Pennsylvania : Need Advice To file BK ??

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Hi -

New here. I will sum up my situation and any advice appreciated.


I entered a DMP with a consumer credit counseling service to pay off about 60k in Credit Card debt after major life events made it impossible to keep up with payments.  Long story short the monthly payment was too much, so the the DMP was cancelled and all cards were written off as charge offs. 

1. Last payments to most of the CC were through the DMP in June 2015. So most cards officially charged off in Nov or Dec 2015

2. One item not included in DMP was a loan through Prosper. Charged off in 5/2015 14k or so

3. Since 11/2015 just been sitting on everything, took approach to pray no lawsuits etc. and make it to 2022 and have everything fall off CR. Credit already ruined so that was my initial approach. Painful , anxiety producing yes. Collection Letters, calls at all hours. None of which I responded to or do now. 

4. Fast forward. May 2017.   Cach LLC (i have heard all about them) sues me for 14k prosper loan they bought at a JDB . Filed early May. Still have not been served. I learned of suit first via a letter from an attorney advertising their services, so I checked court website, and alas it is there.  Hearing set for early 2018. Obviously when I am served I will file and answer, as to not get a default judgement against me.  I understand that CACH LLC would need to prove standing, chain of command etc. and is a JDB.     In Philadelphia, the case goes directly to Compulsory Arbitration Program All claims less than 50k go to this process:

5. Since my whole strategy to avoid BK and just go the informal BK route, was to pray I wasn't sued, has gone to pot, what do you folks advise I do? I don't want to end up losing to CACH LLC and having a judgement. In PA they can't garnish wages, but can go after bank account. Not that there will be much in there after I am paid monthly it basically is drained to every penny.  But the point is what do you guys advise now?


1. I have absolutely no savings to attempt "settling" other than maybe $500-1000 with CACH, LLC and I am assuming they won't go for this in exchange for deleting tradeline, dismissing with prejudice.  Because without that, what is even the point. So my question is should I file BK now, or wait.  Chap 7 or Chap 13? Or try to fight lawsuit? Not sure what the point of that would be, with all the other debts hanging over my head.

2. I own a paid off car that is a 2011 model kelly blue book 10-12k, minimal other items, and rent. I make just under the median income amount of 51, 138 for chap 7 in PA. I cannot lose my car as I need it for work, so would I have to go Ch 13? I know my car is over the "exemption" amount so how would that work?

3. I have very little disposable income, after rent, normal utilities, and about a $250 payment per month to IRS on installment plan which I have a few more years on.  

4. One last question. What happens if I file BK to the lease and the apt I am renting.  I have never been late on rent and have been here 5 years. Would it be best to tell landlord before filing (if I file) and ask them what they would do? Do they have to kick me out if I file? I do not owe them anything, nor am I late on any utility, etc. It is just the consumer items listed above.

5. And if filing,  should I get an attorney and what would that cost to file in general?


Any helpful advice would be much appreciated.




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I am going to go by your facts to answer your questions:

1) Deciding when to pull the trigger is up to you. You can wait and see if they serve you and try to get together more money to offer as settlement but I bet the others are getting ready to sue you too. You can also try to fight knowing that you have the BK trump card should you lose. Fighting and winning against one JDB may make the others think twice (or not).

2) Is that value for the car private sale value, retail sale value (what a dealer would get), or auction value. I would use auction value (and in fact, for any asset, use auction or garage sale value to determine value because that is what the estate would get). I have a feeling that your 2011 car auction value is less than the 10k - 12k you got from KBB. You can use the orange books at the library to determine auction value. Just make copies to show the trustee. More likely, the value of the car at auction is $8k. As for exemptions, PA allows you to use the Federal exemptions which might be your saving grace. By using the federal exemptions, you would use the regular auto exemption to exempt $3775 of the cars value. However, because you do not own any property, there is a wildcard exemption that includes part of the homestead exemption making your wild card exemption total to amount to $13,100. In this case, if the car is really worth $12,000, you subtract $3775 from that for the auto exemption leaving $8225. You then use the wildcard exemption on the rest of the value. That would still leave you an exemption of $4825 for other stuff such as wages accrued. If we use my $8k figure, then the same concept would apply but you would have more of the wild card for other stuff that would otherwise not be exempt. In fact, unless you own a ton of furniture or other stuff, or have non-retirement investment accounts which I doubt, a Chapter 7 would probably work for you. If you cannot exempt the full car and the trustee decides to take it, then they have to sell the car at auction value, pay for the repo and auction stuff, pay you the exemption amount ($3775), and then anything left would go to your creditors. In fact, I would doubt that when all is said and done, the trustee would get more than $2000 for the creditors.

3) Under Chapter 7, disposable income does not matter. As for the IRS, if that debt is more than 3 years old, it might be included in the BK.

4) The lease can be ended by the trustee but most trustees will not do that because it would be easier for you to stay in your apartment. You can notify your landlord but as long as you pay the rent and follow the lease, it really does not matter. Some states may also protect you from being evicted for simply filing BK. When I did a chapter 7 BK in 2005, I simply paid my rent and the landlord renewed my lease when it came up because it is easier to keep a known good tenant than to roll the dice on an unknown new tenant.

