Seeking advice on a garnishment..

[MominMI]

What is the name of your state? Michigan - North Oakland County

Good Morning..

Such a long story.. and trust me when I say I am cutting this short!

My son up and enlisted in the Army last month. Prior to his leaving I had him file a P.O.A. so that I could take care of financial matters while he is away. I knew he was buried.. but I did not realize the extent of it. Now I know why he could not sleep at night.. I can't either now! The damage is done and I am trying to repair and repay (with his money) what all he left behind. I know I should leave it all on his shoulders to deal with it like an adult, as his mother and knowing what I know now, I have to help him in any way that I can.

It started and snowballed by purchasing a car of his dreams.. some special Honda and he traded in his truck. They did not give him payoff , so he rolled in the remaining balance. The car was stolen 1 month after purchasing and since he did not have extra insurance to cover the roll in, he was responsible to pay that off. They demanded immediate payment, he did not have that kind of cash.

Then along the way came the credit card offers from every institution you can think of. He opened up 6 of them.. one here.. one there..

Then there are his Sallie Mae education loans exceeding $45,000.. (I am going over those this coming weekend and try to get them in deferment status while he gone).

Overwhelmed and not knowing what to do.. one night while watching TV he saw a commercial regarding debt and offering help.. 1-800-$$$-$$$$. He called them up, signed a contract and began making payments to them... He had no contact and made no payments to any of his creditors for over 6 months. No payments were made to any of the creditors. I made the decision the other day and closed the account and am trying to get a refund from them.

I am not placing blame on anybody but him.. he was lazy, irresponsible and then became very depressed over it all. I knew something was wrong and asked him over and over again, but he would never talk about it. If I had any idea what all was going on for the last couple of years, I would have stepped in and kicked his behind real hard and woke him up. Now I know he left for a reason and that was to get a new start.. that is the only reason why I am helping him.

With what little cash he had in the bank, so far I have reached a settlement and paid off Honda, one of the credit cards that is currently in arbitration and also paid 3 past due medical bills.

Now what I have remaining is 5 credit cards, one of which was granted garnishment 2 weeks ago. I received the court documents in the mail on Saturday.

I called the attorney yesterday that represented the credit card company. She did not realize that he was active military. His employer just filled out the court documents and stated he was on leave. Since she found this out, she closed the case from her office and is now sending it back to the credit card company attorney's. She told me to wait until the end of the week to contact them, explaining that they should have all the documents back by then.

I do not know how to proceed on this one. There is not enough money to pay them off right away and I just know that is what they will demand and rightfully so. His military pay is 2 payments behind and I have no idea when that will begin. Heck, it will take at least 10 pay periods to pay them off. If/When I get the refund from the debt attorney/counselor or whatever they are.. that sure will help with this one.

Any advice on how to proceed with this would be very much appreciated. I am very lost and very overwhelmed by this.

Thank You for your time.. Mom in MI

[moburkes]

Why hasn't he considered bankruptcy?

[SHORTY LONG]

Have you contacted the manager/general manager or owner of the debt
consolidation company?

On the last Credit card where the Attorney is sending it back to the Company,
call the Credit Card Company, request to speak to an Account Manager, and
let them know your Son is active Military and that you are trying to help
him so it does not cause him problems while he is serving, and try and work
out a payment plan.

About the Student Loans, yes, by rights you/he should be able to get these
deferred.

Please repost to let us know how you are faring with all of this. I salute
you for helping Son in his time of need, especially while he is doing
a great Service for our Country. Curious, what Branch is he in, and how
long has he been in thus far?

[MominMI]

Thank You for the quick responses. I do appreciate it. I will take your advice by first asking to speak to an account manager. I just pray that this is not going to affect him right now while serving. The Army does not take bad debt lightly.

From what little he told me, he did not want to file bankruptcy. He opted to file with this Law Firm to do debt consolidation. Which ended up being such a huge mistake. A mistake that he should have taken care from the very beginning.

