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Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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I am being sued by a credit card company for non-payment. The

Customer Question

I am being sued by a credit card company for non-payment. The summons says I have several options, arbitration, mediation, neutral evaluation, and settlement conferences. Which is the best way for me to go? Also we are financially strapped. If they garnish my wages I won't be able to pay the rest of my bills. Help!
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 6 years ago.
Hello,

Thank you for your question. I am happy to assist you.

I am a lawyer with 25 years experience. While I am not your lawyer and do not represent you, I will endeavor to provide you with legal information through this open and nonconfidential forum.

Typically a settlement conference or mediation would be the most economical. However that said, if you owe the credit card company money they will likely prevail.

Instead you may want to consider a chapter 7 bankruptcy. I will explain.


As an individual, there are two types of bankruptcy available. A Chapter 7 and a Chapter 13. There are distinct differences in between a Chapter 7 and a Chapter 13 bankruptcy.



A Chapter 7 bankruptcy could discharge (erase) all of your unsecured debt such as credit cards, judgments and personal loans. It would be an opportunity for a fresh financial start. However, you may have to surrender assets, if any, that exceed your exemption.



A Chapter 13 bankruptcy is a repayment plan for an individual. It may require that you repay some of your unsecured credit card debt over a 3 -5 year period. However, you may retain assets that exceed your exemption.


Here are the exemptions for California:
http://www.bankruptcyinformation.com/CA_exemp.htm
Customer: replied 6 years ago.
When you say the credit card company will prevail. How will they get their money? Will they garnish my wages regardless if it leaves me without enough money to pay my existing bills? Will the amount I can afford be taken into consideration or do they have the say in the amount? Also on Chapter 7, what assets are you speaking of?
Expert:  Ellen replied 6 years ago.
When you say the credit card company will prevail. How will they get their money?
Garnish wages or attach assets

Will they garnish my wages regardless if it leaves me without enough money to pay my existing bills?
Yes

Will the amount I can afford be taken into consideration or do they have the say in the amount?
25% may be garnished

Also on Chapter 7, what assets are you speaking of?
Here are the assets you can keep:
http://www.bankruptcyinformation.com/CA_exemp.htm
Customer: replied 6 years ago.
I looked up the sight. Basically the only asset I have is my home. Please explain in lay terms how a chapter 7 efects my home?
Expert:  Ellen replied 6 years ago.
You may keep your home if you continue to pay the mortgage and the equity is less than 75K
Customer: replied 6 years ago.
My home has more than 75K in equity. What options do I have so I don't have to liquidate my home? Are there other options other than chapter 7 or 13?
Expert:  Ellen replied 6 years ago.

http://www.bankruptcyinformation.com/CA_exemp.htm

The exemption is $50,000 if single and not disabled; $75,000 for families if no other member has a homestead, $125,000 if 65 or older, or physically or mentally disabled; $100,000 if 55 or older, single and earn under $15,000 or married and earn under $20,000
Customer: replied 6 years ago.
So in other words in order not to have to liquidate my home. I need to file chapter 13.
Any other alternatives?
Expert:  Ellen replied 6 years ago.
Not that I see.Sorry
Customer: replied 6 years ago.
Should I try to negotiate with my creditors?
Expert:  Ellen replied 6 years ago.
Yes you may negotiate with your creditors. The creditor that has filed suit against you may not be willing to negotiate at this time since suit has been filed.