Another BK or Walk away Question...

[awwwgeez]

I read Cactus Slim's post but thought I would post my question also. I did read the sticky notes....that's were I saw that one could "walk away."

Would it be better for me to declare ch 7 or walk away? The only thing I have that's worth anything is a 2003 Santa Fe (Hyundai) which I still have a few years left to pay. I think I owe around $10,000 on the car and I'm current on this. I don't own a home, I rent. I've gone through all my savings, my retirement fund, and anything else I had saved while waiting for my SSD. I am now on Medicare and Medicaid for insurance.

My CC charges are about $34,000. I am on Social Security Disability but do work part-time. This job earns me anything from $110 to $200 a month. BTW, I'm in my late 50s and don't see where I'll be able to return to a full time job.

And, you know what put me in this predicament? Bank of America made a mistake on my account when I paid them in full, ($3500) three years ago. It took them almost 2 months to correct their mistake. About 9 months later I received a message on my answering machine that they found the mistake. When I called them back, they refused to send me a letter stating that they had made the mistake. I did save their message on my machine, though. Of course, their mistake was on my CR and my other CCs raised my interest rate to the max and also my monthly amount due. Everything just went south from there.

Last year I did hire a BK lawyer but was only able to pay $300 out of the $1100 that he asked for. You know you're in dire straits when you can't afford BK!

Any advice would be appreciated....Thank you.

[eyeball]

Gee

Sorry that your in so much trouble, it happens I have gone through my live's savings trying to keep things going, but have decide to go BK7. I tried walking away but it doesn't work. The attorneys will file judgment after judgment making your life miserable. I am not an attorney but my opinion is go BK7. Under Bk law I think you can keep your car( don't know for sure in Ny). But I think they can garnish wages in NY. Go BK& the law is there to protect you against the collectors that are like blood suckers.

All the best

Eye

[awwwgeez]

Yes, NY allows a person to keep their car. My SSD cannot be frozen. But since I do have the part-time job, I think that money can be frozen if I add it to my account. The work I do is not paid by the hour but by the line. I'm an independent contractor and am classified as self-employed. I'm not sure if my "paycheck" can be garnished.

In the county I live in there is one lawyer for Legal Aid. He is concentrating on evictions and other such serious problems in my county and an adjoining one, so I cannot go to them for assistance.

Is there a lower limit for garnishments? Since I'm not employed by the company I do work for, can my check be garnished? I hope not as I make about $1100 a month and am finding it hard to live on this amount.

[momof5]

Interesting stuff....

What I see....

BOA caused UD on your other accts.

You are living beyond your means. ($34K in CC)

Add the additional interest and you cannot afford your bills.

Solution.

BK - this gets rid of unsecured debt.

SINCE you don't see getting off disability, you won't need large credit so it is not an issue for you.

You will need to restructure your lifestlye to live on the income you do receive. I know you blame BOA for this, but you were the one who charged $34K on CCs.....

We have all done things that were less than wise. We don't judge you here. We also know that we have to determine what was our own contribution to our situation.

SSD cannot be garnished.

If you are truly and independent contractor and not an employee, they won't be able to garnish that.

WATCH OUT though....they can tie up your bank accts while you prove the money was SSD! That can cause you immeasurable grief!

BK seems to be your solution. You pay your BK atty by NOT paying your other bills.....

[LadynRed]

If you are truly and independent contractor and not an employee, they won't be able to garnish that.

Oh, but they CAN and it's worse than if you were actually on their payroll !! As an IC, your income is considered to be receivables and as receivables and not payroll, they can take it ALL ! They would NOT be limited to the 25% set by Federal law.

The only way to really protect SSD is to keep it ENTIRELY in a separate account and DO NOT co-mingle other funds, that way it's easier to show that ALL the money in that account is exempt.

Find a BK attorney that will accept a payment plan, and most can make suggestions on how to get the money to pay their fee.

[awwwgeez]

Interesting stuff....

You will need to restructure your lifestlye to live on the income you do receive. I know you blame BOA for this, but you were the one who charged $34K on CCs.....

BK seems to be your solution. You pay your BK atty by NOT paying your other bills.....

Hi momof5,

I had stopped using my cards in November, 2005 and started to use checks, cash, or debit card.

I did not have $34k of true debt in November, 2005; this amount reflects all the charges the CCs puts on your bill when you stop paying. I was doing really well...meeting my monthly bills and even paying a bit above the minimum. I remember Sears MasterCard suddenly was charging me $250 and BOA $300 and I just couldn't pay what they wanted and would rack up OTL charges the next time the bill was due... because of the high interest. The CCs just snowballed into debt and it just got worse as time went on.

Boy, have I ever had to restructure my life! It wasn't easy and still at times isn't. But I know what needs to be paid first, and then go from there. Budgets are not always easy to follow, and sometimes I fall off the wagon and then have a stern talk with myself!

