What do I do now?

[admittingscared]

Need help ASAP re: complicated cc judgment situation!

What is the name of your state? Virginia

My husband has a judgment from Discover. They tried to garnish his wages, but he no longer works for the company listed on the garnishment. He now owns his own small business (sole proprietor). The business is not making much money and has very little in the way of assets -- a truck and some tools worth under $2,500. We jointly own a '94 minivan. The deed to our house is in my name, but the loan (from refinancing) is in both names. We have some equity (@ $45,000) in the house. We jointly own a timeshare. I have some stocks & a money market account received from inheritance. He also has 2 other cc (MBNA & Chase) which have recently been charged off but are still in the collections process. The house was purchased before we married, but the other assets and cc were all acquired since we were married. He has a court date for this Mon. the 13th. I've been researching our options and am considering having him (only) file Chapter 13. Is this the way to go? Will this protect our house? Should he include the other 2 cc in the Chap. 13? If he doesn't include them now, can a Chap. 13 be amended later to include these cc, if the need arises? If Chap. 13 is not the answer, what should we do? Thank you for the assistance.

 

[Ladynred]

If the house does not have his name on it, its not his asset and no creditor can touch it, as long as the debt is only in HIS name. The equity would be safe in a CH 13 as well, but would be safe anyway.

He must include ALL debts in a bankruptcy filing, you can't pick and choose. He'll have to include all individual and joint debts. I suggest he consult with a BK attorney to find what his best option is, though with the timeshare in both names, that would be vulnerable in a Ch 7.

VA is NOT a community property state, so you are in no way liable for HIS sole debts.

 

[admittingscared]

What do I do now - thank you.

Thank you Ladynred for the information. May I ask another question -- about his court appearance Mon., can they garnish his business for the judgment or will they try to force him to sell his truck and tools? What should we do about this? Thanks again!

 

[Ladynred]

There are exemptions from judgments and tools of the trade are usually exempt to some degree. As a sole proprietor, his business is vulnerable I'm afraid.

In VA exemption is:

tools of trade, books, machinery, motor vehicles, $10,000;

So, is truck and tools just might be safe if within that value.

Other VA exemptions are:

In general, a debtor may claim exemption of his homestead and certain personal property from attachment and execution of a judgment, or in a bankruptcy proceeding. Virginia permits every householder exemption
of:

* real property (homestead) from creditor process arising out of a debt, an amount up to $5,000.00 in value,
* an additional $500 in value for each dependent. (VA Code 34-4.)
* Additional property for a disabled veteran, $2,000.

In addition, Virginia provides certain enumerated poor debtor's exemption. Some of these exemptions include:

* the family Bible,
* unused homestead, $5,000;
* wedding and engagement rings, family portraits and heirlooms not to exceed $5,000.00 in value,
* burial ground,
* wearing apparel, $1,000;
* household furniture and furnishings, not to exceed $5,000 in value. (VA Code 34-26.);
* tools of trade, books, machinery, motor vehicles, $10,000;
* motor vehicle for household use, $2,000;
* Farmer's equipment, $4,000;
* exempt property of decedent, $15,000;
* homestead allowance for surviving spouse, $15,000;
* Court award or settlement proceeds from personal injury or wrongful death actions generally are also exempt. (VA Code 34-28.1.)

At some point he will have to claim his exemptions to protect his things.