bw4444

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About bw4444

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  1. Quick update. In spite of my overly pessimistic view, the IRS did accept my hardship application and intends to release the funds back into my account. I was really up the well-known creek on this one. I just have to pay them monthly, and not a huge amount right now. BTW, this forum ROCKS! Ciao, bw
  2. Between my BK lawyer and Accountant, I lived under a misunderstanding about Fed taxes included in BK. Fed taxes older than 3 years at time of filing can be discharged, but there are lots of rules covering this. Mine were discharged. My unpaid Fed taxes newer than 3 years at time of filing were included in the BK. The IRS filed a claim and I thought everything was OK. I was surprised months later to be getting collection notices from IRS. Since the BK took my house (ouch--what a miscalculation), there was money to pay the taxes, which were accepted as a priority claim--that is, the front of the line. The money was there to pay the taxes. So, after I got the notice, called the accountant and he spoke with the IRS who indicated that they'd wait for the trustee to pay out. Got no more notices or phone calls. 4 months went by and lo, my bank account was hoovered by the IRS. Hundreds in Overdraft and NSF fees started rolling in. Filed hardship forms with the Taxpayer Advocate (TA) to get the money released back to my account (you have 21 days), but haven't heard back in a week since submitting the forms. One week to go before my 21 days are up and then I'm ******.) In talking to TA, it appears IRS won't pursue collections with a BK Trustee. (Well, duh! I wasn't asking that. Only to wait to him to pay out.) Also, why didn't they tell me they really weren't satisfied with waiting for the trustee to pay out? According to the TA, once a collection hold (which they did while waiting for the trustee to pay) is put on your account, they don't talk to you, don't contact you. When the collection hold is off, they shoot, then talk. What's more, if you think that when the trustee finally gets around to paying out that the IRS will be satisfied, you're still missing something. Interest and penalties have been accruing. The BK doesn't stop this. If you owe significant back taxes to the Feds, you might want to think twice about your BK. If you have any assets, better to sell them yourself to pay off your debts--taxes first--than to have the BK court sell them. You wouldn't believe what a huge share of your assets the Trustee gets! Lessons learned: The IRS is just another CA, but with Super Powers. The state revenue dept is just like the IRS, but without all the compassion and they have even more super powers. They don't give a **** about your BK. Your situation is meaningless. They still pursue collections like your BK never happened. Just because the IRS files a BK claim doesn't mean they're going along for the ride. I got suckered by what I was told on the phone. GET IT IN WRITING! Shame on me for not forcing my lawyer and accountant to be really clear about this stuff in the beginning. I had such a hard time getting some kind of expectation about how long it would take to get the trustee to pay out. Let me set it for you: A LONG TIME. Maybe a year, maybe 4 or 5 years. I know someone who just got a payout from a BK filed in 2000! Better to sell stuff, pay back taxes & other people off, wait the required time and then file. Trustee and Trustee's lawyer make a TON off an asset filing. Filing a no-asset BK is much, much simpler. Thanks for letting me rant! bw
  3. Here I am answering my own question. Here is how it works in Michigan, so I assume the mechanics of garnishment vary somewhat from state to state. http://www.courts.michigan.gov/scao/selfhelp/collection/garnishment_help.htm You must wait 21 days after your small claims judgment was signed before you can get a garnishment. There are two types of garnishment: 1) periodic, and 2) non-periodic. A periodic writ of garnishment is used to garnish the defendant's wages, rent payments, land contract payments, or other debt which is paid to the defendant on a periodic basis. A periodic garnishment is valid for up to 91 days or until the judgment, interest, and costs are paid off, whichever occurs first. A non-periodic writ of garnishment is used to garnish the defendant's bank account (except for wages that are deposited in the account) or other property. Once money has been garnished under the non-periodic writ, the writ is no longer valid. If there is a remaining balance on the judgment, you must get another writ to collect more money. An income tax refund garnishment is used to garnish the defendant's Michigan income tax. Once money has been garnished under the income tax refund writ, the writ is no longer valid. If there is a remaining balance on the judgment, you must get another writ to collect more money. There is no authority to garnish federal or city income tax refunds. Fill in the form using the instructions. The garnishee is the person or business who has control or possession of the defendant's money. Once you complete the Request, you must file it with the court that entered your judgment. The filing fee is $15.00. A state by state summary of garnishment laws can be found here: http://www.fair-debt-collection.com/state-garnishment-laws-5.html bw
  4. Does anyone know how garnishment works? I know, someone gets a judgment and takes your money. But, how much money and how often? If your bank account is garnished, can the garnisher take whatever money they want as often as they want up to their authorized limit? Or, are there limits to how often a garnisher can take money from a garnishee's bank account? Is this usually spelled out in the judgment or subsequent court motions? Thanks, bw
  5. I've got a friend in TN who just found all his bank accounts emptied. It appears to be a garnishment resulting from a default judgment earlier this year. He had offered to make payments to the CA, but they refused and got the default judgment. Because he didn't file a response, he received no notice of the judgment or notification of the garnishment. What is my friend's recourse at this point? - File a motion to quash? On what grounds? Worth doing? - File a slow pay motion? To make monthly payments. Do judges generally grant these motions or is my friend facing an up-hill battle? - Open a new bank account? My friend has to pay bills. - Any other forms or motions to file? Please help!!
