Wife being sued

[Sebin]

What is the name of your state? North Carolina

My wife received a call from a lawyer representing Sears Mastercard saying that they're going to sue her for non payment. She owes $2600 and we simply don't have anywhere near that money, not even a quarter of that.

She doesn't have anything that they can take away from her, her car has a lien on by her grandfather, and she doesn't have anything else. Could she go to jail for this, not being able to pay them?

Also, I was authorized in that account. Does that mean that they can sue me as well?

Finally, that lawyer told her that she would have to pay the court costs, around $175. Can they arrest her if she doesn't have the money to pay for that either?

Thanks

 

[Debt Guy]

Could she go to jail for this, not being able to pay them?

No. Debts are civil matters. This country abolished debtor's prison about 150 years ago.​

Also, I was authorized in that account. Does that mean that they can sue me as well?

Yes, you can be sued. Most likely you would not be sued. If you were sued, you would need to file a response with the court that you were not obligated on the debt. NC is not a community property state and the judge should dismiss you from the suit.​

Finally, that lawyer told her that she would have to pay the court costs, around $175. Can they arrest her if she doesn't have the money to pay for that either?

It is customary that the court would award to the creditor the cost of litigation (attorney fees and costs). Again, these fees are civil matters and one cannot be sent to jail for failure to pay.​

A caveat for your wife. She can go to jail if she ignores an order of the court. At some point, a judgment will be awarded and the creditor will conduct an asset hearing. The hearing might be a face to face meeting in the courtroom, or a meeting in the lawyer's office or be done by mail. If she fails to provide the information as ordered, the judge has the discretion to issue a bench warrant. It is rare but it does happen.

Finally, NC has a short statute of limitations at 3 years. If the last payment on the account was more than 3 years ago, she must respond to the lawsuit with an SOL defense. If she ignores the lawsuit and a judgment is awarded, she loses the SOL defense. So, figure out when the last payment was.

 

[Sebin]

Another question

Thanks a lot for your reply.

I read once that the judge can issue a judgement to cease a bank account. Is that true? Can they actually cease our joint bank account and one day we wake up and we have no money in the bank?

What happens when they sue her and she doesn't have money to pay court costs or even a lawyer?

Thanks again

 

[efflandt]

Your bank account could "cease" when they get a court judgement and "seize" all the money in it (or overdraw it).

 

[Betty]

OP - as per Debt Guy's post, when was the last payment made on the Sears Mastercard? The SOL on collection of this debt may have elapsed - she can then use this as her defense in the lawsuit.

 

[Sebin]

OP - as per Debt Guy's post, when was the last payment made on the Sears Mastercard? The SOL on collection of this debt may have elapsed - she can then use this as her defense in the lawsuit.

No, she can't use that because the last payment was around May 06.

 

[Sebin]

A caveat for your wife. She can go to jail if she ignores an order of the court. At some point, a judgment will be awarded and the creditor will conduct an asset hearing. The hearing might be a face to face meeting in the courtroom, or a meeting in the lawyer's office or be done by mail. If she fails to provide the information as ordered, the judge has the discretion to issue a bench warrant. It is rare but it does happen.

Debt Guy, This asset hearing that you mention, I assume it is some kind of meeting where they ask my wife what things does she own, right? Now, what exactly constitutes an assett for the purposes of this? I mean, is there a limit on value, like for example, anything over $1000 is considered an assett? What I'm trying to get at is if electronics equipment such as a computer and a TV set are considered assetts that they can take away if the judge grants them that, or if assetts are only bigger things such as a car?

Also, you mention that NC is not a community property state. Does that mean that electronics that I bought in my name are not subject to being seized by the judge, as well as my car?

Thanks

 

[BSharp]

Does that mean that electronics that I bought in my name are not subject to being seized by the judge, as well as my car?
Thanks

That is very irresponsible to be spending on non-essential luxuries when you have outstanding debt.

Are there any adults in this household?

 

[Sebin]

That is very irresponsible to be spending on non-essential luxuries when you have outstanding debt.

Are there any adults in this household?

This is not a forum for moral judgements. If I would've wanted stupid remarks like this I would've posted a very different message in a very different forum. This is a LEGAL forum. If you don't have a relevant comment that can either help or at least instruct in some way, abstain from replying to my postings in the future.

 

[Debt Guy]

This asset hearing that you mention, I assume it is some kind of meeting where they ask my wife what things does she own, right?

Correct.​

Now, what exactly constitutes an assett for the purposes of this? I mean, is there a limit on value, like for example, anything over $1000 is considered an assett? What I'm trying to get at is if electronics equipment such as a computer and a TV set are considered assetts that they can take away if the judge grants them that, or if assetts are only bigger things such as a car?

Every state has a list of assets that are exempt from attachment by a creditor. NC exempts the first $10,000 of equity in your home and the first $1500 of equity in a vehicle -- note that this is equity not value. For example, if your car is valued at $6000 and you owe $5000 on the auto loan, then your equity is $1000. Certain other items might be fully exempt -- a certain amount of clothing or a wedding ring, for example. Every state is different.

For the most part, creditors do not want used clothing, furniture or TVs because they just are not worth very much -- think in terms of garage sale value of something that is used because that is what the creditor would get and they still have to pay the cost of someone to come pick it up and sell it. It happens but it is pretty rare.​

Also, you mention that NC is not a community property state. Does that mean that electronics that I bought in my name are not subject to being seized by the judge, as well as my car?

