Just retired and in trouble

[Buddy57]

California, retired last year and have 8 credit cards with limits maxed out from $1000 to $5000, my only income is Social Security of $1200, all I have is a 15K car, what is the timeline of the process for collections/judgements? I am 90 days late, have 0 cash, can I should I sell the car now?
Will I lose in through a judgement?

 

[quincy]

California, retired last year and have 8 credit cards with limits maxed out from $1000 to $5000, my only income is Social Security of $1200, all I have is a 15K car, what is the timeline of the process for collections/judgements? I am 90 days late, have 0 cash, can I should I sell the car now?
Will I lose in through a judgement?

You could sell the car now, pay off any balance owing on the car, and use whatever is left to payoff or pay down your other debts.

If your only source of income is from social security benefits, however, and you have few other assets, you could be judgment proof - which means that even if a creditor were to sue you and win a judgment against you, there would be no way to collect on the judgment.

Another option is to file for bankruptcy, wipe out all debts, and move on.

 

[adjusterjack]

Will I lose in through a judgement?

Possibly. CA exempts $3325 of the value of the car from judgment. If you don't owe anything on the car, the judgment creditor can take the car, sell it, pay you the $3325 and apply the rest to your judgment. Anything over the amount of the judgment also goes back to you.

https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CCP&sectionNum=704.010.

Do you still have a loan balance on the car or is it paid off? The larger the loan balance the less likely for the car to be attached.

 

[LdiJ]

Possibly. CA exempts $3325 of the value of the car from judgment. If you don't owe anything on the car, the judgment creditor can take the car, sell it, pay you the $3325 and apply the rest to your judgment. Anything over the amount of the judgment also goes back to you.

https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CCP&sectionNum=704.010.

Do you still have a loan balance on the car or is it paid off? The larger the loan balance the less likely for the car to be attached.

I think he was saying that he was 90 days late on the car, so that implies a loan.

 

[adjusterjack]

I see that now.

Unfortunately, most car values depreciate faster than loan balances so he might not be able to sell it for enough to pay off the loan.

 

[quincy]

The car is likely to be repossessed if Buddy57 can’t sell it for what is still owed.

It sounds as if Buddy might be judgment proof - depending in large part on the assets he has accumulated. With the amount of credit card debt he has, one wonders for what the credit was used. If the credit cards were used to cover the costs of food and other essentials, that is one thing. If the credit cards were used to purchase unnecessary goods, that is another thing. Goods potentially can be seized and sold to satisfy any judgment.

Buddy57 would be smart to sit down with a financial aid counselor to discuss his options, one of which is bankruptcy.

 

[zddoodah]

what is the timeline of the process for collections/judgements?

Your creditors can sue you at any time. Depending on if and how you resist, and depending on the county where you live, a creditor who sues you may be able to obtain a judgment in four months, or it could take much longer.

can I should I sell the car now?
Will I lose in through a judgement?

I've never heard of a judgment creditor executing a civil money judgment against a judgment debtor's personal vehicle. You might want to consider unretiring and/or consulting with a bankruptcy attorney.

I think he was saying that he was 90 days late on the car, so that implies a loan.

OP, you should clarify this.

 

[quincy]

He could be 90 days late on only the credit cards. If he owns the car outright, that could be helpful to him. He potentially could sell the car and purchase a cheaper one for cash. The less value in the car (even if it is over the $3325), the less likely a judgment creditor is to bother with it.

 

[SarahSpringer]

The best option is to consult with a lawyer, and also, first of all, I advise you to start from the possibility of filing for bankruptcy. The sale of the car and the repayment of credit debts at any time of the pre-trial proceedings is also possible, but I advise you to do it later!

 

[quincy]

The best option is to consult with a lawyer, and also, first of all, I advise you to start from the possibility of filing for bankruptcy. The sale of the car and the repayment of credit debts at any time of the pre-trial proceedings is also possible, but I advise you to do it later.

Speaking with a financial counselor first would be smart. A bankruptcy would not be necessary if Buddy is judgment proof.

If Buddy is over the age of 60, he can find legal and financial assistance through the following California government link:

https://aging.ca.gov/Programs_and_Services/Legal_Services/