topic Re: What’s the Worst that Can Happen? in General Credit Topics

What’s the Worst that Can Happen?

Queen_Etherea — Sun, 06 Oct 2019 19:58:41 GMT

Ok so I have a question about my fiancé’s parents. They’re both on a fixed income (Social Security) and are barely above the poverty level. They have 2 personal loans with their local credit union that they can’t pay anymore, and a car that’s way too far upside down and they’re going to just let it go as well.

So what is the worst that can happen to them if they stop paying the loans? I know the car will get repoed and the loans will go to collections, and they can possibly be sued by these creditors. However, since they have so little income, can their wages be garnished if they get a judgement against them?

They’re scared of what’s going to happen, and I just want to help put their minds at ease. They don’t give a flying hoot about their credit anymore, so low scores and collections on their records isn’t something they’re concerned about.

Also, we’re in California.

Thanks for your help and let me know if you guys need any more info.

Re: What’s the Worst that Can Happen?

chhull00 — Sun, 06 Oct 2019 20:05:06 GMT

they cant get their SS, but still can be sued.

Re: What’s the Worst that Can Happen?

Trudy — Sun, 06 Oct 2019 20:12:44 GMT

+1 regarding SS.

https://www.elderlawanswers.com/can-social-security-benefits-be-garnished-to-pay-debts--15460

Re: What’s the Worst that Can Happen?

DaveInAZ — Sun, 06 Oct 2019 20:32:06 GMT

As others have indicated their social security income can't be garnished or seized. But the credit union loans: do they do their banking - checking/savings - there? Credit Unions often have cross collateralization in their paperwork, meaning they can seize deposit accounts with them to offset loan losses. So if they do their banking there move the accounts elsewhere. Do they own their home or rent? Any significant assets such as jewelry or artwork? If the CU or car loan lender sue they can get a judgement enabling them to seize assets.

Re: What’s the Worst that Can Happen?

Queen_Etherea — Sun, 06 Oct 2019 22:24:17 GMT

@DaveInAZ

That’s the first thing I asked is if they had a checking/savings with that credit union and they said no. They have their checks direct deposited into Wells Fargo and BofA. All of the loans they have are with the credit union, though.

They rent a one bedroom apartment down the street from us for like $1,000/month.

They have nothing of real value. I know his dad has 2 storage units that he refuses to get rid of, and we have no idea what’s in them. I doubt there’s anything in there that could be considered valuable.

Re: What’s the Worst that Can Happen?

DaveInAZ — Sun, 06 Oct 2019 23:48:22 GMT

Well, sounds like they should be OK and no need for the expense of a BK, nothing anyone can take.

Re: What’s the Worst that Can Happen?

Anonymous — Mon, 07 Oct 2019 00:00:02 GMT

@Trudy ... excellent information and thank you for bringing it to the Forum. I for one never knew what they wrote!!!

Re: What’s the Worst that Can Happen?

SouthJamaica — Mon, 07 Oct 2019 11:41:18 GMT

@Queen_Etherea wrote:
Ok so I have a question about my fiancé’s parents. They’re both on a fixed income (Social Security) and are barely above the poverty level. They have 2 personal loans with their local credit union that they can’t pay anymore, and a car that’s way too far upside down and they’re going to just let it go as well.

So what is the worst that can happen to them if they stop paying the loans? I know the car will get repoed and the loans will go to collections, and they can possibly be sued by these creditors. However, since they have so little income, can their wages be garnished if they get a judgement against them?

They’re scared of what’s going to happen, and I just want to help put their minds at ease. They don’t give a flying hoot about their credit anymore, so low scores and collections on their records isn’t something they’re concerned about.

Also, we’re in California.

Thanks for your help and let me know if you guys need any more info.

It can get nasty when creditors start suing. My suggestion would be to go to a consumer bankruptcy lawyer. I think that would be the way for them to get peace.

Re: What’s the Worst that Can Happen?

Queen_Etherea — Mon, 07 Oct 2019 13:49:42 GMT

@SouthJamaica wrote:
@Queen_Etherea wrote:
Ok so I have a question about my fiancé’s parents. They’re both on a fixed income (Social Security) and are barely above the poverty level. They have 2 personal loans with their local credit union that they can’t pay anymore, and a car that’s way too far upside down and they’re going to just let it go as well.

So what is the worst that can happen to them if they stop paying the loans? I know the car will get repoed and the loans will go to collections, and they can possibly be sued by these creditors. However, since they have so little income, can their wages be garnished if they get a judgement against them?

They’re scared of what’s going to happen, and I just want to help put their minds at ease. They don’t give a flying hoot about their credit anymore, so low scores and collections on their records isn’t something they’re concerned about.

Also, we’re in California.

Thanks for your help and let me know if you guys need any more info.
It can get nasty when creditors start suing. My suggestion would be to go to a consumer bankruptcy lawyer. I think that would be the way for them to get peace.

