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Roger
Roger, Attorney
Category: Bankruptcy Law
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Can I force someone who owes me money into bankruptcy A garnishment on hi

Resolved Question:

How can I, as a personal creditor, force someone who owes me money into personal bankruptcy? Should I first hire a collection agency?

Here is the situation. I loaned a man a lot of money and it was secured by a second deed of trust on two of his investment properties.
Those properties are now "under water", meaning his first mortgage loan balances are greater than the market value on these properties.
He stopped paying the first mortgages last February. But he continued to pay me until July 1st.
I was notified in July by the two first mortgage lenders that they had started foreclosure proceedings.
If there were any equity in the properties I would bring the first loans current and foreclose myself. But there is no equity.
He is a Mexican hard working man, and speaks no English. I got into this position through a mortgage broker whom I trusted.Do I need a lawyer? If so what should be his/her specialty?
Approximately how much will it cost?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Roger replied 5 years ago.

It is possible to force a debtor into involuntary bankruptcy. The requirements for placing a debtor into an involuntary bankruptcy are spelled out in Section 303 of the federal Bankruptcy Code. Virtually any debtor is eligible - whether an individual, partnership, corporation, or trust - except farmers and non-business corporations. A debtor is eligible if it meets either of two tests: (1) it is generally not paying its debts (other than those that are the subject of a bona fide dispute) as they become due, or (2) a custodian has been appointed during the last 120 days to take charge of substantially all of the debtor's property. Once proof of either of these two circumstances is made, the bankruptcy court must place the debtor into bankruptcy for liquidation of its assets (Chapter 7) or court-supervised reorganization (Chapter 11).

 

If he meets these requirements, then you can do this. However, you will need an attorney. Prices vary depending on how much of a fight the debtor puts up. My experience is that this will cost no less than $3000.00 to go through the entire process.

Customer: replied 5 years ago.

Can I get a garnishment on his wages? Is it different in California vs. Mississippi?

Thank you

Expert:  Roger replied 5 years ago.

The bankruptcy code is federal law, so it applies to every state evenly.

 

If you don't want to go this route, you can garnish his wages. However, in order to do so, you have to get a judgment against him first. Once the judgment is endered, you can file a suggestion for writ of garnishment and a writ of garnishment.

 

My suggestion is to hire an attorney to sue the debtor, get a judgment and then get the garnishment going. The attorney's fees should be recoverable in the garnishment action.

Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 26165
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by West
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