Discover suing me

No, this is actually the last thing that they want. What they really want is for you not to show up in court, so they can get a default judgement. Not all states require you to sign for the summons when you receive it. Just for kicks, check with the county court and see if there really is a case. There probably is, but it is a curiosity. If bk is necessary, it will discharge the debt, even if they get a judgement against you. It is a last resort, so do not rush into it. It has far reaching effects, and you want to make sure you know all of the ups and downs.

Thanks. I am self employed and my monthly income just is not dependable enough since this time last year to make any settlements. My spouse has a great job but is just as maxed out and hanging on by skin of teeth (we've always kept everything separate so they only pay "their own" bills). We can't get our cars fixed, take a pet to the vets or go to the dentist ... so I'd say something needs to be done. I've just been waiting for someone to serve papers so that spouse would have to go with me to bk attorney instead of ignoring my plight. We inquired abt BK 6 mos ago and were told because of his salary we didn't qualify for ch 7 but they don't take into acct because of his debts we can't settle anything either ...

If you don't qualify for chapter 7, then you would have to do chapter 13. This way, you would pay a portion of what you owe, and the balance would be discharged. To qualify for chapter 7, the amount of your debt does not even come into the picture. It really is a simple formula. If you make more than the median income for your size family in the part of the state you live in, then you have to take a means test. This will determine if you have any disposable income. The results of this test will determine in you qualify or not. There are several sites online that let you take a means test (rough) to see if you qualify. You may want to find one of these, and put all of your numbers in, and see what comes up.

I just checked and - the case is NOT listed in the case look up on the internet - maybe too soon - or MAYBE they don't actually file until they talk to me first - that's why they called ????

Thanks for more advice - you are MUCH smarter than I if you think the means test is simple : ) - the first BK attorney we went to only did Ch 7's and she told me repeatedly that she could get it through and then SHE got confused and backed down. Saying we would need a Ch 13 attorney. Every time I've done the means tests online myself it seems to work out but it is very tricky - maybe because I am self employed? There is a box about "Salary" vs "income" - and there is no easy button to press for the taxes I have to pay ... I really do appreciate your help on this though - just to have someone to bounce ideas off if is a relief.

Don't do 13, if you have to do bk it has to be 7 or debt settlement.

as someone who has worked in collection litigation i assure you that the fact that you got a call on the same day as a summons is pure coincidence - ESPECIALLY if it is sent reg mail (usually cert mail as well). There really is no way to know when exactly you will receive the summons.

Guest59 - Why? My understanding is Ch 13 amounts to debt settlement and it's all official and the companies can't back out of it later - also, I will NEVER have the large amts of cash any settlements require. Nor would I be able to pay the taxes that come with getting $150k in debt cut in half or less.

Guest: it was hand delivered by a "sheriff" they left their card - so they certainly might have called the collection agency to say "it's been done".

So thanks anyway -

I agree. 13 is better than DS in some cases. If you try to settle, I can almost guarantee that you will be sued by many of your creditors because of your husband's income. I am glad you saw past that.

It's hard to qualify for 7 these days. But as far as the means test goes, it uses your income in the 6 months previous to filing.

Also, keep in mind that just because you have debt collectors after you, doesn't necessarily mean bankruptcy is the right path for you. Instead of speaking with a bankruptcy lawyer, you should also meet with a consumer defense attorney in your area. They won't push you into bankruptcy the way a purely BK atty will (because for BK attys, if you don't file, they don't get any $, so they usually push you to file).

Don't forget to file and serve an answer. If you don't retain a lawyer, go down to your local courthouse and ask the clerk for a pro se answer form to fill out.

Thanks Chrys - trying to do the means test on your own is DEPRESSING! The numbers they end up with - like "you can pay your creditors $2000 a month for the next 5 years" is dismal! As I said, we have no money now for vet bills, dentists, car repairs AND I forgot to mention, we are reduced to putting oil in our furnace in 10 gallon jugs - can't pay for a full delivery. So I am concerned that filing ch 13 will amount to putting us in indentured servitude for 5 years and that this won't get any better.

That is quite the conundrum. You used only your income (if you do not live in a Community Property state), are you filing for yourself alone?

