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Thread: Judgement

  1. #1
    ldptx Guest

    Red face Judgement

    iwas served a civil suit summons for an unpaid credit card. i have 20 days to respond. what should I do? they are suing for the unpaid balance, plus legal fees, etc. the reason I have not paid them is that I can't afford to and keep my house. my credit has gotten so bad I couldn't get another house. i live in Texas. when the judgement is posted what are they legally able to do in texas to recieve their money? is my best course of action bankruptcy? and is it too late for that? what type of attorney should I contact to help me?
  2. #2
    JasonRT Guest
    If you have no other assets besides your house you should consider filing for bankruptcy. Consult with a bankruptcy attorney to determine if the assets you do have will be considered exempt by the bankruptcy court.

    Not being able to pay is not a valid defense - so you are only wasting the court's time by filing an answer.


    [email]JASON@LEGISLATOR.COM[/email]
  3. #3
    bigun is online now Senior Member
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    And, wages are exempt from garnishment in Tx. if that has a baring on your decision.
  4. #4
    ldptx Guest

    Question

    If I understand correctly, I shouldn't bother to respond to the suit becase there is nothing to fight about. I owe them money. I don't have any to pay them, so I should just take the default judgement. Do I need to file bankruptcy now? or can it be later? I don't know if I can afford that. Pitiful, huh?? Once they get a judgement, they can't garnish wages in TX, so what can they do? Can they tap into my bank account, there isn't anything extra in it, other than what i use to pay bills and buy food. I have a vehicle with a loan on it, I've only lived in my house two years (no equity, plus I'm in a workout agreement with the mortgage company) Can they tap into my retirement system (mandatory withdrawal from my checks for a future annuity), Can they tap into my husband's 401k? I would like to know what I'm up against if I can't file bankruptcy right away. Can I file bankruptcy if I'm in a workout agreement with my mortgage company? What about a child's college fund? Is a judgement against you worse than a bankruptcy or is it all the same? I know I have tons of questions. This all new to me. Up until last year I had perfect credit, one bad thing happens and boom my credit is history.
    Last edited by ldptx; 01-28-2002 at 09:59 PM.
  5. #5
    JasonRT Guest
    Originally posted by ldptx
    If I understand correctly, I shouldn't bother to respond to the suit becase there is nothing to fight about. I owe them money. I don't have any to pay them, so I should just take the default judgement. Do I need to file bankruptcy now? or can it be later?
    You can file for bankruptcy anytime you want, but the sooner the better.
    Once they get a judgement, they can't garnish wages in TX, so what can they do? Can they tap into my bank account, there isn't anything extra in it, other than what i use to pay bills and buy food. I have a vehicle with a loan on it, I've only lived in my house two years (no equity, plus I'm in a workout agreement with the mortgage company)
    They can levy on your bank account and take all funds that are on deposit.
    Can they tap into my retirement system (mandatory withdrawal from my checks for a future annuity), Can they tap into my husband's 401k?
    No they cannot.
    Can I file bankruptcy if I'm in a workout agreement with my mortgage company? What about a child's college fund?
    You can file, but you must continue making payments to your mortgage company from non-exempt funds if you want to keep your house. Whose name is your children's college fund in? If it is in your name, it is subject to levy.
    Is a judgement against you worse than a bankruptcy or is it all the same?
    A bankruptcy is generally worse than a judgment, but it is the only way to protect your remaining assets.


    [email]JASON@LEGISLATOR.COM[/email]
  6. #6
    JETX is offline Senior Member
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    Okay, since you are in Texas, let me give you a quick lesson in Judgments here:
    1) Wages cannot be garnished in Texas.
    2) A court judgment is not like 'other' debts. First, it doesn't expire. Texas judgments are good for 10 years, and renewable every 10 years until paid in full. So, you may not have much now, but it can 'get you' anytime.
    3) A judgment in Texas accrues interest at 10% per year MINIMUM. If the judgment arises from a contract, it accrues at the contracted interest rate, if one.
    4) A judgment creditor can seize your bank accounts, and not just the 'left overs'.
    5) A judgment creditor can file a judgment lien against your property. The lien cannot force the sale of a homestead, but if you sell it or refinance, the judgment will be required to be paid... with interest.
    6) And finally... you can be questioned anytime the creditor wants, in the form of Post Judgment discovery in aid of Enforcement of Judgment. And if you fail to respond, the creditor can get sanctions ($$) against you and even ask that you be jailed for contempt of court.