What do you mean by "Get nasty"? If they get sued, they have nothing that can be taken away from them. Bankruptcies cost money, which is money they obviously don't have. Their biggest concern is just being able to pay rent and have money left over for groceries/medication. Is there maybe something out there that would help them pay for a bankruptcy lawyer if it came down to that? Is this something they could do on their own?

Re: What’s the Worst that Can Happen?

Anonymous — Mon, 07 Oct 2019 14:31:12 GMT

@Queen_Etherea wrote:
@SouthJamaica wrote:
@Queen_Etherea wrote:
Ok so I have a question about my fiancé’s parents. They’re both on a fixed income (Social Security) and are barely above the poverty level. They have 2 personal loans with their local credit union that they can’t pay anymore, and a car that’s way too far upside down and they’re going to just let it go as well.

So what is the worst that can happen to them if they stop paying the loans? I know the car will get repoed and the loans will go to collections, and they can possibly be sued by these creditors. However, since they have so little income, can their wages be garnished if they get a judgement against them?

They’re scared of what’s going to happen, and I just want to help put their minds at ease. They don’t give a flying hoot about their credit anymore, so low scores and collections on their records isn’t something they’re concerned about.

Also, we’re in California.

Thanks for your help and let me know if you guys need any more info.
It can get nasty when creditors start suing. My suggestion would be to go to a consumer bankruptcy lawyer. I think that would be the way for them to get peace.
What do you mean by "Get nasty"? If they get sued, they have nothing that can be taken away from them. Bankruptcies cost money, which is money they obviously don't have. Their biggest concern is just being able to pay rent and have money left over for groceries/medication. Is there maybe something out there that would help them pay for a bankruptcy lawyer if it came down to that? Is this something they could do on their own?

There could very well be pro-bono lawyers that assist the elderly with these types of matters . . . I'd see if any programs exist in their area.

It's just a nicer route to go instead of them being bombarded by phone calls and threats from collection agencies and what not. A BK for them sounds super simple . . could probably be done for $1k or less. Not sure how much family you have or if they have an ability to help, but running a small collection for Mom and Dad as a present could be feasible.

Re: What’s the Worst that Can Happen?

Anonymous — Mon, 07 Oct 2019 20:13:23 GMT

@Queen_Etherea wrote:
That’s the first thing I asked is if they had a checking/savings with that credit union and they said no. They have their checks direct deposited into Wells Fargo and BofA. All of the loans they have are with the credit union, though.

They rent a one bedroom apartment down the street from us for like $1,000/month.

Since they rent, i think it would be a good idea to resolve without anything going to collections. Or it could cause rental issues if they had to move one day.

Re: What’s the Worst that Can Happen?

SouthJamaica — Mon, 07 Oct 2019 21:21:07 GMT

@Queen_Etherea wrote:
@SouthJamaica wrote:
@Queen_Etherea wrote:
Ok so I have a question about my fiancé’s parents. They’re both on a fixed income (Social Security) and are barely above the poverty level. They have 2 personal loans with their local credit union that they can’t pay anymore, and a car that’s way too far upside down and they’re going to just let it go as well.

So what is the worst that can happen to them if they stop paying the loans? I know the car will get repoed and the loans will go to collections, and they can possibly be sued by these creditors. However, since they have so little income, can their wages be garnished if they get a judgement against them?

They’re scared of what’s going to happen, and I just want to help put their minds at ease. They don’t give a flying hoot about their credit anymore, so low scores and collections on their records isn’t something they’re concerned about.

Also, we’re in California.

Thanks for your help and let me know if you guys need any more info.
It can get nasty when creditors start suing. My suggestion would be to go to a consumer bankruptcy lawyer. I think that would be the way for them to get peace.
What do you mean by "Get nasty"? If they get sued, they have nothing that can be taken away from them. Bankruptcies cost money, which is money they obviously don't have. Their biggest concern is just being able to pay rent and have money left over for groceries/medication. Is there maybe something out there that would help them pay for a bankruptcy lawyer if it came down to that? Is this something they could do on their own?

1. By "get nasty" I mean all kinds of things, people haranguing them, people grabbing things, people serving subpoenas on them and on others, people calling them all the time, etc.

2. Consumer bankruptcies are cheap, and worth it.

3. There might be an agency that can help them through it. They or you should ask around. But if there isn't it's still a worthwhile thing to do. It will save them money, not cost them money.

4. No it's not possible for them to do it themselves if it's going to get done right, and give them peace instead of more agita.

Re: What’s the Worst that Can Happen?

RSX — Tue, 08 Oct 2019 21:23:07 GMT

Also monthly storage unit fees can be over$100/unit/month. I think that is an obvious way for them to free up some monthly cash.

I have advised multiple people, after learning the lesson in my 20's, that if you store $1000 worth of items for over a year, you could have bought them all over again after just one year

Units should only be used for sentimental items and in the smallest unit available. Or for short term use only.

Re: What’s the Worst that Can Happen?

Queen_Etherea — Wed, 09 Oct 2019 14:20:48 GMT

@RSX wrote:
Also monthly storage unit fees can be over$100/unit/month. I think that is an obvious way for them to free up some monthly cash.