Basically correct. Anything that is in your name cannot be attached for someone else's debts.

By the way, NC does not allow a wage garnishment so her paycheck is safe. However, NC does allow a levy of any bank account that has her name on the account even if the money does not belong to her.​

 

[Sebin]

Thanks a lot for your reply, Debtguy. I knew about NC not allowing wage garnishment, but she is disabled and hasn't worked in two years, which is mostly why we had trouble repaying this debt.

When you say the first $10000 of equity in my home, you mean the home itself, not the valuables inside the home right? Sorry if the question seems dumb, but I want to make sure of this. That's the only thing that scares me a bit, because we don't own a home, we rent, and while she has a car that's worth something, it has a lien on since it was purchased by her grandfather, so they can't take that away from her. My car is an old piece of junk that is not worth even $1000. The only things I'm worried about are the few electronics that we own, especially my computer which is rather expensive (a little over $1000), and my TV set, also a bit expensive, but less than $1000. Those are things that I bought in my name, but after we got married. Do you think that changes anything? I mean, even if this state is not a community property one, aren't the things purchased during the marriage property of both regardless of whose name shows on the invoice?

Again, thanks for your reply.

 

[TigerD]

Thanks a lot for your reply, Debtguy. I knew about NC not allowing wage garnishment, but she is disabled and hasn't worked in two years, which is mostly why we had trouble repaying this debt.

When you say the first $10000 of equity in my home, you mean the home itself, not the valuables inside the home right? Sorry if the question seems dumb, but I want to make sure of this. That's the only thing that scares me a bit, because we don't own a home, we rent, and while she has a car that's worth something, it has a lien on since it was purchased by her grandfather, so they can't take that away from her. My car is an old piece of junk that is not worth even $1000. The only things I'm worried about are the few electronics that we own, especially my computer which is rather expensive (a little over $1000), and my TV set, also a bit expensive, but less than $1000. Those are things that I bought in my name, but after we got married. Do you think that changes anything? I mean, even if this state is not a community property one, aren't the things purchased during the marriage property of both regardless of whose name shows on the invoice?

Again, thanks for your reply.

Debt Guy meant the first $10,000 of equity in your home. That is the first $10k after your mortgage. Cars aren't going to be worth much. I know you paid a lot of money for your TV but at an asset auction it isn't worth much. The odds of your household property being worth more than the exemption is low. Remember the value isn't the new value or replacement value but the depreciated value.

And yes, property bought during the marraige, unless specially titled otherwise is usually considered to be jointly owned.
DC

 

[Debt Guy]

Slow down and take a deep breath. Let it out slowly.

From what you describe, it sounds to me like you don't have much to worry about. Creditors really don't want used computers or TVs. I know they are valuable to you. What would it sell for at a garage sale? That is what they would get for it. 99% of the time, it is just not worth the effort.

I am not trying to talk down to you. Take for example that computer that cost $1000. When it goes to the garage sale, it might at maximum sell for $300 to $500. The creditor is going to pay another $100 to hire someone to come out and pick it up, check it out and carry it to auction. Then they are going to pay the auction another $100. There is just not enought left over to make it worth their effort.

I realize this is all new and scary. I just don't think you have a problem. But, even if you do have a problem, it is what it is. Worry and fret is not going to change anything.

The only thing you wife must do is be truthful when she answers any questions.

Given her health problems, if the worst that happens is you lose your TV, so what? You can live with the worst case scenario. I still don't think that will happen.

 

[Sebin]

Thanks again for your replies. Actually I found the article on exempt property for NC which has a couple of things that are relevant to my case:

"(4) The debtor's aggregate interest, not to exceed five thousand dollars ($5,000) in value for the debtor plus one thousand dollars ($1,000) for each dependent of the debtor, not to exceed four thousand dollars ($4,000) total for dependents, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor."

This means basically that if my personal possesions are not worth more than $5000 all together, they can't take anything away from me, right? if that's the case then I would say I'm safe because our stuff all together is worth much less than that amount. But then there's an exemption to that rule:

"(d) Recent purchases. – The exemptions provided in subdivisions (2), (3), (4), and (5) of subsection (a) of this section are inapplicable with respect to tangible personal property purchased by the debtor less than 90 days preceding the initiation of judgment collection proceedings or the filing of a petition for bankruptcy, unless the purchase of the property is directly traceable to the liquidation or conversion of property that may be exempt and no additional property was transferred into or used to acquire the replacement property."

Which I guess means that I cannot buy anything no matter how small for now because if she gets sued it would be her property as well and they could take that away.

Now, one last question, and this is case they decide to sue me as well, since I was authorized in that account. According to the law in NC, wage garnishment is not allowed for this type of debt, but what if the judge authorizes to seize my checking bank account where my paycheck gets deposited? Wouldn't that be wage garnishment? I mean, can a judge do that, even if that's the money I use for paying bills and buying groceries?

Thanks

 

[Debt Guy]

OK. One last time. You are being way too anal about this. You are making yourself nuts worrying about something that has not happened yet and may never happen.

They are not going to take your stuff.

If you are only an authorized user, you are not liable for the debt. You can be sued. Heck, I could sue you. But, that does not mean I will win.

If you are sued, you must file a response with the court. If you play ostrich and stick your head in the sand, a judgment will be awarded and your bank account snarfed, even if you go hungry and can't pay your rent and utilities -- justice is blind, right?

If that happens you have only yourself to blame for not taking care of business as I am explaining to you. If you do what I have suggested, it will not happen.

Chill. Jeez.