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What’s the Worst that Can Happen?

Established Contributor

What’s the Worst that Can Happen?

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. Heart
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Message 1 of 24
23 REPLIES 23
Frequent Contributor

Re: What’s the Worst that Can Happen?

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



Message 2 of 24
Established Contributor

Re: What’s the Worst that Can Happen?

+1 regarding SS.

 

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

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Message 3 of 24
Senior Contributor

Re: What’s the Worst that Can Happen?

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.

Message 4 of 24
Established Contributor

Re: What’s the Worst that Can Happen?

@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.
I think I've found the sacred map that may lead me to this garden everyone keeps talking about.



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 5 of 24
Senior Contributor

Re: What’s the Worst that Can Happen?

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

Message 6 of 24
Moderator Emeritus

Re: What’s the Worst that Can Happen?

@Trudy ... excellent information and thank you for bringing it to the Forum. I for one never knew what they wrote!!!
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Message 7 of 24
Super Contributor

Re: What’s the Worst that Can Happen?


@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. Heart

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.


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Message 8 of 24
Established Contributor

Re: What’s the Worst that Can Happen?


@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. Heart

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? 

I think I've found the sacred map that may lead me to this garden everyone keeps talking about.



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 9 of 24
Valued Contributor

Re: What’s the Worst that Can Happen?


@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. Heart

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.

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Message 10 of 24
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