The estimated payment is based on an assumption of what you will make in the next 5 years. (What are they, prophets?) That's the problem with stupid laws like the 2005 bankruptcy hack job (insultingly named "reforms") - they hurt those in the middle the most. Just to stop a few people from abusing the system, they gladly hurt many more. It's really upsetting to me.

Community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

Also, here is the Federal Gov't page on BK 13. This is the US Bankruptcy Trustee page. There are Federal exceptions, and each state has their own exceptions for assets, which may improve the estimated monthly amount somewhat.

mmurtha,

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The problem with 13 is most of the time something will happen, like the dentist or furnace and you won't be able to make your payment. You are not able to stay on the payment program and you will have this BK on your record and you will be right back where you started.

True, but the payment plan in 13 is not chiseled in stone.
Hardship Discharge.

@Chrys: Most consumers go to bankruptcy attorneys, because they are the ones advertising that they can help consumers get creditors off their backs, resolve their debts, etc. I was making the point that there's plenty of ways to do that without filing for bankruptcy. Especially if there's a decent income flow in the household. Filing for bankruptcy is a drastic decision that will affect the rest of their lives. It's not something to take lightly, and should be used purely as a last measure, IMHO.

That goes without saying. In this case, however, it's either that or creditors arguing over who gets judgment enforcement preference. Please note: $150K debt. That's around $75K cash need for settlements. Are you suggesting that is better for them to get their pants sued off and thrown out of their home? If they can't afford $2000 a month (which is 37.5 months - over 3 years for $75K) then how can they settle?

Let's wait for the OP to respond to my questions - whether they are in a Community Property state, and whether the Means Test only included her assets/liabilities before we jump to conclusions.

Thank you for giving this question so much attention - I really appreciate it - OK - here's my thought -

If there is ANY way to get through this upcoming summons without making things worse - some way to stall them - then what if I closed my home business or at least significantly reduced my income - (this is something that can happen to me at any moment anyway - if a clients chooses to drop me or doesn't renew) - can I possibly DRAGGGG this out for 4 or 5 months - so that my 6 month income is squat - that leaves my husband's income at only $1,000 a year more than the state median - still would look like it *has* to be a ch 13 but maybe not??? Any thoughts on this? Thanks.

Sorry - I didn't see Chry's last post before I wrote the one above - OK - we are in CT - not community property and I used BOTH to do the means test. The one atty we spoke with 6 months ago seemed to do that but she had so many "expenses" that she kept pulling out of her butt that she was like "OK only $148 more dollars to go and you'll make the test - " but then she gave up. I do not know her well and it gave me the impression that an atty who was really working for YOU - would come up with some strategy. See my last post above - like I wish she could have told me 6 months ago - "if you close your business now - in 6 months you'll make the means test" or something. I was also wondering about making my company an LLC and then paying myself a small salary - that would bring down my income a lot - I could even put my teen ager on the payroll so that when bk comes I wouldn't have to worry about not having money for his expenses ... any thoughts on this? Would this be seen a some kind of fraud? One of my biggest fears is that if I keep my business going through Ch 13 I will not be able to have any money to nurture it - to take care of those things like making it an LLC or growing it with investment - lol how's that for the govt' law changes in 2005 "accidentally" shooting a Republican in the foot?

just commenting to keep this on the top of the topics - looking forward to hearing more from Chrys and mmurtha. Thanks.

LOL - re reading my above posts makes it sound like I'm some billionaire looking for a tax loophole - please know that I only make about $20,000 a year with this home business - and out of that around $4,000 goes to business expenses. So it's not a lot of money but it buys groceries and gas.

Hoping to hear more from Chrys and mmurtha ...

still hoping for more input

till hoping for more input

still hoping for more input

Hi, my apologies, I have been ill for a few days.

Well, you ask the type of questions that would be highly irresponsible for anyone without complete knowledge of your situation to answer.

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Thanks Chrys - I'm sorry my questions were out of line.

It is a catch 22 - if I close my biz and get to go ch 7 by myself - closing my biz will cause hubby to go bk also - he has NO money left over after paying his own bills. Well, I guess the lawyer will tell us this week.

No, not exactly out of line. It's just that the situation is complicated and makes it a challenge to give general information, they are specific enough to be possibly construed as legal advice. Hopefully you got a smart lawyer who can help you avail yourself of the proper debtor protection strategy that you need. The best of luck to you!