Kauai1018

What happens when you can’t pay judgement?

30 posts in this topic

My income is $1150 a month in Social Security Disability, I have a condo that is protected under FL homestead which I currently am pulling from my IRA to pay for until I can sell it or will have to stop so I don’t run out of money and let it go back to bank

I have 3 credit cards BBVA Compass $13000, Barclay $7000, 3rd 5th bank $3000 and a $24,000 dental loan with MBT/ Lending club

 I can’t file CH 7 because I would likely have to use Federal law as I have to wait another 18 months before I can use FL law (my inherited IRA is protected from judgements and FL CH) but not Federal CH7.

I am current but now out of money will stop paying so I am sure I will be sued.

Only asset is a 20 year old car maybe worth $3000 which is my only transportation as I live alone. Personal property very little cheap furniture. So what happens when there is no money to freeze in accounts or wages to garnish after a judgement?

So stressed any advice would be appreciated.

 

 

 

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36 minutes ago, Kauai1018 said:

So what happens when there is no money to freeze in accounts or wages to garnish after a judgement?

The only thing I would worry about is the IRA and any equity you may have in your condo.  If you are certain those and all of your other assets are protected from judgment, absolutely nothing.  Judgment creditors are not complete a-holes.  They are far more interested in people with 4 houses and $150,000 in bank accounts to worry about someone scrounging by on $1,000/mo SS payments.

 

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Thank you. What is the best way to handle the situation? Should I write the creditors with my issue or do I need to wait for court?

would they take my car or any house hold items? I am on my own dealing with this and confused 

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Do they come to your house ?  That would be even more humiliating on top of the stress.

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1 hour ago, Kauai1018 said:

Thank you. What is the best way to handle the situation? Should I write the creditors with my issue or do I need to wait for court?

would they take my car or any house hold items? I am on my own dealing with this and confused 

Generally they can put a lean on any second homes you have. They won't get their money until you sell. Retirement accounts are often protected or too much trouble for agencies go to after. Rollover IRA accounts (if you rolled it over from a 401k employer plan) ARE protected. The way it goes is this:

They send you late notices for a few months. Then they file sell your account to a junk debt buyer. Then they send you notices for a few months. This goes on for anywhere from 6 months to 2 years, then they take you to court. If you show up and ask for proof as to how they think you owe the debt sometimes they drop the case, but often they won't. They'll just show up with your paperwork, the judge will say "can you pay" and talk through what you own. Then he'll rule on what you can do. Or you can choose to not show up and the judge will just give them a default win. If you truly have no money or job and don't plan to have until you die, then it may not matter if you let them get a default judgement. You didn't say how disabled you are.

It sounds like, since you're on disability, you may be in the clear. Hopefully you learned a lesson that CASH is KING and NEVER use CREDIT except for your home. Also, pulling from your IRA is a bad idea, since you're hit with penalties and taxes. Sell the house for a lower price and get out from under it if you must, but stay out of that IRA.

One question though, where will you live after you sell the condo? You can't finance another house, you just defaulted on a bunch of debt.

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1 hour ago, Kauai1018 said:

Should I write the creditors with my issue or do I need to wait for court?

It depends on who is trying to collect. If the debt has been sold to Midland, you can send them some financial info and they'll mark your debt uncollectable and that will be the end of it.

1 hour ago, Kauai1018 said:

would they take my car or any house hold items?

No. They have to leave you with a vehicle, unless that vehicle is a Ferrari or something like that. 

1 hour ago, Kauai1018 said:

Do they come to your house ?

Highly unlikely.  Everything is done though the court initially. Unless they have some reason to think you're hiding something, they get their judgment and let it sit collecting interest until you hit the lottery. Since that won't ever happen, you probably won't hear from them again except an occasional reminder letter around tax time. 

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Thanks to you both. Yes, I do learn and won’t get into this mess again. Once I get out of the condo I will move in with family until I can figure a way out. However, sounds like I will need to file ch 7 here in Florida when I can to be able to rebuild. 

I really appreciate the responses and will follow the advise. Thank you.

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5 minutes ago, TenBucksBroke said:

It only stays on your credit for 7-10 years so ch7 isn't necessary unless you plan to have things change radically in the next 7 years.

If you are referring to judgments that is patently false.  A judgment becomes a public record same as a bankruptcy.  It can remain on a credit report a lot longer than 7 years if the judgment is still active in the courts.  Since in many states judgments have a life of 10 or 20 years and can be renewed that judgment can follow someone for a long long time.  Bankruptcy wiping out the debt may be a better option.