He enlisted in the Army for 3 years active and then 8 years reserves. He only left a month ago and is currently in Boot Camp. Yes, they are giving him a good boot!

He has learned his first valuable lesson thus far.. the Army would not give him the security clearance that was needed for a job that he was educated and trained in because of his bad credit. The next several years will be spent working with hazardous material.

Thanks again.. M

[SHORTY LONG]

Please keep us updated.

[debtcollector`]

Military pay is always screwed up.

As soon as he can, he needs to get an allotment started to a separate bank account -- probably one you have access to. Even when there are pay problems in the Army, allotments always get paid. Unfortunately, he won't be able to do that while in basic -- unless basic has changed a lot more than I thought since I went through it.

Yes, his credit problems are going to affect his military career. He will not get out of basic and AIT without proving he has repaid the debts or that he has a plan in place to repay those debts. Of course, that also depends on the security clearance requirements of his MOS.

I see from your last posting that he is already experiencing that.

When your son gets to his permanent duty station, he needs to go to Army Community Service (ACS) and meet with one of the counselors. They have a financial education program that may help him a lot. I sent a lot of my troops to ACS for help when at Ft. Bliss.

He may have option to get a loan to pay off all of his outstanding debt through the Armed Forces Credit Union. He will, of course, be required to repay through an allotment. Chances are he will still need to have a co-signer.

Good luck to you and your son. You will be amazed at how much he grows up in three short years.

DC

[MominMI]

Good Morning DC..

I am not sure what you mean by allotment? Would that be the cash insentive they offered him to sign up? If so, from what he explained to me that will be paid in installments over the 3 year period. As of right now, he has everything set up to be direct deposit into his checking that I am using.

I have to tell you I nearly fell out of my chair when I read what you said:

He will not get out of basic and AIT without proving he has repaid the debts or that he has a plan in place to repay those debts.

I am praying that by the end of December to be able to get this all paid off. That can happen "IF" I can collect the money from that law firm that was suppose to help him to begin with, collect the money owed from his friend for the truck he bought off of him before going in and then his Army pay. From what I have calculated it "should" work out providing all the "IF's" happen as planned!!

I do not like to come off as being ignorant when speaking to professionals. I have spent hours searching the web for some understanding before proceeding on this. Since the garnishment judgement is being sent back to the CC company lawyers, what could possibly be their next step? Can they contact the Army on this garnishment judgement that was granted? Or is that garnishment only good for his prior place of employement that he is currently on leave from? The papers state that the garnishment is in effect until 12/17/07. My plan is to call them today, I do not want to wait until Friday as the lawyer who represented the CC company suggested I do. I am a nervous wreck thinking about this phone call.

By the way.. his MOS is 74D - Chemical Operations Specialist. I find it quite shocking that this MOS does not have at least a secret clearance attached to it. I am sure he will be putting that $$,$$$ IT Networking degree to good use now.

When he finally is allowed internet access, I will forward him this link to read.

Thanks again!! M

[debtcollector`]

Unfortunately the "ifs" tend to not work out at a rate in direct proportion with the level of need.

An allotment requires your son file a form with personal dictating that X dollars for his pay be sent elsewhere on the first of the month. Many soldiers use allotments to make house payments and pay important bills in case they get deployed. It is exactly the same as the direct deposit - except that the allotments come first. So if his pay is screwed up and he receives a "no pay due," the allotment money is still paid.

Originally Posted by MominMI

Good Morning DC..
Can they contact the Army on this garnishment judgement that was granted? Or is that garnishment only good for his prior place of employement that he is currently on leave from? The papers state that the garnishment is in effect until 12/17/07. My plan is to call them today, I do not want to wait until Friday as the lawyer who represented the CC company suggested I do. I am a nervous wreck thinking about this phone call.

Take the time and wait. There are special laws in place to aid service members regarding debt. Many lawyers will not want to navigate that minefield as those laws are in addition to the laws that protect everybody.

I have a short piece I wrote on negotiation that might help you.
[url]http://forum.freeadvice.com/showthread.php?t=300276[/url]


DC