    Your questions:
    Q1) "Can they tap into my retirement system (mandatory withdrawal from my checks for a future annuity)"
    A1) Normally, no.

    Q2) "Can they tap into my husband's 401k?"
    A2) Normally, no.

    Q3) "I would like to know what I'm up against if I can't file bankruptcy right away."
    A3) Then you will be subject to enforcement of the judgment.

    Q4) "Can I file bankruptcy if I'm in a workout agreement with my mortgage company?"
    A4) Only a bankruptcy attorney can determine your specific financial options.

    Q5) "What about a child's college fund?"
    A5) Grabbed!

    Q6) "Is a judgement against you worse than a bankruptcy or is it all the same?"
    A6) Completely different. This is like asking which is worst, run over by a car or beat over the head with a pipe. Neither one is fun.

    Q7) "I know I have tons of questions. This all new to me. Up until last year I had perfect credit, one bad thing happens and boom my credit is history."
    A7) This is part of the problem.... you say you had 'perfect' credit, but you were obviously living beyond your means, or living without sufficient savings to take car of potential problems.

    Do whatever you need to do to pay your debts. Sell the electronics. Get a 2nd job. Cut your expenses. Live within your means.
  7. #7
    ldptx Guest
    Thanks for your response. You are right about the debt. Unfortunately, my house was burglarized recently so I don't have much of value to sell. They took it, right down to the kids penny banks. Believe me, it's true. I have a two year old. I work full time and my husband works nights. No room for a second job. I'm not going to place blame, but I trusted someone else to do the right thing with our bills and not buy things we couldn't afford. I thought we were on the same page. Obviously, we weren't and my name is ruined, but I can't change that, only learn from the mistakes, pick up the pieces and go on.

    One last question. If I file bankruptcy before the 20 days is up, then does the judgement never occur and it only goes back to the original debt that I owe and not all of the extra fees? If they get the judgement and then I file bankruptcy, do the fees go into the plan?
  8. #8
    JasonRT Guest
    If you file a Chapter 13 bankruptcy you will be required to pay all of the court costs and attorney fees. If you file a Chapter 7 bankrutpcy and this debt is UNSECURED the entire amount will be discharged and you will pay nothing.


    [email]JASON@LEGISLATOR.COM[/email]
  9. #9
    JasonRT Guest
    Originally posted by Halket
    Q5) "What about a child's college fund?"
    A5) Grabbed!
    Only if the college fund is in the name of the judgment debtor may you levy on it. If it is in the name of the children, in the name of the judgment debtor FBO the children, or held in a trust account you may not levy on the children's college fund.


    [email]JASON@LEGISLATOR.COM[/email]
  10. #10
    ldptx Guest
    Thanks for your answers. I'm in the process of contacting an attorney.
  11. #11
    JETX is offline Senior Member
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    Looks old "JasonRT" still can't get it right....

    Question asked, "If I file bankruptcy before the 20 days is up, then does the judgement never occur and it only goes back to the original debt that I owe and not all of the extra fees? If they get the judgement and then I file bankruptcy, do the fees go into the plan?"

    JasonRT response: "If you file a Chapter 13 bankruptcy you will be required to pay all of the court costs and attorney fees. If you file a Chapter 7 bankrutpcy and this debt is UNSECURED the entire amount will be discharged and you will pay nothing."

