eelb53 Posted March 23, 2007 Report Share Posted March 23, 2007 I'm 70 years old, retired on social security of around $1400 a month. Around 15 years ago, I defaulted on 4 credit cards with a total of about $40K. I didn't file BK, but moreless ignored the situation. Only one of the creditors filed suit and gained a judgment at the time. The suit was for $8K, and now with interest is up close to $20K. The judgment has just lied there for many years. The other debts have fallin off my credit reports, and I haven't used credit for so many years now, I don't have a file or FICO score.The only executable asset I have is my home. It has been paid for many years, although I am aware that the outstanding judgment acts as a lien against my property. The home is worth about $60K, and I have the state homestead exemption of $15K.In December, I received a summons, and appeared in court for proceedings of reviving the judgment. A law firm has apparantly "purchased" the old judgment and is now pursuing a "sheriff's sale" of my home. I have spoken to an attorney, and he states my only alternative is to file CH 13, and repay the judgment to the bankruptcy court over 5 years. He states under CH7 I would loose the home anyway.Paying this judgment over 5 years is workable, but if I have to dig up the other old timebarred debts and pay them too in BK, it isn't. There is no record of these other debts at this point, at least on the surface. If a BK trustee wanted to snoop around they could probably find them I guess. I don't want to get into areas of fraud by not including the old debts, but I need to eliminate the one with the active judgment. I have not mentioned the other debts to the attorney.If you're thinking of working out a payment plan with the judgment creditor's attorney, they will only accept a lump sum of around $20K. I don't want to loose my home, and I'm looking for alternatives here. Link to comment Share on other sites More sharing options...
Methuss Posted March 23, 2007 Report Share Posted March 23, 2007 Your attorney may be a bit wrong. Get a second opinion. Social Security is off limits to creditors even under Chapter 13. So how would you repay the judgment under the bankruptcy code if that income is off limits? Unless there is some loophole he has discovered, I think you'd get involuntarily converted to chapter 7 upon motion of the judgment creditor.As for the other debts which you were never sued for, you will not have to do anything with those. They are time-barred so those creditors have lost all legal right to collect. Link to comment Share on other sites More sharing options...
bingo Posted March 23, 2007 Report Share Posted March 23, 2007 Social Security is off limits to creditors even under Chapter 13. So how would you repay the judgment under the bankruptcy code if that income is off limits? SS can be used to fund a Chapter 13 plan.Forget about trying to list those ancient debts and concentrate on saving your home. Link to comment Share on other sites More sharing options...
sambabchip1 Posted March 23, 2007 Report Share Posted March 23, 2007 Social Security is off limits to creditors even under Chapter 13. So how would you repay the judgment under the bankruptcy code if that income is off limits? SS can be used to fund a Chapter 13 plan.Forget about trying to list those ancient debts and concentrate on saving your home.Maybe a home load @ 6 or 7 % , and try to get a deal for 1/2 of the 8k. say 4k paid in full.. Link to comment Share on other sites More sharing options...
Methuss Posted March 23, 2007 Report Share Posted March 23, 2007 Maybe a home load @ 6 or 7 % , and try to get a deal for 1/2 of the 8k. say 4k paid in full..Negotiating a settlement for less probably wouldn't work. It's pretty obvious they have already done a title search and credit check and see no loan associated with the property. IOW they know it's paid off. It's a bucket of money in their eyes. And if they know he has a big asset to his name, it's going to be hard to get them to negotiate for less.But that's a good idea. Take out a HELOC at 7% or so, to pay them off. A HELOC payment on $20k should run about $250 a month. Which is a hell of a lot less than what you would pay per month on a chapter 13 plan. Keep in mind...they have a judgment. They don't have to negotiate down (and probably won't). Link to comment Share on other sites More sharing options...
Methuss Posted March 23, 2007 Report Share Posted March 23, 2007 SS can be used to fund a Chapter 13 plan.Um, no. The U.S. Supreme Court ruled last year that you cannot use SS for calculating income in bankruptcy, including chapter 13. If you file chapter 13 and you are only on SS checks, your income is ZERO and will be forced into chapter 7.From the US Bankruptcy Court handbook:1. The "current monthly income" received by the debtor is a defined term in the Bankruptcy Code and means the average monthly income received over the six calendar months before commencement of the bankruptcy case, including regular contributions to household expenses from nondebtors and including income from the debtor's spouse if the petition is a joint petition, but not including social security income or certain payments made because the debtor is the victim of certain crimes. 11 U.S.C. § 101(10A). Link to comment Share on other sites More sharing options...
bingo Posted March 24, 2007 Report Share Posted March 24, 2007 All that means is, SS income is exempt from means testing. It does not mean it can't be used as a source of funds in a Chapter 13. All the code requires for a Chapter 13 {income wise} is a regular source of income. Link to comment Share on other sites More sharing options...
eelb53 Posted March 24, 2007 Author Report Share Posted March 24, 2007 Well, I'm going to roll the dice on the CH 13. I don't see a problem if I'm consenting to use my SS for repayment. My main concern was this old debt that's been off my CR's for years. I don't want to include it, because it would make a 13 unworkable financially for me. But I don't want a trustee resurrecting it from somewhere, and getting me for fraud either. I always read if you don't include all debts in BK, you get into trouble.I'm going to file with just the judgment creditor listed as a debt. I know of no other alternative at this point. Thanks for the help. Link to comment Share on other sites More sharing options...
eelb53 Posted March 24, 2007 Author Report Share Posted March 24, 2007 No offense to the other respondents, but I was kinda hoping the LadynRed would give me an opinion on this. Link to comment Share on other sites More sharing options...
LadynRed Posted March 24, 2007 Report Share Posted March 24, 2007 Well, I hadn't replied because you've already gotten good answers from Bingo and the others Not including debts is not what gets you into trouble with BK Trustees, it's attempting to hide ASSETS that really gets them riled up and people charged with fraud. Since Trustees are there for the CREDITORS and not you, they're after anything that would get your creditors paid at least something.In this case, for such old debts, I don't think you have a thing to worry about - unless you live in OH and even there, anything older than 15 years (the SOL for OH) is time-barred anyway.If you can fund a Ch 13 with your SS income, then at least consult with an attorney. Since a Ch 13 payment is dependent on your disposable income, you may not have to pay back the whole amount. Link to comment Share on other sites More sharing options...
eelb53 Posted March 24, 2007 Author Report Share Posted March 24, 2007 I'm in Illinois, so the SOL is either 5 or 10, depending on who you talk to. At any rate, the other debts are older than that. Link to comment Share on other sites More sharing options...
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