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30 minutes ago, Clydesmom said:

If you are referring to judgments that is patently false.  A judgment becomes a public record same as a bankruptcy.  It can remain on a credit report a lot longer than 7 years if the judgment is still active in the courts.  Since in many states judgments have a life of 10 or 20 years and can be renewed that judgment can follow someone for a long long time.  Bankruptcy wiping out the debt may be a better option. 

The judgement can follow you indefinitely, however the reporting to the credit agencies falls off in 7 years. They can still hound you for the money, but if it's not on the report few companies care, with the exception of mortgage companies. They'll usually require you to satisfy any judgements before you buy a house.

To the OP, if you wait until they go to court to sell the condo then they could take any profit you make from the sale as payment for your debt too. Sell it quick to make sure this doesn't happen.

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10 minutes ago, TenBucksBroke said:

The judgement can follow you indefinitely, however the reporting to the credit agencies falls off in 7 years.

NO it does not.  Public records can report for longer than the 7 years.  You are wrong on this one.

 

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6 minutes ago, Clydesmom said:

NO it does not.  Public records can report for longer than the 7 years.  You are wrong on this one.

 

Clydesmom, public records are a separate thing from the credit bureaus. They don't report judgements longer than 7 years. If you think different, please point out where this is happening. I have never seen a judgement posted longer than 7 years.

For my part, here's a Bankrate statement saying it's 7 years on credit reports.

https://www.bankrate.com/finance/credit/judgment-disappear-from-credit.aspx

 

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30 minutes ago, TenBucksBroke said:

Clydesmom, public records are a separate thing from the credit bureaus. They don't report judgements longer than 7 years. If you think different, please point out where this is happening. I have never seen a judgement posted longer than 7 years.

For my part, here's a Bankrate statement saying it's 7 years on credit reports.

https://www.bankrate.com/finance/credit/judgment-disappear-from-credit.aspx

FCRA 1682c says BK cannot report past 10, and civil judgments can't report past 7, unless the "governing statute of limitations" is longer. 

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5 minutes ago, Harry Seaward said:

FCRA 1682c says BK cannot report past 10, and civil judgments can't report past 7, unless the "governing statute of limitations" is longer. 

THIS^^^^^^^^^^^^^^^^^  If a state has a SOL longer than 7 years it can report on a credit report longer than 7 years.

36 minutes ago, TenBucksBroke said:

Clydesmom, public records are a separate thing from the credit bureaus.

Public records ARE reported on credit reports.  Some items are no longer reported by the bureaus like traffic fines and red light tickets but things like BK can stay longer than 7 years.  

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9 minutes ago, Harry Seaward said:
 

FCRA 1682c says BK cannot report past 10, and civil judgments can't report past 7, unless the "governing statute of limitations" is longer. 

Well there you go. After 7 it'll fall off. So if you go looking after 7 years it won't show up, except to a mortgage company because they do better due diligence and check the courthouse to see if you have any judgements.

EDIT because you beat me to the post :)

Public records are NOT reported to the credit bureaus unless some company reports them. They're not the same thing and no one at the courthouse will bother to add anything to your credit report. Florida follows federal law and allows reporting of judgements for 7 years.

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7 minutes ago, TenBucksBroke said:

Public records are NOT reported to the credit bureaus unless some company reports them.

Again, not true.  The bureaus actually have computerized bot programs that comb the public records and when they can match one by 3 criteria to a consumer it lands on the report.  No specific "company" has to report it.

 

9 minutes ago, TenBucksBroke said:

Florida follows federal law and allows reporting of judgements for 7 years.

Again, no. There is recent case law in FL from their highest court that says otherwise. Florida Supreme Court, in Salinas v. Ramsey, 2018 WL 549183 (2018) recently considered this question and came to the conclusion that a Florida judgment actually lasts twenty years, rather than just five.  The Court found that Florida judgments have a twenty year life during which those judgments are enforceable.

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8 minutes ago, Clydesmom said:
 

Again, not true.  The bureaus actually have computerized bot programs that comb the public records and when they can match one by 3 criteria to a consumer it lands on the report.  No specific "company" has to report it.

Haha! No, they do not. Please cite your source.

Quote

 

Again, no. There is recent case law in FL from their highest court that says otherwise. Florida Supreme Court, in Salinas v. Ramsey, 2018 WL 549183 (2018) recently considered this question and came to the conclusion that a Florida judgment actually lasts twenty years, rather than just five.  The Court found that Florida judgments have a twenty year life during which those judgments are enforceable.

Again, you're confusing enforceable with reported. They're only reported for 7 years. If you can find where they are reported to credit agencies longer than 7 years, please cite the source. I have never found them reported longer than 7 years in Florida. Ever.

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14 minutes ago, TenBucksBroke said:

After 7 it'll fall off.

I've honestly never seen one report even the full 7, myself, but legally it could.