I have advised multiple people, after learning the lesson in my 20's, that if you store $1000 worth of items for over a year, you could have bought them all over again after just one year

Units should only be used for sentimental items and in the smallest unit available. Or for short term use only.

Trust me, we've tried reasoning with him, but his dad has a problem with hoarding and won't let go. My fiance said he would always go to yard sales and buy a bunch of crap and then never do anything with it, so I'm assuming it's mostly junk in those units. He has a serious emotional attachment to these things and we just don't know what to do.

Re: What’s the Worst that Can Happen?

Queen_Etherea — Wed, 09 Oct 2019 14:23:18 GMT

@SouthJamaica wrote:
@Queen_Etherea wrote:
@SouthJamaica wrote:
@Queen_Etherea wrote:
Ok so I have a question about my fiancé’s parents. They’re both on a fixed income (Social Security) and are barely above the poverty level. They have 2 personal loans with their local credit union that they can’t pay anymore, and a car that’s way too far upside down and they’re going to just let it go as well.

So what is the worst that can happen to them if they stop paying the loans? I know the car will get repoed and the loans will go to collections, and they can possibly be sued by these creditors. However, since they have so little income, can their wages be garnished if they get a judgement against them?

They’re scared of what’s going to happen, and I just want to help put their minds at ease. They don’t give a flying hoot about their credit anymore, so low scores and collections on their records isn’t something they’re concerned about.

Also, we’re in California.

Thanks for your help and let me know if you guys need any more info.
It can get nasty when creditors start suing. My suggestion would be to go to a consumer bankruptcy lawyer. I think that would be the way for them to get peace.
What do you mean by "Get nasty"? If they get sued, they have nothing that can be taken away from them. Bankruptcies cost money, which is money they obviously don't have. Their biggest concern is just being able to pay rent and have money left over for groceries/medication. Is there maybe something out there that would help them pay for a bankruptcy lawyer if it came down to that? Is this something they could do on their own?
1. By "get nasty" I mean all kinds of things, people haranguing them, people grabbing things, people serving subpoenas on them and on others, people calling them all the time, etc.
2. Consumer bankruptcies are cheap, and worth it.
3. There might be an agency that can help them through it. They or you should ask around. But if there isn't it's still a worthwhile thing to do. It will save them money, not cost them money.
4. No it's not possible for them to do it themselves if it's going to get done right, and give them peace instead of more agita.

I've already warned them that they will probably get some nasty phone calls from collection agencies that will sometimes use illegal tactics to scare them into paying. It's happened to me more than a few times and I hate to think of that happening to them.

Thank you for your help! I think I'll talk to him about possibly filing bankruptcy for his parents.

Re: What’s the Worst that Can Happen?

Queen_Etherea — Wed, 09 Oct 2019 14:24:23 GMT

@Anonymous wrote:
@Queen_Etherea wrote:
That’s the first thing I asked is if they had a checking/savings with that credit union and they said no. They have their checks direct deposited into Wells Fargo and BofA. All of the loans they have are with the credit union, though.

They rent a one bedroom apartment down the street from us for like $1,000/month.
Since they rent, i think it would be a good idea to resolve without anything going to collections. Or it could cause rental issues if they had to move one day.

They're not moving any time soon. If they do move, it will be in a house with us. His parents are very old and their health is dwindling by the day.

Re: What’s the Worst that Can Happen?

CJ7 — Fri, 11 Oct 2019 05:37:38 GMT

If they wind up defaulting, have them save themselves countless headaches by

either changing their phone number or turning off voicemail and refusing to

answer calls from unknown numbers. Getting nasty letters in the mail is one thing,

fielding repeated collection calls at all hours can wear even a young person out.

Re: What’s the Worst that Can Happen?

Queen_Etherea — Tue, 03 Dec 2019 15:17:55 GMT

@CJ7 wrote:
If they wind up defaulting, have them save themselves countless headaches by
either changing their phone number or turning off voicemail and refusing to
answer calls from unknown numbers. Getting nasty letters in the mail is one thing,
fielding repeated collection calls at all hours can wear even a young person out.

My husband actually changed their numbers not long after I posted this. Definitly a good idea!

Re: What’s the Worst that Can Happen?

Queen_Etherea — Tue, 03 Dec 2019 15:25:40 GMT

Ok so I have another question... Husband's parent's car ended up getting repo'd the other day. About a day or two later, my husband's car finally died and we bought him a new one. We were able to fix the old car for next to nothing thanks to his sister's boyfriend and he wants to give it to his parents. So if he were to transfer the title over to them, would any of these banks be able to sieze this car? It's 100% paid off, but we're just worried about all the things that are going to go to collections and don't want to leave them without a car again.

Re: What’s the Worst that Can Happen?

CJ7 — Tue, 03 Dec 2019 15:56:15 GMT

@Queen_Etherea wrote:
would any of these banks be able to sieze this car?

The laws are likely different in every state, but I believe the general rule is they can't grab your primary vehicle.

Maybe someone else could chime in with more knowledge about the matter.