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Garnishment 60k advised to file bankruptcy

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Garnishment 60k advised to file bankruptcy

I’ll be short. Bought a house(rental property) 11/12 years ago in my early 20s. Got married hit rough patch. Ex husband lost his job. Filed for chapter 13. Rental house was included in unsecured debit and basically given back. We did not complete the bankruptcy bc we ended up divorcing. Chapter 13 was dismissed about 7 years ago. I do not know what happened to the rent house. I don’t know if it
Was written off or sold. Since then I have rebuilt my credit. It is perfect. No blemishes. Higher 700s. I received a letter stating bank won a garnishment for rent house 60k. It would be about 1300 a month. I would not have enough to cover bills. I also have a kid in college that I pay for. New house. My own Student loans. I hated how it felt when my credit sucked. Spoke with a lawyer who advised there was nothing I could do and I needed to file another bankruptcy. So do I do it. Or struggle to live for the next 6 years. I thought about calling and asking will they take a settlement. Please advise. I’m so upset.
Message 1 of 16
15 REPLIES 15
Community Leader
Super Contributor

Re: Garnishment 60k advised to file bankruptcy

oh boy.Smiley Sad Sorry for you situation, and Im gonna let a few others that have been thru this pipe in here. If they got a garnishment, that means they filed a judgement on you awhile back, and you had a court date. Did you go to the court date? Me personally, I think the only way to stop this garnishment is to file, and it would be  BK7 if you can qualify for it.  If your attorney suggested that this is the only way to stop it, then I would think he knows betters than us. 


My rebuild worked for me, but won't necessarily work for you!
BK7 D/C- 08/2013
Message 2 of 16
Contributor

Re: Garnishment 60k advised to file bankruptcy


@Glgkbh wrote:
I’ll be short. Bought a house(rental property) 11/12 years ago in my early 20s. Got married hit rough patch. Ex husband lost his job. Filed for chapter 13. Rental house was included in unsecured debit and basically given back. We did not complete the bankruptcy bc we ended up divorcing. Chapter 13 was dismissed about 7 years ago. I do not know what happened to the rent house. I don’t know if it
Was written off or sold. Since then I have rebuilt my credit. It is perfect. No blemishes. Higher 700s. I received a letter stating bank won a garnishment for rent house 60k. It would be about 1300 a month. I would not have enough to cover bills. I also have a kid in college that I pay for. New house. My own Student loans. I hated how it felt when my credit sucked. Spoke with a lawyer who advised there was nothing I could do and I needed to file another bankruptcy. So do I do it. Or struggle to live for the next 6 years. I thought about calling and asking will they take a settlement. Please advise. I’m so upset.

Did you call your original bankruptcy attorney about the status of this house when your 13 was dismissed? who got the rental house in the divorce? Surely a house didn't just disappear, someone reamined responsible for it. What is the judgement for? Unpaid mortgage? Did the bank forclose on it, and 60k is the balance after resale? Any chance you are in Pa Tx NC or SC? What state are you in? Also it is very unlikely your garnashment can be 1300 a month UNLESS your net take home pay is over 6000$/month. Wage garnishments can not be more than 25% of your disposible income. Do you claim head of household on your taxes? 

Message 3 of 16
New Member

Re: Garnishment 60k advised to file bankruptcy

- did not contact original bankruptcy lawyer. They were kind of flaky lots of turn over during the process
- it was a rental. Kind of a fixer upper. Not sure if it was sold or if the bank couldn’t sale it. We tried and couldn’t
- we paid the bankruptcy about 2.5 years before we got divorced and stopped paying.
Bankruptcy was dismissed. Not discharged. There was no follow up. It was including in give back items.
- I live in NC but garnishment is from Another state. I moved shortly after divorce.
-60k is full amount of house
-don’t qualify for chapter 7 it will have to be 13
Message 4 of 16
New Member

Re: Garnishment 60k advised to file bankruptcy

Yes i claimed head of house hold last year but got remarried in April. Not sure how that works now. He will not be filing.
Message 5 of 16
Contributor

Re: Garnishment 60k advised to file bankruptcy


@Glgkbh wrote:
- did not contact original bankruptcy lawyer. They were kind of flaky lots of turn over during the process
- it was a rental. Kind of a fixer upper. Not sure if it was sold or if the bank couldn’t sale it. We tried and couldn’t
- we paid the bankruptcy about 2.5 years before we got divorced and stopped paying.
Bankruptcy was dismissed. Not discharged. There was no follow up. It was including in give back items.
- I live in NC but garnishment is from Another state. I moved shortly after divorce.
-60k is full amount of house
-don’t qualify for chapter 7 it will have to be 13