  6. Great advice!!! Be prepared. Your lawyer will probably give you a 12+ page form to fill out with all this information. If you have questions about any part of the form or how to calculate the various dollar amounts, ask the attorney. Check all your assumptions. Also, don't assume the lawyer is thinking about your case 24x7. You are one of dozens of open cases. Your lawyer thinks about your case while the file is open on their desk. Got questions? Phone the lawyer. Don't assume anything. You are paying for the legal advice, but sometimes you have to work to extract it from them. They've been doing BKs for some time, so they've likely forgetten what it is like to not know what the hell is going on. They typically won't walk you through the whole thing step-by-step unless you ask, prod, and push (nicely, though). Personally, BK is such a drastic thing that I don't think its worth doing for $10K of debt. Make sure you really know what is going on with your debt before filing. Make sure you understand who you owe, how much you owe, and how old the debts are. Read everything you can on this site to get educated. Coming up with some settlement may be less painful. Just my .02. bw
  7. Liens are not automatically dismissed in BK. Extra paperwork is required. It cost me more $$$ to have the attorney take care of this. bw
  8. I wish my Attorney would have told me this. I went with the tax assessment valuation. It got trashed by the trustee who sent his pet realtor out to do a BPO. My house turned out to be worth WAY more than I thought. I lost the house. Our exemption didn't cover the amazing amount of equity the house gained in the last 12 months. The current housing market is really strange right now...it's taken a dive in some parts of the country, while in other parts (like mine) the prices are spiraling upwards at a tremendous pace. Better get a good idea of market value and be prepared to defend your evaluation to the trustee.
  9. Get this. Carl Yastrzemski's son stole his ID and ran up the credit on the elder Yaz. (In case you don't know who Yaz is, ask anyone who has ever been to Boston.) The younger Yaz died from surgery complications and left the elder with loads of problems. Of course, MBNA did its best to understand the situation and slugged it out with former Red Sox slugger and won in arbitration. Ain't arbitration wonderful? I bet the collectors who worked this case felt damned proud of themselves. Here's the link to the CNN article: http://sportsillustrated.cnn.com/2005/baseball/mlb/05/05/bc.bba.yastrzemski.sson.ap/index.html?cnn=yes bw
  10. Yes. I believe a US Trustee contracts with and oversees a number of private trustees. The US Trustee works on salary for the BK court while the private trustee works on contract. Seems I got this info from the US Bankruptcy court website. bw
  11. This thread is a great example of why I like this forum... - Someone floats a problem out there - Lots of people give their varied thoughts on the situation - Enough information is gained to make a good decision I'm not of the rob Peter to pay Paul persuasion, but after reading the various replies, this is one situation in which it would make sense. If you look at the numbers only, it seems a no-brainer. This isn't taking an advance on one high-interest credit card to pay another. There really is a significant advantage here. So, for what it's worth, I vote for using the student loan money to make these people go away. bw
  12. Makes sense to me. Have you ever tried to get out of a gym contract? I have. These are usually 6-mo or 1 year contracts. What this boils down to is that when you sign a gym contract, you essentially create a debt that you pay on for the term of the contract. Someone who owns a string of gyms will naturally fall into the debt collection business. Half the people sign up, go for a couple of months, and then quit. But this contract (debt) is still hanging over them. bw
  13. That was my impression, but I talked with my mother-in-law tonight and since the DV about a month ago, she hasn't heard squat from the CA. However, she is getting statements from Elan Financial. So, it sounds like the debt was assigned, not sold. They keep tacking on more fees. She said the balance is up around $800 now. It grows by about--well, let's see--$39 late + $39 over limit + $20 (29.9% interest ) = ~$100/month. The principal plus some interest was paid off months ago, yet this account grows by $100/month. None of this balance is money loaned--it's all loan-shark fees. One year from now the balance will be over $2000. Sheesh, I'm ranting again. I just can't stand this kind of practice. If you have any kind of account with Elan Financial, I urge you to close it now. bw
  14. Great article! Thanks for the link. While my mother-in-law is not impoverished, she was nevertheless bewildered by the unreasonableness of the banks involved. At least Umpqua eventually produced a statement for her. But all the other fees seemed like simple robbery to her. The $&%^*#& debt collector was only interested in harassing her until she sent a check. I don't think she ever understood the terms and conditions of the credit card agreement or ever understood what all the extra fees were.