I *do* blame BOA for making a huge mistake. I went from a 760 score to the pits in less than a year. I do blame BOA for reporting to the CRA and thus my interest and monthly payments were doubled (remember when this came into law in 01/2006?) on the other CCs. I blame myself for charging a lot of stuff. No one made me charge anything....I alone did this.

[awwwgeez]

If a person makes under a certain amount per year, isn't that amount protected?

[rro]

awwwgeez -

first get rid of the misconception you need to pay an attorney in order to file a ch7, it'll save you a ton of money. If you feel comfortable enough your state should have a website you can download the necessary court documents and file yourself and under the new bankruptcy law, even the filing fees can be waived. If you want a little assistance in filling out the paperwork I would highly recommend bridgeportbankruptcy.com - I can't remember the exact fees they charge but my wife did it a few years back with them and everything was flawless as far as the paperwork goes. You have to file yourself but if I remember correctly they have all the necessary links on their site to help you out. I took her forms and modified them in adobe to meet my own needs and filed this year on my own at zero cost. Even the means test and pre-filing as well as post filing counseling can be found for free on the net. If I can dig up the link of where I took my counseling online I'll post the link, I know they have a simple fee waiver form you can send out that you should certainly qualify with on your income. Also, to answer your last post, you are certainly allowed what's called "exemptions" which include certain amounts of personal items, cash and household goods that the trustee cannot ask you to sell to pay back your creditors. As far as the Sante Fe you own, you can actually have a re-valuation of the vehicle under the ch7 law and may end up paying less than you currently owe due to depreciation. Hope this helps you a bit, been there done that with BOA.

[rro]

awwwgeez -

Here's where I did my counseling at - http://www.startfreshtoday.com/consumers-site/credit-counseling.aspx

They have the waiver mentioned on the homepage about halfway down.

The site I mentioned in the first post above charges $149 to prepare your documents, a far cry from the $1100 your attorney wanted - again, you don't need an attorney at your side in this, they do squat for you at the creditors meeting other than sit there like a toad on a log, which is usually a 5 minute process, otherwise you're basically paying the man over a grand to fill out the paperwork and file...that's it. $6 in postage and you can file yourself, or the gas money in a trip to the courthouse (mine would have cost over the $5.35 postage fee in gas to drive there so I chose to mail my packet in). Good luck in whatever you choose to do.

[LadynRed]

DO NOT take the chance of using some 'document prep' company, you WILL regret it. Filing w/o a lawyer under the new law can get you into a heap of trouble very quickly and if you have NO idea what's on your schedules and WHY, then you will have big problems.

There ARE lawyers who will take payments for their fees, find one. BK lawyers can also suggest ways to 'find' the money to make the payments, ways that won't hurt you in the long run and are not illegal.

If a person makes under a certain amount per year, isn't that amount protected?

Nope. The FEDERAL law says that they cannot garnish if your disposable income is less than 40x the Fed. minimum wages ($5.15). "Disposable" income is gross less mandatory deductions - nothing else.

[rro]

DO NOT take the chance of using some 'document prep' company, you WILL regret it. Filing w/o a lawyer under the new law can get you into a heap of trouble very quickly and if you have NO idea what's on your schedules and WHY, then you will have big problems.

There ARE lawyers who will take payments for their fees, find one. BK lawyers can also suggest ways to 'find' the money to make the payments, ways that won't hurt you in the long run and are not illegal.

Just giving awwwgeez my 2 cents, but unless you have a complicated filing I see no trouble at all with having the docs prepared, or in my case simply doing my own using my state's site that actually has most of the directions very clearly laid out. From what I could see he has a very simple list of debts and his main concern is his SUV which could easily be reaffirmed at likely a lower value than what his outstanding principle is on it currently. I'd advise ANYONE filing to read over their own petition whether they use an attorney or not, a lot of attorney's make more mistakes and tick off the trustee's for not having their stuff together because they do bk's on the side and aren't up to date with everything. The petition isn't written in Greek, anyone with a decent reading/comprehension level should easily understand what's on them and be able to verify everything prior to filing as well as answer any questions from the trustee during the creditors meeting.

[awwwgeez]

Thank you rro and LadynRed...I'm going to look over the forms and see how well I understand chp 7.

Many moons ago I was a property manager. Over the 3 years I was a PM, I brought 13 people to SCC for eviction and won all 13. Several I had their wages garnished and I did this paperwork and brought those forms to our county office building and the Sheriff's office. But now, it is much later in the way of brain age. I have to see how well I understand the BK law.

rro, you have given me hope!

LadynRed....I will take your advice, also as I don't want to screw my BK up! I live in a very small "city" that is comparable to Mayberry and I probably will get help at the desks at the court house or city hall. (if they know how to do it, that is!)

I want to thank both of you for taking the time to answer my question. I really appreciate it! Happy 4th of July!

