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judgement, car, Suppl. Sec. Income.


trainham
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Hello!

 

I am posting here because of the refreshing quality of posts at this forum. 

 

The situation is as following..

 

Everything took place in PA.

 

A Barclay's Bank Delaware credit card account was not paid on for some time.  Eventually a sheriff delivered some papers, and later a judgement was won against me, by default, near the end of 2012.  I did not reply to anyone during the whole process.  The plaintiff is Barclay's.

 

The account is for about $5,000, with their costs of $270.

More papers came by mail in early 2013, about the creditor garnishing 2 of my bank accounts, which had already been closed.  The papers list their costs for this at $300.

 

 

My situation is that my only income is Supplemental Security Income, and State Supplement, which are exempt and protected from garnishment.  I own no land, vehicles, or any other property.  I currently have 2 new bank accounts with $26 from SSI funds, and have not received any garnish papers for these accounts.

 

I am wanting to have the judgement disappear/closed/resolved/ended because -

(1) I may receive a gift of a car in the near future, and realize that it can legally be seized by the creditor if it is in my ownership.  Though I have read that creditors rarely or never do this.  The used car could be worth $13,000 in market value.  It could be held in the ownership of the person gifting it, but it would be preferable to be able to own it myself freely and without worry.

(2) For my credit report. I understand that if the judgement is renewed, then it would show up fresh and will be there for another 7 years. Resolving it will allow it to disappear by 2019, and show as resolved until it disappears.

(3) For peace of mind, to feel free and clear, and to have closure on that part of the past.

 

 

I am looking for advice on what to say in a letter, in order to resolve and clear the judgement.  The amount of money I can offer is very limited, but I am thinking $200-300 may be worth it to the creditor if he learns that I have no garnishable income or assets, no seizable property, and live off of SSI.   

 

I thought it would be as easy as offering an amount of money, reaching an agreement, and then the judgement would be ended.  Then I read about 1099-c, and taxes.  And "satisfied" "vacated" "settled".  I don't understand these terms, don't know what exact words to use or not use, and I can't afford a lawyer. 

I simply want a clear and simple way to have

1. any future car be safe from seizure,

2. have the judgement be unable to be renewed, and

3. have the credit reports update the status of the judgement to something more preferable, if possible.

 

Is this something I can do by myself without the help of a professional?

 

-trainham

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1)  When creditors rarely go through the trouble to seize a vehicle is if it is financed or the value does not exceed the state exemption and the amount of the judgment.  Most of these cars are auctioned at a fraction of their value if they are free and clear of any other liens.

 

The problem you are going to have is that the value of the vehicle you receive could potentially be very worthwhile to seize and sell since it could possibly cover the costs involved and a large chunk if not all of the judgment.

 

2) The only way you will have the judgment be unable to be renewed is to satisfy it or get it vacated.  I do not see a basis to have it vacated since it appears you were properly served and chose not to defend the case.  At this point it is highly unlikely you can get it re-opened now.

 

3)  A judgment worth thousands that can be renewed is probably not going to be settled for $300.  All you can do is make an offer and see if they bite.  

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Hi, and thank you for some insight.

1) So the high value is the issue with the car.

If it is financed, would the creditor simply wait till it was paid off, and then seize it afterwards?

Is there a general highest value that a paid-off car can be and be safe from being seized?

 

The maximum exemption for a personal vehicle is $2775 in PA.  That means if you have a car worth $13k and they sell it at auction for $6000 the first $2775 must go to you as part of the exemption.  The rest can be applied to the debt.  

 

If the car has significant value then creditor might wait for it to be clear of liens to seize it.  

 

Also, what if the car was bought full in cash?

That might leave no trace of the car on whatever search methods the creditor would use. A fully cash paid car, paid by someone else, would not show up on my credit or financial activity. Only my name on the title and insurance could maybe be tracked and found. Or they could have someone drive to my home, see 2 cars for 2 people and guess one was owned by me. I don't know what methods they use to find cars.

It may be easiest to simply have the gifter retain ownership of the car, and I just have the use of it.

 

How the car is paid for is not the issue.  The car is an asset.  Even though you are on disability the creditor can haul you into court for a debtor's exam where you have to disclose all personal assets.  You would have to disclose that you own the car or be in contempt of court.

 

Leaving the car in someone else's name is VERY high risk for both of you.  It leaves you both vulnerable to lawsuits in the case of an accident and I do not recommend doing that.

 

3) My thinking was guessing that it will cost the creditor money to continue to keep my account open and search for seizable assets, and it will cost money to renew the judgement. If it costs them $x per year and $x to renew, then I'd guess they have some statistics and accounting guidelines on when to continue paying those costs to hold out for the full amount, versus when to accept or welcome a partial amount to close the case.

My situation might be one that they would welcome closing for a sure immediate small payment, versus holding out.

I can state in writing that all of my assets are from SSI and are exempt; I have no hidden or unfound assets that can be taken; no amount of searching will find any.

I can include an official letter from SSI proving that I am on SSI, and let them know that SSI is my only source of income.

 

It costs the creditor NOTHING to keep your account open.  You are thinking this all wrong.  The costs of searching for assets get passed on to you.  That is the pitfall of a judgment.  Post judgment interest and collection costs are paid by the debtor not the creditor.  They are perfectly happy to add it to what you owe them.

 

Also, it does not cost them per year to renew.  The first judgment is good for 10 years and they only need to renew it once and revive it for another 10 years which many creditors due around year nine.  The cost of that also gets tacked on to your balance.

 

The creditor will NOT care what you state in writing to them.  They hear stories and tales of woe hundreds of times per hour and yours will be no different to them as someone who simply won't pay.

 

In fact my best guess is that when you send that letter they will assume you are about to come into money or property that would be worth their while NOT to negotiate with you.  Most people on SSI who are collection proof simply ignore the creditor knowing they can't take anything.  Someone trying to settle is looking to purchase property or needs credit and that gives the creditor leverage and they know it.

 

After knowing my situation, I can't imagine the creditor would pay the costs to try to garnish any more bank accounts. And the possibility of future non-SSI assets, or an eventual land, house, or car ownership, would likely look fairly unlikely to occur.  It would seem that seizing assets would not be an option, and settling with me is the only way the creditor can receive any amount. So the creditor might welcome the sure and immediate funds from an immediate settlement, even if it's for less than the entire amount amount.

So, if I mentioned these things, what is a reasonable figure that the creditor might find acceptable?

 

While they might not garnish anymore bank accounts it does not mean they will be willing to settle either.  Some creditors have a rigid policy of not settling for anything less that what they are owed.  Settling accounts is about leverage.  The party with the most leverage has the negotiating power.  Right now you have a little leverage in that you are on SSI which cannot be garnished however, that doesn't mean the creditor will just cave and settle for next to nothing knowing they can jack your credit for almost two decades.

 

Without knowing how much you owe or who the creditor is there is absolutely NO way to predict how much or even IF they will settle. 

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I would recommend having the car legally owned by someone else, while you drive it.  As long as you are insured, there should be no problems.  In the business realm, lots of people drive vehicles they don't own.

 

That may help with SSI matters, as well.  While I think one car is exempt when counting assets of a SSI recipient, you never know when their rules may change and having a car worth $13K won't be allowed.

 

Check out http://jjluna.com.  JJ Luna wrote the book "How to be Invisible" and recomends titling cars and real estate in LLCs for privacy and asset protection.   That approach is too rich for me, but some of the issues (discussed in the Questions and Comments section) about getting insurance with a car owned by another entity may apply.

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