savageix

Filing BK7 in Jan, how do I prevent garnishment/payment?

Recommended Posts

Hello all,

 

First, let me thank you all for your posts in general, as I've read quite a lot on this forum in the past few days. The attitude of helpfulness and generosity is very apparent, as is the kindness and concern i often see expressed.

 

Without writing a book on my first post, let me explain my situation:

 

We live in the state of Tennessee. My wife and I had a baby girl out of health insurance in November 2013. Tons of medical bills were accumulated, which we haven't been able to pay. I was also unemployed at the time, and had accumulated quite a bit of credit card debt.

 

We also have a house with a mortgage out of state that we are renting out, and I would just LOVE to get rid of.

 

I went to see an attorney about filing for chapter 7 bankruptcy. The attorney recommended that I wait until 90 days after I've used my last credit card to file chapter 7. The last time I used a card was on October 16th, 2015. That puts my filing date in mid January.

 

I am fully aware that I will lose the house out of state, and in fact that is exactly what I want, in addition to wiping out the rest of my debts.

 

Meanwhile, I have a couple of creditors who have opened lawsuits - one against myself, and another against my wife and myself together.

 

The lawsuits were filed by attorneys acting on behalf of the original creditors. The first court date I have is set to December 7th. The other one I haven't yet been served a summons for.

 

My goal is to not have to pay anything to these creditors, and to get the debt discharged along with my bankruptcy when I file in January.

 

I believe at this time the best thing to do is show up to the court date and file a sworn denial for the debt. My plan is that this would stall the attorneys long enough to get me through mid-January, when I will be able to file Chapter 7.

 

Does this sound reasonable? Are there any problems with this strategy? Is it likely to delay them by a month or two and achieve my goal?

 

Let me know if you need further information. I'm not afraid of reading up on civil procedure either, but the document was pretty darn long and I don't know where to start.

 

Thanks!!!

Link to post
Share on other sites

Do the creditors have arbitration clauses in their agreements?  If so, that strategy should cause a considerable amount of delay.

 

http://www.creditinfocenter.com/community/forum/199-arbitration/

 

I will check into that.

 

I'm thinking probably not, since these are for medical bills rather than for credit card debt. One for an ER visit, and the other was an anesthesiologist.

 

Assuming for now that arbitration isn't an option, would making a sworn denial make my situation any worse than it already is?

 

Are there any conditions under which it wouldn't be helpful to do so?

Link to post
Share on other sites
Guest usctrojanalum

ask for an adjournment of the first Court date until after the middle of January. When you get the second Court date, ask for an adjournment again. 

 

If you still have tenants in the out of state property, make sure you are following the LT procedures and giving them enough notice to move out.

Link to post
Share on other sites

ask for an adjournment of the first Court date until after the middle of January. When you get the second Court date, ask for an adjournment again. 

 

If you still have tenants in the out of state property, make sure you are following the LT procedures and giving them enough notice to move out.

 

Is an adjournment the same thing as a continuance? Do I need to file a motion for that, or just ask the judge at the court date? Edit: Seems like a continuance and an adjournment are essentially the same thing. One is requested by the judge, the other is requested by the plaintiff/defendant.

 

Thanks for the reminder on the tenants. Probably would be a good idea to do that. I've got a management company that I'll need to inform as well, but i just wanted to make sure that I wasn't going to be leaving them with a negative balance. I'd prefer not to stiff them if I can avoid it.

 

So would asking for an adjuournment (continuance?? lol) be a safer bet than a sworn denial? I did read the sworn denial form that the state of Tennessee puts on their site. It looks like you're swearing under penalty of perjury to the best of your knowledge.

 

Both legally and ethically, it seems like filing a sworn denial for a debt that to the best of my knowledge is mine (99.9% sure here, haha) and is from the original creditor may not be proper. But, I don't know if there are any legal consequences or ramifications to doing so, other than what would happen anyway of a judgement in favor of the plaintiff.

 

So if a continuance is a safer legal strategy (not to mention ethically more sound), that may be an even better idea, right?

  • Like 1
Link to post
Share on other sites

I'm not an attorney. That said, I believe that the moment the bankruptcy is filed any "actions" against you would come to a grinding halt. Further, if your first court date is in December I can't see any garnishment being started before you file for BK in January.  I suppose what I'm saying is that I don't think you have to worry about garnishments, etc. before you file.