BTW, rro, I'm a she not a he (hehehe)

[isislc]

These guys are correct but I need to add one more thing that you will need to do before your Bankruptcy can be filed and before it is discharged. You will need a CC or DC to take a class before your Bankruptcy can be filed and then take another one before it can be discharged. Each class costs $50 but you can buy them both in a bundle I believe for $80-90 and they are ONLY offered online.

My fiance just had his Bankruptcy discharged in January and I had to give him my CC to pay for them both. The retainer and bankruptcy fee for the attorney do not include the class fees. These are independent from everything you pay the lawyer in which you yourself are responsible for. Once you take the class you fill in the information for the attorney at the end and then they forward a letter to your attorney, using the info you gave them showing that you completed the first class. The attorney can then proceed from there. Same thing for the discharge, you fill in the info again and another letter off to the attorney. Shortly afterwards you will get your discharge letter.

Just something to keep in mind. Good Luck and make sure you file. All your bills will then be stayed.

[rro]

These guys are correct but I need to add one more thing that you will need to do before your Bankruptcy can be filed and before it is discharged. You will need a CC or DC to take a class before your Bankruptcy can be filed and then take another one before it can be discharged. Each class costs $50 but you can buy them both in a bundle I believe for $80-90 and they are ONLY offered online.

My fiance just had his Bankruptcy discharged in January and I had to give him my CC to pay for them both. The retainer and bankruptcy fee for the attorney do not include the class fees. These are independent from everything you pay the lawyer in which you yourself are responsible for. Once you take the class you fill in the information for the attorney at the end and then they forward a letter to your attorney, using the info you gave them showing that you completed the first class. The attorney can then proceed from there. Same thing for the discharge, you fill in the info again and another letter off to the attorney. Shortly afterwards you will get your discharge letter.

Just something to keep in mind. Good Luck and make sure you file. All your bills will then be stayed.

isislc - I posted a link earlier for awwwgeez where she can take the classes for free as long as her income is below the 150% poverty level which it certainly should be - just in case anyone else reading this skips over the previous posts. If you file Pro Se they simply email you or fax (if you have one) a pdf version of the certificates which you print out and file with the bk court.

[aspidermonkey]

awwwgeez, my two cents are from experience. Walk away, and prep yourself for a small fight. It sounds like you are judgment proof so here is what I did. Get a PO Box as your address and DO NOT use your home address on anything. Apply for 2 or 3 credit cards using this new address, this will get the CRA's to update your address. Once you do this the CA's (if your cards have already forwarded the debt) will start to send you collection letters. DO NOT ignore them, answer with a VOD.

When you get certified mail, DO NOT pick them up. If you get a certified mail at your home, refuse it. If you get served because of a CA, answer the "Complaint" with a VOD:

If the initial communication to the debtor is a summons and complaint, it must comply with 1692g. Thomas v. Simpson & Cybak, 354 F.3d 696 (7th Cir. 2004); Sprouse v. City Credits Co., 126 F.Supp.2d 1083, 1089 n. 8 (S.D.Ohio 2000) (finding that a summons and complaint served in a state court action constitute "initial communications" under the FDCPA); Romea v. Heiberger & Associates, 163 F.3d 111 (2d Cir. 1998) (statutory five-day notice is “communication”); Mendus v. Morgan & Assoc., P.C., 994 P.2d 83 (Okla. App. 1999)(summons is “communication”); contra, Vega v. McKay, 351 F.3d 1334, 1335 (11th Cir. 2003); McKnight v. Benitez, 176 F.Supp.2d 1301, 1306-08 (M.D.Fla.2001) (holding that a summons and complaint do not constitute "initial communications" triggering the debt validation notice

requirements of § 1692g). The requirement in the summons that the defendant answer within 30 days or less will conflict with the validation notice and at least requires the “qualifying language” of Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997).

A creditor CANNOT have your wages garnished unless they have first obtained a judgment against you. By filing BK you are giving the Trustee full control of your life and there is no guarantee that your case would be a no fault/no asset case, especially now with the new laws.

In less than 3 years you can hire a company like Lexington Law to start cleaning your credit or you can work on cleaning it yourself.

[direred]

When you get certified mail, DO NOT pick them up. If you get a certified mail at your home, refuse it. If you get served because of a CA, answer the "Complaint" with a VOD:

This is some of the worst advice I've ever seen. If you refuse it or don't pick it up, you're presumed to know the contents!

[aspidermonkey]

Technicalities, that is what gets your case dismissed, not the facts. Try it, the letter comes back stating it was refused, not admissable in court. What you state is merely hearsay, who will affirm that it was actually you that refused the mail.

[LadynRed]

Asking for validation as a response to a lawsuit is USELESS !!!

If the initial communication to the debtor is a summons and complaint, it must comply with 1692g

Except that, under the updates to the FDCPA, pleadings are NOT considered to be 'communication' and collectors are being advised NOT to put the 30-days to dispute notices in with the summons. A lawsuit is very seldom the 1st communication anyway.