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Everything posted by bw4444

  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. 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: 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'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: 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.
  15. Debt collectors always think you should borrow from someone else to pay them. There are a few things that will guide your decision: Interest rates for judgments are defined by the court. I don't know what they are, but it seems somewhere in the neighborhood of 9%. I'm not sure. Do you really want to transfer an unsecured debt than can be easily discharged in bk to a debt that is nearly impossible to discharge? Do you really want to run up your student loan balance for non-educational expenses? Will this limit future educational options? What will be the effect on your credit report? Will doing this improve your score? If not, no benefit here. Will this reduce your debt load at all? No. So, the only benefit I see is potentially less interest rate. The tradeoff is this debt transfered over to student loan account doesn't have an SOL. Student loans are forever. (Is this correct?) You'll have to make up your own mind, but the benefit to you seems marginal. They cannot force you to take out a loan to pay them. Voice of experience: taking out loans to pay loans seems like a way to solve a problem, but I've found it to be a scam that you run on yourself. This strategy never worked for me in the long run. bw
  16. I'm curious. I've sent out numerous DV letters with limited C&D (you can write, but don't call). I've been sued twice within a few weeks of such letters. One suit was $26K. The other was for $10K. This is an unscientific poll, but I'm wondering who else has been sued after sending DV and for how much? Anyone care to share? I'm wondering if we can collect enough data to ballpark the dollar level at which a DV is suit-sensitive. Thanks, bw
  17. Perhaps the legal minds can verify this, but I had understood that some financial terrorists will still pursue legal action and if so, you need to show up in court and present your affirmative defense--the debt is SOL. End of case. bw
  18. Nah, she wasn't sued. I have been sued, though after DV. Both suits were for way much more than $700. bw
  19. My mother-in-law is 83 and had only one credit card in her life. Something she picked up from Umpqua bank. She never used it. Ever. Well, once, apparently. She apparently bought something at a store with the card for about $75 and promptly forgot about the whole thing. She never uses a card and is 83! Well, time goes by and lo and behold, she's getting calls from Elan Financial about this charge. (I can't tell if they're a bank or a CA.) My MIL never saw the statement and requested they send her a statment. She told them she never remembered making any kind of purchase. The Elan folks harassed her on the phone DAILY and did not send her a statement. She spent months going around with these people and then talked with Umpqua bank. Apparently Umpqua signed up a bunch of people for visas and sold the whole thing to Elan Financial. My MIL went back to the Umpqua folks and asked for help figuring this out. After many months, the Umpqua people eventually got a statment of account from the Elan people. My MIL paid the $75 plus some interest, but considered all the other late and over-limit fees ridiculous & wouldn't pay them. Well, get this. Here is financial terrorism at work. During all the months dragging by she's hit with a $39 late fee every month. With a $500 credit limit and 29.9% interest, it doesn't take long to exceed the credit limit, so $39 over-limit fees apply. She refused to pay any more than she did. Meanwhile, the snowball is getting bigger and bigger. Elan finally charged it off and sold it to one of Satan's own, who called and harassed my MIL daily. When I finally got involved, the original debt plus some interest had been paid, but now this $700 piece of goo with her name on it is floating out there. I had her DV with C&D and so far, she hasn't heard anything. I told her that sometimes collectors turn right around and sue when they get these (happened to me twice), but so far, so good. Nevertheless, this isn't over. This $700 is all penalties and interest on those penalties. None of this is money lent by the bank. This is all fake debt. Hey, I just wanted to rant. Not sure if there's much else to be done. Probably try to settle with the next son of Satan that comes along. Thanks for letting me rant. bw
  20. That "person" is a financial terrorist. There are so many of them--heartless, soul-less people who would steal from their own mother. You don't know when you might cross paths with people like this. Pays to be careful in how you do things from now on. Protect yourself and your assets. I just don't talk with collectors. There's no point. bw
  21. You bring up a good point. I'm certainly not advocating throwing out the intellectual property laws. So I see what you mean. However, we aren't talking about KFC or Coke. We are talking about a system of scoring people that is used to judge the credit-worthiness, job-worthiness, and renter-worthiness of everyone. You cannot opt out of this system. You are expected to perform well in this system and are given general rules of behavior, but you are not told how the system really works. You cannot determine with any reasonable accuracy how any one action is going to affect your score--should you get auto loan A or auto loan B, for example? Which will affect your score the most? Everyone has bought into this credit scoring system and everyone from Suze on down is chanting "it is good for you, it is good for you, go along with it". [Rant mode: off] I see your point as a significant challenge to dealing with this issue. I'll think about it some more. bw
  22. Thanks for the link DocDon. To quote from the BK Basics brochure: So, they are principally looking after the UNSECURED creditors.
  23. Correct. I'm involved in a squabble over home value and the trustee sent a realtor out. The guy spent about 5 minutes looking around and then went back and gave the trustee a very high number. Just got the letter from the trustee indicating he either wants the house or suggests I get a refi and pay him cash for whatever interest (unspecified) he seems to have in the house. It only feels like extortion. BTW, I used the tax valuation for the house and got beat up over it. My lawyer said that it's been used in the past and can cite a court case that allows this. But the argument from the trustee's view is more focused on FMV, not some notion of what they would have when all costs, exemptions, etc. are subtracted. My head hurts!
  24. Well, I know the simple answer is the creditors. But how does that work? How does a trustee get paid--does the BK court pay them a set fee? Does each creditor sent them money? What is the money trail? What is their relationship with the courts? Does the trustee answer to the BK judge, or is the trustee independent? Is there a good link where this relationship is described? Thanks, bw