 

If I'm wrong; I think you could file BK earlier if need be (it might not be "ideal" but I think it could be done without having that much of an ill effect on your BK petition).

 

I would do what I could to "slow down" any court proceedings but other than that I suspect you'll this will work out for you.

 

It sounds like what caused your financial problems are behind you, that said, keep in mind that BK, at best, only removes your debt...you have to make sure you understand AND address what put you in this position in the first place (i.e. BK can't fix a low income or a lack of health insurance) or it will be a short-lived victory. I'm not trying be negative toward your situation; just offering a word of caution. I do wish you well!

Link to post
Share on other sites

I would just file a general denial.  Even if you went to court in December, and lost, got a judgement against you, they will not do a garnish by mid January.  It usually takes them at least 6 months, if they are aggressive.

 

That's very refreshing to hear, thank you. I was not aware that there was a general denial. I'll do some research on that, but is the process similar?

 

I'm not an attorney. That said, I believe that the moment the bankruptcy is filed any "actions" against you would come to a grinding halt. Further, if your first court date is in December I can't see any garnishment being started before you file for BK in January.  I suppose what I'm saying is that I don't think you have to worry about garnishments, etc. before you file.

 

If I'm wrong; I think you could file BK earlier if need be (it might not be "ideal" but I think it could be done without having that much of an ill effect on your BK petition).

 

I would do what I could to "slow down" any court proceedings but other than that I suspect you'll this will work out for you.

 

It sounds like what caused your financial problems are behind you, that said, keep in mind that BK, at best, only removes your debt...you have to make sure you understand AND address what put you in this position in the first place (i.e. BK can't fix a low income or a lack of health insurance) or it will be a short-lived victory. I'm not trying be negative toward your situation; just offering a word of caution. I do wish you well!

 

Thank you Robert, I am glad that your comments are in line with Shellieh98's. Great minds think alike, right?

 

Also, in terms of financial responsibility, I completely agree with you. I wish that I could afford health insurance for my family, but the Affordable Care Act has not had the effect it was intended to have -- at least, not in my family's case. It is unfortunately much more affordable to pay the penalty and hope that we can pay any health care expenses out of pocket.

 

Our real problem was that we didn't have a very good plan in place to pay for medical expenses associated with my daughter's birth. Now she is pregnant with our third child, and we have a much better idea of what we are getting into. Also, we are very confident we'll be able to afford the expenses because we have some options that weren't previously available to us.

 

Before these issues we had, we were actually very financially responsible. I had excellent credit (still have decent credit) and I prided myself on making sure that we always had positive cash flow. We rarely used credit cards, and when we did we truly did pay them off every month to avoid interest charges. I don't like the idea of filing BK7, but it seems like the sanest option for us at this point.

 

Without the debt, my income exceeds our monthly expenses by nearly a thousand dollars a month, which I am quite comfortable with. However, with the debt servicing payments, we've been a lot closer to financial "red line". I'm confident that the BK is very likely to be the best solution, since we have a source of income again.

 

I suppose the only concern that I have is the possibility of losing my job in the next economic downturn. But I know that I am not the only person that has that concern about their job. There are other steps I am taking to keep my earning ability and my savings secure. 

 

Anyhow, I'm very grateful for the concern :-).

 

So then my next step will be to file a general denial in court on my court date of December 7th, and to file the BK7 after mid January.

 

Sound about right?

Link to post
Share on other sites

Just wanted to post an update on what happened:

 

My court date was December 7th, so just two days ago.

 

Prior to that I researched the civil procedure for denials as well as the discovery process.

 

Tennessee's civil procedure says:

 

If the party is without knowledge or information sufficient to form a belief as to the truth of an averment, he or she shall so state and this will have the effect of a denial.

 

 

 

So with that in mind, I simply made a general denial statement with the docket number and stated "I am without sufficient knowledge to form a belief as to the truth of the complaint below" and then put the complaint and amount below.

 

I thought I would have to bring that before a judge, but instead I had an opportunity to talk to the attorney that was representing the original creditor.

 

She said that she would send me all of the relevant original documents, and reset the court date to February 8th, which is exactly what I wanted!

 

 

Meanwhile, I just called the courthouse regarding the other case that had been pending against me, and there is no court date at this time since they have been unable to serve me as of yet. I know that won't last forever and they may perform an alternative means of service, but at least I have been able to stall the proceedings thus far :)

 

Thanks to all above for your help!

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.