How long can you NOT PAY before you need to file?

[seanp951]

I've stopped paying credit cards and my second mortgage. I'm saving money to pay the lawyer, and to have an emergency fund before I file.

How long can I go before a creditor would sue me? I'm about 2-3 months behind at this point... can I go 6 months or even longer before I shoudl file???

the longer I wait, the more money I can set aside.

[LadyInTheRed]

You can probably go 6 months or longer, but it's hard to say for sure. After you are served with a summons, you will have 30 days to file an answer before a default can be entered. So, you can hold off filing until you are served. Just make sure you have all of your financial records up to date and ready to give to your attorney so that he/she has plenty of time to get your petition prepared.

[keepsmiling]

It depends.
Almost surely 6 months min. They'll try to "work things out" with you first.
Some here have gone much much longer without a lawsuit.
Remember that you can't keep too awfully much cash unless you can exempt it. You'll need records of where it all went.

[mountanddo]

It was 1 year from the time I stopped paying my cards until Capital One served a summons. Since I didn't want a default judgement I filed a week after I received it.

[LadyInTheRed]

Remember that you can't keep too awfully much cash unless you can exempt it. You'll need records of where it all went.

He's probably planning to use California's exemption system 2 which has a wild card of $1,175 plus up to $22,075 of unused homestead exemption.

[signal]

I have not paid on unsecured debt for about 2 years. I have not received any summons. I did hire a BK attorney (paid $2k down), but I have not moved forward with my BK yet. I did give the creditors my BK attorneys phone number, and really have not heard anything.

I wonder if a lot of it has to do with living in Florida. My wife is unemployed (student), I have not opened or used any credit since I stopped paying, so there is no activity on my credit report other than mortgage payments to a severely upside-down house and my 2 cars.

In florida they have less power to come after me, as I am head of household. I wonder if because a) I got a BK lawyer, b) live in florida, c) have an upside-down house with no equity in it........I wonder if all that contributes to them just leaving me alone for now. I don't try to move forward, settle or anything as I don't want to wake a sleeping giant.

Statute of Limitations in Florida is 4 years. Most of my unsecured debt was opened in Lousiana, and that is where most of the debt was actually incurred. Louisiana has a SOL of 3 years. I never heard a clear answer on which SOL applies in this case, but I am going to assume Florida and just hope to wait it out another 2 years.

[BKorbust]

It's been almost 3 years for me. I did retain an attorney some time ago. I have directed all calls to him for a couple of years. I have 2 judgements. Knock on wood so far nobody has tried garnish me (except the iRS) and I haven't been sued since the initial two almost 2 years ago. I don't know if having an attorney has helped or having 90K in tax liens has factored into anyone's decision to come after me. I plan on filing in November. I hope everything stays status quo until then.

[Bell30656]

You have much longer than you think. Filing suit is just the start. I had three civil suits against me by the time I filed. Two by a JDB and one by a local OC. The first filed against me in November 2007, the second February 2008 and the last November 2008. I didn't file until December 2008. The two earlier ones still hadn't made it to court when I filed. Sure, I'd filed some answers, interrogatories and other fun stuff but never made it to judgement.

[my2girls]

Our credit union summoned us after only 2 months, Citi-Financial after 6 months....I guess it just depends. From what I've read credit unions will usually sue quicker. Good Luck.

[treehugger1]

I was sued by 3-4 local creditors immediately upon default. I all but begged them to sue in order to get a wage garnishment and clear all local creditors from my plate. It was another 18-24 months before a national credit card company sued me and got two default judgments. Now, nearly two years later, there has been no attempt to collect on the judgments.

I had one other suit from C1 and this was also covered by garnishment.

I do have accounts sold to JDB's but they have never threatened suit. I would fight them if they sued me now.

I stopped paying 4-5 years ago and most of the remaining $65K of unsecured will be SOL in a year or so. C1 sent me 1099 debt cancellation forms this year for other accounts. They finally threw in the towel.

I had credit union accounts that defaulted. They have never bothered to sue on these debts totaling $13+K.

Your mileage will vary depending upon your location, assets, etc. It can also depend upon your state court costs, access to small claims courts, local arbitration rules, and more.

My experience is that local creditors can usually move quickly, while national unsecured creditors can take six months to several years before any action might be taken.

Save you money and be prepared to file BK.

[bcohen]

If you didn't own a house, I'd say you can probably go years without paying. Maybe even forever! I know that I quit paying all my unsecured debts back in March of 2009, and so far, not a single company has sued. However, I live in a rental apartment, and do not have any vehicles or other major assets titled in my name.

You, on the other hand, own a house, so creditors may be more willing to sue, thinking that they can place a lien on the house after winning a judgement. Now if you plan on letting the house go in foreclosure, then I guess it doesn't matter, but if your plan is to keep the house, then I suggest you file for BK as soon as you receive the first summons. This will likely be a year or more after the date of the first missed payment.

[mountanddo]

If you didn't own a house, I'd say you can probably go years without paying. Maybe even forever!

Not really true. States that have wage garnishments probably sue more quickly than those that don't.

[treehugger1]

You would think that states with wage garnishment would lead to more suits, but I have never seen any evidence suggesting that such is the case. The problem with wage garnishment is that garnishment proceedings vary with state laws. Some states allow a continual garnishment until the judgment is satisfied, other states have limits below the 25% federal garnishment law, and some states have laws that require the judgment creditor to renew the garnishment order every 60 - ? days.

Reviewng records in my own circuit court, I see far more judgments with liens against homes, then judgments that resulted in wage garnishments. I do live in an area that has a 27+% true unemployment rate, so this might also explian the lack of garnishments and suits. It is too difficult to predict why a creditor/JDB would sue.

In addition, the number of bankruptcy filings since 2005 probably does not even come close to the number of folks who walked away from unsecured debt. You would think that given the possibly tens-of-millions of debtors who simply walked away, there would be far more suits. I have not seen any evidence that backs up lawsuits based on any particular reason.

I think you roll the dice and try to make yourself as invisible as possible.

[Floridagail]

I was 18 months behind on capital one, they sued finally. No others sued. My bF also in florida has not paid 21 months so far no action , he has no capital one cards. We read somewhere the big ccs were not sueing just taking writeoffs now. We hope that is the case. We are hanging in there for retirement soon. We still hve not been forclosed on either, 21 months since last pmt on mortgage.

Credit scores fico 699, experian 677, equifax 687, Lost 80K retirement money in 2008 market drop. Hoping to buy a house in my name soon.

[goturtlego]

We stopped paying our Cc's back in 2009 and Nov 2011 was the first time a JDB came after us (dh's was Nov mine was Dec same JDB 2 separate accounts) which we fought ourselves and won.

We are getting ready to file this summer as I don't want to take a chance on others coming after us and we have 1 high balance Acct that has not been sold and it's still with the OC.