4 minutes ago, Clydesmom said:

when they can match one by 3 criteria to a consumer it lands on the report. 

The bureaus changed judgment and lien reporting criteria within the last couple of years to where the judgment has to include a correct first and last name and full SSN or DOB in order to be reportable, and must be refreshed every 90 days. 

https://www.experian.com/blogs/ask-experian/heres-why-your-credit-scores-could-jump-this-week/

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32 minutes ago, TenBucksBroke said:

Haha! No, they do not. Please cite your source.

Again, you're confusing enforceable with reported. They're only reported for 7 years. If you can find where they are reported to credit agencies longer than 7 years, please cite the source. I have never found them reported longer than 7 years in Florida. Ever.

Dude I am so tired of looking up cites to combat your ignorance.  The FDCPA allows a judgment to be reported LONGER than 7 years when the state SOL exceeds that.  The court in FL just ruled LATE last year that judgments are good for 20 years.  You will start to see the fall out on reporting in FL over the next couple of years as they remain there when as Harry said they verify by name, DOB and SSN and refresh the information accurately. 

Anyone who follows your advice does so at their own peril.  We are done here.

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7 minutes ago, Clydesmom said:
 

Dude I am so tired of looking up cites to combat your ignorance.  The FDCPA allows a judgment to be reported LONGER than 7 years when the state SOL exceeds that.  The court in FL just ruled LATE last year that judgments are good for 20 years.  You will start to see the fall out on reporting in FL over the next couple of years as they remain there when as Harry said they verify by name, DOB and SSN and refresh the information accurately. 

Anyone who follows your advice does so at their own peril.  We are done here.

"Dude", you're still talking in circles. Allowing a judgement to be enforceable does NOT mean it is report-able to bureaus. There is a distinction between the two. You can argue until you're blue in the face, but you're confusing two different things and posting misinformation.

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@TenBucksBroke

@Clydesmom

You’re both wrong, and you’re both right.

Here is the language from the FCRA.

15 U.S.C. 1681c(a)(2)

(2)  Civil suits, civil judgments, and records of arrest that, from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.

The SOL for judgments in my state is 10 years.  Based upon the language of the the FCRA, a civil judgment could be reported for 10 years.  However, the credit reporting agencies seem to have discretion.

From Experian.

”Judgments No Longer Included on a Credit Report”

https://www.experian.com/blogs/ask-experian/judgments-no-longer-included-on-credit-report/

The CRAs have the right to report a judgment for the period of time allowed by the SOL of each state.   It appears they also can determine to report them for only 7 years or not report them at all.  

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Okay, so one way or another my credit will be shot.

So since I can not file ch 7 for about 18 months, and I cannot pay the debt if they take me to court before then I will face a judgement.

Does ch 7 get rid of past judgements being enforced?

Still wonder do I answer the creditor letter or have no contact. If it would help to send my SSD statements and that my checking account has only those funds in them?  Condo is protected, though I am trying to sell, will not make anything on it, just need to get out due to high HOAs. Would just let it go, but sounds like I need to stay in FL until I can file....

I plan to eventually go live with family in NJ but have heard NJ more favorable to creditors than FL.  Anyone know about that?

again, any ideas on how to handle creditors I can’t pay before BK

 

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11 hours ago, BV80 said:

However, the credit reporting agencies seem to have discretion.

They always have. They've never been obligated to report something just because a data furnisher provided it. 

@Clydesmomis right. Judgments can legally stay on a report for 10, 20, 50 years if the local SOL is that long. 

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2 hours ago, Kauai1018 said:

Does ch 7 get rid of past judgements being enforced?

Yes.  You include the judgment on your bankruptcy filing and if you are successfully discharged it is wiped out.

2 hours ago, Kauai1018 said:

If it would help to send my SSD statements and that my checking account has only those funds in them?

SOME creditors do have a policy that if a debtor submits proof that they are disabled and their income is protected by federal law they will drop collections on the matter.  However, some creditors could care less and will sue anyway. You have absolutely NOTHING to lose by trying.  

2 hours ago, Kauai1018 said:

I plan to eventually go live with family in NJ but have heard NJ more favorable to creditors than FL.  Anyone know about that?

I believe that is correct.  What I would be looking at is which state has the better CH7 filing for myself and how long I would have to wait to use NJ.  If NJ is better and I could move there ASAP doing that and riding it out off the radar until you could file under their rules might be better.  Off the radar means no change of address, having SSDI go to a pre-paid debit card and no new accounts in your name.  By moving before other creditors sue they would have to start over and sue you in NJ once they find you.  That might buy some time as well.

 

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Thank you, I have heard writing creditors makes you stand out. But it seems to me if they just sue everyone it might not hurt.

Sounds like some people don’t actually get sued, is that just luck?

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