collection proof, being sued in Texas

[lpx]

First off, I'd like to say thanks to everyone who has contributed to this site. I have been coming to this site for a couple of years and reading everyone's stories has been reassuring.

I wanted to contribute to this site by asking a few questions and letting everyone know how the story unfolds from this point on...

My father passed away unexpectedly in 2009 leaving my mom with 300k + in medical bills and credit cards. She tried as best she could to repay all debts for a little over a year before realizing it was impossible.

After consulting a BK attorney in 2010, she realized she was judgment (collection) proof and decided to stop paying. She is in her 60's, retired, with only social security and a small amount left in her IRA. She lives on her homestead with very little possessions.

She was served papers a month ago and is being sued by one of the credit card companies. The Plaintiff's Request for Admissions is a generic form identical to another from this same lawyer in another post.


My first Questions are:

Will it do any good replying to the request with a letter explaining that my mom is judgement proof and has no non exempt assets without admitting or denying any of the requests?

and:

Do I sent a copy of this reply directly to the court? Is there a chance the judge will dismiss the case after seeing there is no way to collect on a judgment?


Thanks

[LadyInTheRed]

Welcome, lpx.

The fact that your mother is not collection proof will not convince the judge to dismiss the case. All the judge cares about is whether your mother owes the debt and has defaulted.

Writing a letter to the creditor saying she is collection proof may have prevented them from filing the lawsuit. But, now that they filed, they will probably take it to judgment.

I doubt the letter will qualify as a response to the request for admissions, but I'm not familiar with the rules of Texas civil procedure.

Why doesn't your mother just file BK and be done with it? Even if she is collection proof, she may still have creditors bothering her for years. A BK discharge gives protection and finality that simply being collection proof does not.

[angel7821]

Also being your mom is in her 60's there are lawyers who will not charge her anything to file her case. At least in my state that is how it is. Do some checking around with lawyers for her and see what you can find. You may be surprised. Good luck to both you and your mom on this matter. At her age she should be allowed to live a peaceful life instead of being hounded by collectors.

[lpx]

Thanks for the replies.

I think she will ultimately file, most of the creditors have stopped contacting her via mail and she only has a cell phone, no home phone anymore so she hasn't really been hounded all that bad. I am also suggesting that she files ch7 just to be done with everything but as she sees it, it's not worth doing right now if creditors cant do anything to her anyway, especially if she incurs any more debt in the next couple of years.

As long as there is no "deadline" to file, I will just keep suggesting that she files as it comes up.

Her biggest concern at this point is making sure she is able to pass on her homestead and whatever retirement savings she has to her kids when she passes away. From what I have read, a judgment lien cannot be placed on exempt property on texas, but I am getting conflicting info on whether or not they can do anything after she dies

[AngelinaCat]

She shouldn't just accept a default judgment, "because they can't get anything". Being in her 60s, she is still young enough that she may wish to purchase something in the future, and the judgment will then attach to it, if she has purchased it in her own name. Of course there are legal steps that the judgment holder must go through in order to do it, but your mother really doesn't want to have that hanging over her head. A judgment can last as long as 10 years--at least here in Florida--and the judgment holder can renew it.

She needs to file and get rid of that albatross.

[LadyInTheRed]

Her biggest concern at this point is making sure she is able to pass on her homestead and whatever retirement savings she has to her kids when she passes away. From what I have read, a judgment lien cannot be placed on exempt property on texas, but I am getting conflicting info on whether or not they can do anything after she dies

She should check with an estate planning lawyer to confirm this, but after some quick research on Texas law, I think that after her death a homestead exemption could only be claimed by a suriving spouse or minor children. http://law.onecle.com/texas/probate/271.00.html

Generally, when a person dies, the creditors get paid before the beneficiaries get anything. Like the law linked above, there are often exceptions to provide for the support of a surviving spouse or dependent children.

[lpx]

Thank you,

That may be enough to convince her to go ahead and file chapter 7 and just move on.


I will keep updating this thread with any new changes to her situation