5) With the IRS debt and the issues with exemptions, I would suggest saving up and paying a lawyer. It would cost about $2000 - $3000. This figure includes the court fees but not the mandatory classes. Also, filing pro se is very difficult and if you make a mistake it can cost you. I did a BK pro se and trust me, I would not recommend it to anyone.

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Thanks so much for your insight. I will totally check the orange books, because yes I was using what would be trade-in value, not auction value. So that makes sense.

And yes outside of my 401 (K) I don't really have any other assets. Just normal household items, nothing fancy.  How do you go about valuing those things?  Does the lawyer do that for you (in other words I would list the item and they assess the value?) 

Yes one of the things I really worry about is staying in my housing, I agree I would think landlord would very much like to keep me here as I am a long standing tenant. And with where my credit is now, trying to rent something after the BK would be tough if I was forced to move.  I also wasn't sure how to value my 10 year old couch, bed, etc. but I guess hiring a lawyer helps you with all that?

Wow, impressed you did pro se, yes I would probably have a heart attack trying to do that.  Thanks again for your insight.



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For furniture, cloths, and stuff like that, your best bet is to consider how much you can value it if you were to sell it in a garage sale. You can also check out the local salvation army or goodwill to determine value. The trustee knows that in a forced sale situation, that is what they would get for your items unless it is something fancy. As for the 401k, that is totally exempt under the federal law so no need to worry about that. The attorney can advise you regarding valuation as they know what the trustees would accept.

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For the account CACH is suing on, is there an arbitration clause in the contract?  If so, the arbitration strategy is an option to make them go away, or to get a favorable settlement.

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Hi-  Well I am not sure if the fact that the case goes to Arbitration Court anyway makes a difference?  

The case goes directly to Compulsory Arbitration Program All claims less than 50k go to this process:

In other words the court date is at the arbitration center. They automatically place the cases here. Is this the same thing as arbitration clause?

What would be the strategy? 

Did anyone else out there have an account with Prosper that CACH LLC ended up buying? What is the arbitration clause/ strategy to deal with being sued for this?

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No, that is not the arbitration I suggested.


What you want is private, contractual arbitration with an arbitration forum such as JAMS or AAA.  Preferably JAMS.  The reason this is favorable to consumers is it is very costly for creditors, including JDBs like CACH, but it is not costly to you.   The most you would have to pay JAMS for a consumer arbitration is $250.  But it would cost CACH thousand of dollars to get an arbitration award they could get confirmed as a judgment.  And they won't pay for arb.  Especially since CACH is in bankruptcy.


What you need to find out is whether there is an arbitration clause in the Prosper contract you entered into.  Again, you want private arbitration, not anything administered by the courts.


If there is an arbitration clause in the Prosper contract, you need to file a Motion to Compel arbitration with the court.  There is great case law, including in the U.S. Supreme Court, favoring arbitration.  So the motion should be granted.  This puts the JDB in a box.  They can't use court anymore, and can only get a judgment by going through a very expensive arbitration forum.   Which they won't do, so they will probably end up dropping the case.


For more information on arbitration, see here:


Also look on



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Thank you I will look into it.  Couple of questions:

1. When I answer after I am served would this include the MTC arbitration right away?

2.I believe there is an arbitration clause :

3. Does it matter that the JDB is the "owner" now of account?  As in I can use the OC when referring to this arbitration clause?


I will read up on the boards, thank you for this information.


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1) You file the MTC right after you file you answer.

2) If that is the agreement that was in force at the time of your loan, then it could be possible.

3) When a JDB purchases an account, they take the place of the OC and are required to follow the contract as if they were the OC, including any terms in the contract which might be beneficial to the debtor. The sale of the account simply changes who fills the shoes, not what their requirements are in regards to filling those shoes.

 Finally, although you are worried getting through to 2022, the biggest worry should be getting to the end of 2019/beginning of 2020 because once you reach that, you cannot be sued anymore for the debts as PA has a 4 year statute of limitation. So in addition to getting the answer and MTC read for this case, I would start to get the agreements together for the other cards just in case they decide to come after you in the next couple of year.

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1 hour ago, WhoCares1000 said:

 Finally, although you are worried getting through to 2022, the biggest worry should be getting to the end of 2019/beginning of 2020 because once you reach that, you cannot be sued anymore for the debts as PA has a 4 year statute of limitation.

PA does use a 4 year SOL on written contract debts which a loan is definitely one.  In the first post the OP said they defaulted in June 2015 when the debt management company made the last payment.  If that last payment was not the minimum due then the DOFD might actually be in May or even earlier.  I would get hard copies of credit reports and see when the OCs are reporting that DOFD as on all the accounts including the one in the suit.  

If the DOFD is early to mid-2015 then the OP may just be able to ride it out if they get CACH to drop this suit when faced with arb and not have to pull the BK trigger but be ready to if other suits follow or the MTC doesn't work.

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