    Truth: Just the fact of filing a bankruptcy petition freezes ALL creditor actions, including a lawsuit in progress (since the federal bankruptcy action supercedes any local or state legal proceeding). And this 'freeze' stays in place until either the bankrutpcy court rules, or the creditor is able to win a motion to exclude their debt from the proceeding (unusual). Lets assume that no exclusion is ordered. Your debt can now go either of two ways:
    (1) Your bankruptcy petition is denied and debts are NOT discharged. In this case, the creditor moves forward (to court or in court), or
    (2) Your bankruptcy petition is granted. Depending on your filing (7 or 13), this gets two different results. Chapter 7 (liquidation): Your non-exempt assets are turned over to the court and sold, the proceeds pay the creditors, all debts are discharged, you start "new". Or, chapter 13 (reorganization): Your non-exempt assets are turned over to the court, your ability to future payments (usually over 3 years) is determined and the creditors are paid back (partially) by dividing your total pool (assets sold plus payments) is divided into the total debt and creditors are paid a percentage of debt. Debts are discharged upon your completing the payment plan.

    The 'debt value' of this specific debt is what it was at the time of the 'freeze'. If no judgment rendered, you only owe the debt. If a judgment was rendered that included costs and fees, you owe all of them. The 'debt value' has nothing to do with the bankruptcy chapter you file under as alleged by JasonRT.

    On to JasonRT's next 'guess':

    Question asked: "Q5) "What about a child's college fund?". I answered "Grabbed!"

    JasonRT 'guessed': "Only if the college fund is in the name of the judgment debtor may you levy on it. If it is in the name of the children, in the name of the judgment debtor FBO the children, or held in a trust account you may not levy on the children's college fund."

    Sorry, but that wasn't the question. It was CAN it be seized. And the answer is YES, it can be (though JasonRT is correct in that it would have to be 'findable' first... and a creditor doesn't normally check childrens names for assets UNLESS the debtor has exhibited a pattern of fraudulent conveyance). So, lets assume that the creditor was able to locate the 'childs college fund' since it would have to be in the debtors name. After it has been seized, the debtor has the right to challenge that seizure. The decision on whether it would be returned or not would be purely up to the debtors ability to show that it was exempt.. and the courts believing the claim.
  12. #12
    JasonRT Guest

    Halket is confused??

    Originally posted by Halket
    Looks old "JasonRT" still can't get it right....

    Question asked, "If I file bankruptcy before the 20 days is up, then does the judgement never occur and it only goes back to the original debt that I owe and not all of the extra fees? If they get the judgement and then I file bankruptcy, do the fees go into the plan?"

    JasonRT response: "If you file a Chapter 13 bankruptcy you will be required to pay all of the court costs and attorney fees. If you file a Chapter 7 bankrutpcy and this debt is UNSECURED the entire amount will be discharged and you will pay nothing."

    Truth: Just the fact of filing a bankruptcy petition freezes ALL creditor actions, including a lawsuit in progress (since the federal bankruptcy action supercedes any local or state legal proceeding). And this 'freeze' stays in place until either the bankrutpcy court rules, or the creditor is able to win a motion to exclude their debt from the proceeding (unusual). Lets assume that no exclusion is ordered. Your debt can now go either of two ways:
    (1) Your bankruptcy petition is denied and debts are NOT discharged. In this case, the creditor moves forward (to court or in court), or
    (2) Your bankruptcy petition is granted. Depending on your filing (7 or 13), this gets two different results. Chapter 7 (liquidation): Your non-exempt assets are turned over to the court and sold, the proceeds pay the creditors, all debts are discharged, you start "new". Or, chapter 13 (reorganization): Your non-exempt assets are turned over to the court, your ability to future payments (usually over 3 years) is determined and the creditors are paid back (partially) by dividing your total pool (assets sold plus payments) is divided into the total debt and creditors are paid a percentage of debt. Debts are discharged upon your completing the payment plan.

    The 'debt value' of this specific debt is what it was at the time of the 'freeze'. If no judgment rendered, you only owe the debt. If a judgment was rendered that included costs and fees, you owe all of them. The 'debt value' has nothing to do with the bankruptcy chapter you file under as alleged by JasonRT.
    According to the cardholder agreement the debtor is responsible to pay reasonable attorney fees if litigation is initiated. The attorney fees may be added to the debtor's account balance the day suit is filed. When the credit card company files their proof of claim they may include attorney fees in the amount. If a Chapter 13 is filed the percentage specified in the plan will apply to the TOTAL AMOUNT OF THE DEBT, including attorney fees. Why is this so confusing for you to understand? I would think you should have reviewed a few of these cases in your work. Have you ever filed a proof of claim and not included all the money you or your client was owed?

