, should I wait the full 90 days from the last day of card usage? If the 70 day thing for cash advances starts immediately from the day of the cash advance, then I could file for bankruptcy on 3-5-12, one day before the small claims court date, and would be past the 70th day?

Originally, until I got this summons today, I was going to pay the Chase card back somewhat for these charges... but now I'm running scared because of this small claims thing.... But no, the only way I was going o ultimately have enough to repay them, would have been with the student loan proceeds....

Anyways.... if I filed on that Monday, before the court date, how likely would Chase try to get me?

I also want to pay off a small card I have with another credit union so I don't lose my accounts with them... the card is for around $470... and has some cash advances as well.... can I pay that off entirely, and not have to list that? Or will Michigan want to know that I paid them off?

Also, does this infamous 90 day cycle start after making the last payment to the creditor, or does it not matter, as in I could make some payments, while not using the card, and then file after the 90th day without adverse consequences with the bankruptcy court....

Anyway, I'm not going to file a lawsuit with anyone on here.... I need genuine help and cannot afford a lawyer, so please just tell me what to do, besides the other fine comments above??

[keepsmiling]

Didn't we decide that OP was collection proof?

[aaengel]

Am I? Even if my one credit union got a judgment against me, do you think I'm judgment proof?

[keepsmiling]

Nobody is judment proof. You may, however, be collection proof.

A lot depends on your current income. I understand that it is erratic. You'll have to do the math and see. I don't see how loan proceeds could be considered income.

You MUST however, get any money you may have in the CU out NOW. They have a right of "set off"

Google search brought this up:
Michigan, like most other states, follows federal law in determining how much non-exempt income could be garnished. Under federal law, the lesser of the following may be garnished:

A total of 25% of disposable income
The amount by which a debtor’s weekly income exceeds 30 times the minimum wage

[keepsmiling]

It couldn't hurt to schedule a consult for free with a local bk atty. Also try reaching out to Legal Aid or some other pro bono organization.
And start packing a lunch. You need to start thinking like a person on a budget.

[LadyInTheRed]

You have to disclose all of your debts on the BK petition, including the date you incurred them. Is the form you are talking about the statement of financial affairs? It asks about payments of $600 or more you made to any creditor within 90 days before filling, not charges you made. The reason for the question is so that the trustee can decide whether to go after those creditors for return of any preferance payments you made.

With regards to charges you made recently, it is up to a creditor to decide whether to object to the dischargeability of a debt. For cash advances, if the creditor objects to dischargeabilty of cash advances for more than $750 made within 70 days of filing, it will be presumed that you incurred the debt without the intent to pay and the debt is not dischargeable. The same is true of charges to one creditor for luxury goods and services of over $500 within 90 days of filing. If there are cash advances and/or charges that don't fit into those descriptions, the creditor can object but has to prove that you did not intend to pay the debt at the time you incurred it. Because of this burden of proof, they are unlikely to object to dischargeability of a small debt that won't be presumed as being non-dischargeable.

This board can be a lot of help, but cannot take the place of a lawyer. Nobody here, even an attorney, is qualified to just tell you what to do. We do not have all of the facts of your situation. If you are going to file pro se, you will be your own lawyer and need to familiarize yourself with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and the local rules of your court. You should also get a Chap 7 self-help book. The Nolo Press book comes highly recommended. Most bankruptcy lawyers give free consultations. Even if you are going to file yourself, you should go for some free consultations to get your questions answered. You don't need to tell them you are going to file pro se.

If you file the day before the small claims hearing date, you should show up at the hearing with a copy of the BK filing notice.

If you are going to file BK, paying an unsecured creditor is a waste of your money. Expect all of your credit accounts to be closed whether you had a balance at the time of filing or not. If you have a checking or savings account with a credit union that you owe money to, remove your money from the account for the reason AngelinaCat gave.

[aaengel]

You have to disclose all of your debts on the BK petition, including the date you incurred them. Is the form you are talking about the statement of financial affairs? It asks about payments of $600 or more you made to any creditor within 90 days before filling, not charges you made. The reason for the question is so that the trustee can decide whether to go after those creditors for return of any preferance payments you made.

With regards to charges you made recently, it is up to a creditor to decide whether to object to the dischargeability of a debt. For cash advances, if the creditor objects to dischargeabilty of cash advances for more than $750 made within 70 days of filing, it will be presumed that you incurred the debt without the intent to pay and the debt is not dischargeable. The same is true of charges to one creditor for luxury goods and services of over $500 within 90 days of filing. If there are cash advances and/or charges that don't fit into those descriptions, the creditor can object but has to prove that you did not intend to pay the debt at the time you incurred it. Because of this burden of proof, they are unlikely to object to dischargeability of a small debt that won't be presumed as being non-dischargeable.

This board can be a lot of help, but cannot take the place of a lawyer. Nobody here, even an attorney, is qualified to just tell you what to do. We do not have all of the facts of your situation. If you are going to file pro se, you will be your own lawyer and need to familiarize yourself with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and the local rules of your court. You should also get a Chap 7 self-help book. The Nolo Press book comes highly recommended. Most bankruptcy lawyers give free consultations. Even if you are going to file yourself, you should go for some free consultations to get your questions answered. You don't need to tell them you are going to file pro se.

If you file the day before the small claims hearing date, you should show up at the hearing with a copy of the BK filing notice.

If you are going to file BK, paying an unsecured creditor is a waste of your money. Expect all of your credit accounts to be closed whether you had a balance at the time of filing or not. If you have a checking or savings account with a credit union that you owe money to, remove your money from the account for the reason AngelinaCat gave.

Please help me to understand... is it merely for single items over $500 every time, or is it for small things adding up to over $500 over the past 90 days?

[DesdemonaB]

Hi aaengel

I am from MI too so I might be able to help a little here.

Let’s tackle the summons:

Because the total amount is under 3K your CU is suing in small claims, they will not have a lawyer in court, and you must answer the summons in person so you must show or you will have a default judgment for nonappearance.

If you choose to answer the summons and show up at court and you lose the court can order you to pay the judgment in full within 21 days.

In the state of MI if the plaintiff wins a default judgment in small claims they have to wait 21 days to submit writs of garnishment. If the plaintiff does not have your information (employers, banking details etc.) they can subpoena you to go back to court for a discover meeting where you must provide to the court your details and the garnishment can begin.

Michigan allows up to 25% of wages to be garnished, based on the high end of your estimated weekly wages your weekly salary excesses the 30 times the federal minimum wage of 7.25 (217.50) so you are collectable and you could be garnish roughly about 40.00 per week. (This of course is between both jobs, I have a work sheet that can get a better idea how the amount is calculated.)

I don’t know where you live in MI, but Oakland Co has free legal aid at the law library in Pontiac the last two for the month of February are the 16th and 23rd. According to your estimates you can file on 3.5.2012 – that only leaves you 19 days to get your stuff together – suggest you do so.

As for living expenses you do not need someone else tell you what you already know; so I am going to save both our time.