Usually you are only sued for the deficency, Example mortgage is 100k and during foreclosure bank collects 50k, they will sue you for 50k. Highly unusual for you to owe the entire 60k mortgage, if you owed the entire mortgage does that mean you still own the house outright? If 60k was 100% of the value of the house, and 60k was owed, did you have PMI? PMI should have paid the deficency. What is your annual income? What state was the judgement obtained in? Usually you can settle a judgement if you have a large enough sum to pay in cash. If you file bk 7/13 there will still be a lein placed on your home for the amount of the judgment, that you would need to appeal. Usually the appeal is granted if the lein would prohibit you from taking your full equity that is exemptable. 30k in NC, or 25K federal. You will need a new attorney to walk you through everything there are a lot of nuances.

Message 6 of 16
Senior Contributor

Re: Garnishment 60k advised to file bankruptcy

It is very rare for lenders to seek deficiency judgements on houses.  The have to deduct balance of what house brought on foreclosure.

There are guidelines about how low they can go on the foreclosure sale . They would have to serve you to get the judgement.   I see many issues with your situation.     Did some body like you or ex do something to hack these peole besides the bk? 

Message 7 of 16
New Member

Re: Garnishment 60k advised to file bankruptcy

So found out more information. Spoke with bank. Original loan was 43k house sold for 18900. Apparently sued for deficiency. I was never served. This was in 2008. Granted garnishment for remainder of 24k and daily fees of 10 dollars a day for 11 years this year. Around an extra 40k. So 3 times what is owed. They said to offer them a settlement. I offered 15k which is like 60% of what is owed the 24k. Bank Got back to me and said her boss would only do 50% of the 62k. So like 30k. Again I can not afford this. Was going to do a 401k loan for the 15k. She asked could I do a payment plan for a year then retry to get a settlement. That she would have more leeway to get a lower amount. Wants me to pay 125 dollars a month for a year the retry to get a lower settlement. So 1500.

Spoke with a lawyer. Basically said don’t pay them. File chapter 13. When all this happened we did a cash for keys for our main home. So gave up 2 houses. She wants us to include that in bankruptcy as well to make sure they don’t come back. So cover both houses. With all my debit cc included payment would be 350-400 a month for 5 years so 24k. But chapter 13 on my perfect high 700 credit. 7 years of bs.

Not sure if I should trust them with the payment plan the still have to file in a year.
Message 8 of 16
Senior Contributor

Re: Garnishment 60k advised to file bankruptcy

@Glgkbh        With out valid service the present deficiency is worthless     I would hire a CONSUMER ATTORNEY

file a civil suit against them for fdcpa violations      They will have to pay your attorney fees.

My offer to them is you pay my attorney fees (anywhere  from $5K to $20K and pay me $1K)   If you really want to make it dicey file a civil malpractise also  suit against the attorney if they tried to garnish your wages .  Use same attorney and ask for 1) disbarment  and 2) in damages of lets say only $1,000,000.   His e/o provider will kick in a work out a settlement.      What the original person will due is try to lie about service on the deficiency.    I have sued an attorney for malpractise and won .   Consumer Attorney is a very specialized certifcation 

 

Message 9 of 16
Frequent Contributor

Re: Garnishment 60k advised to file bankruptcy


@Backwoods wrote: With out valid service the present deficiency is worthless     I would hire a CONSUMER ATTORNEY file a civil suit against them for fdcpa violations     

 


FDCPA does not apply to the lender and it appears OP is being chased by the lender (bank) - although it would apply to the lender's outside attny as opposed to in-house counsel.  Further, unless and until the judgment is set aside it is valid and enforceable, regardless of the original service. 

 

If the judgment was domesticated in the State where OP now lives, the creditor is free to do whatever State law allows to collect until OP either files bk or gets a the judgment set aside.  I make no comment on how setting aside a judgment is done and/or whether or not OP would have to put up a bond to get a court to issue an injunction on collections while litigation proceeds.  Remember, for all we know, OP was originally served by court approved publication.   OP would have to pull the original court file to see how service was made before even thinking about attempting to set aside the judgment.

 

Des.

Message 10 of 16
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