    On to JasonRT's next 'guess':

    Question asked: "Q5) "What about a child's college fund?". I answered "Grabbed!"

    JasonRT 'guessed': "Only if the college fund is in the name of the judgment debtor may you levy on it. If it is in the name of the children, in the name of the judgment debtor FBO the children, or held in a trust account you may not levy on the children's college fund."

    Sorry, but that wasn't the question. It was CAN it be seized. And the answer is YES, it can be (though JasonRT is correct in that it would have to be 'findable' first... and a creditor doesn't normally check childrens names for assets UNLESS the debtor has exhibited a pattern of fraudulent conveyance). So, lets assume that the creditor was able to locate the 'childs college fund' since it would have to be in the debtors name. After it has been seized, the debtor has the right to challenge that seizure. The decision on whether it would be returned or not would be purely up to the debtors ability to show that it was exempt.. and the courts believing the claim.
    Yes, and I answered the question completely. You stated "grabbed" which is incorrect in all of the situations I illustrated. You may NOT levy upon the children's assets if you have a judgment against their parents. You may NOT levy upon trust accounts. The college fund does not HAVE to be in the debtor's name. They can keep the college fund for their children in any of the means spelled out in my previous answer. You have never been able to levy on assets that are not in the judgment debtor's name - if you have please provide case cites (as requested once before).

    For someone in the judgment enforcement business you don't seem very familiar with what is actually necessary to enforce a judgment.


    [email]JASON@LEGISLATOR.COM[/email]
  13. #13
    JETX is offline Senior Member
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    Sorry, JasonRT, but your ignorance is showing again....

    You said, "If you file a Chapter 13 bankruptcy you will be required to pay all of the court costs and attorney fees. If you file a Chapter 7 bankrutpcy and this debt is UNSECURED the entire amount will be discharged and you will pay nothing."

    My only response was that the filing of either a chapter 7 OR chapter 13 makes no difference as to the attorney fees.

    You failed to understand my response and came back with some diatribe ("According to the cardholder agreement the debtor is responsible to pay reasonable attorney fees if litigation is initiated."). My post didn't say anything about the cardholder agreement and possible inclusion of attorney fees.

    Then, you make another ignorant statement, "The attorney fees may be added to the debtor's account balance the day suit is filed."

    Sorry, wrong again!!
    Though a plaintiff may ASK that attorney fees be recovered, it isn't a done deal until the court grants that request. In fact, the attorney has to show the court (and is subject to challenge by the defendant) that his/her "fees are reasonable and customary" before the court will grant the request.

    As for seizure of a "child's college fund", I said 'grabbed'. Again, you seem to misunderstand that a childs college fund CAN be (and I have) grabbed and seized as a part of a judgment enforcement action. The responsibility then falls on the debtor to PROVE to the court that those funds are exempt. Out of probably 10 or so cases where I have seized the (claimed) "Childrens college funds", I have only returned them in ONE case. And that was when the funds were CLEARLY the childrens and the funds were proven to have come from other (non debtor) sources like the grandparents.

    As for proving them with caselaw, you obviously do NOT understand that garnishment hearings are NOT part of caselaw... unless it gets to the appellate court level.

    JasonBoy, do us all a favor.... limit your responses to traffic tickets and such... your lack of understanding and experience of civil laws is showing.

    Finally, I will put MY record of judgment enforcement up against yours any day. As of this week, I have enforced over 300 cases over the years.... and have about 540 open cases right now in various stages of enforcement. What is YOUR experience????

    Or are you just another 'hair stylist' with an opinion???
  14. #14
    nailtech is offline Senior Member
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    Originally posted by Halket
    Or are you just another 'hair stylist' with an opinion???
    Should I take this personal?
  15. #15
    JETX is offline Senior Member
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    No. This was NOT a reference to you or to any person who may in fact be a hair stylist. If you took this as a 'slight', I apologize.

    In all honesty, I just visualized that "JasonBoy" was this little dweeb with a single strand of hair that he wraprs around and around his head... so that it looks like a beehive when he gets ready to go 'out on the town'.

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