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Richard
Richard, Attorney
Category: Business Law
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Experience:  32 years of experience practicing law and a businessman.
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Somebody owes a large sum of money to different banks and

Customer Question

Somebody owes a large sum of money to different banks and credit cards. She applies for bankruptcy. Bankruptcy is denied. What happens to her if she has no money nor assets to repay?
Submitted: 4 years ago.
Category: Business Law
Expert:  Richard replied 4 years ago.

Good evening. Being judgment proof is pretty much the same as being bankrupt....because they can't get what you don't have. So, you simply do nothing and let the statute of limitations on the debts run...then they are no longer collectible. You want to keep money out of bank accounts in the meantime so they can't grab your money and it might be helpful to move to a state such as PA, SC, NC, or Texas because those states do not allow your wages to be garnished.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 4 years ago.
Thank you for your answer that has been very useful. My friend still needs to know if she should be worried when she goes in and out of the country. She is an american citizen and, is it possible that they could stop her when she goes to Europe or when she comes back?
Expert:  Richard replied 4 years ago.

You're welcome...she need not worry. Being unable to pay one's debts is not a criminal offense and has no impact on the ability to leave or enter the country.

 

I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.

Customer: replied 4 years ago.
Hi there and thank you very much again. My friend is still worried and asking me to ask you if there is any amount of debt that could trigger any kind of further action by the banks that we are unaware of ( she owes 200.000 unsecured debt). As I already mentioned, she does not own any money or assets, lives just by subletting her rented apartment and restricting herself in one single room. For grocery shopping she uses food stamps. Thank you so much again. Silvia Heimpel
Expert:  Richard replied 4 years ago.

Absent a suit for fraud, which is very difficult for the bank to prove, the bank simply loses out...you can't get something that is not there. Simple as that.

 

I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.

Richard, Attorney
Category: Business Law
Satisfied Customers: 47065
Experience: 32 years of experience practicing law and a businessman.
Richard and other Business Law Specialists are ready to help you
Customer: replied 4 years ago.
Hi there, I closed a conversation a few hours ago on this issue, but my friend, is still in need of support on this issue and is asking me to contact you again. Please refer to our previous conversation to recall what was already talked about. My friend had a hearing with the trustee for bankruptcy yesterday and at the meeting it was concluded that she didn't have sufficient information about her assets (that are non existent). The question was how she is able to feed herself, maintain a roof over her head, pay utilities and survive, without a declared income and being the owner of a business (that has been shut down) which was declaring an approx. $40,000 loss carried over from the last two previous years. A new date was set for an ulterior meeting in a month from now. Considering all the above, including the alternative of just dropping out of sight, what are the steps to take with the appointment with the trustee and what do you suggest should be her next step? Thank you very much and kind regards, XXXXX XXXXX

 



Already Tried:
This is the continuation of a conversation closed earlier this afternoon, please refer to that conversation for more information or do not hesitate to ask me again. Thank you.


Expert:  Richard replied 4 years ago.

This is a common issue because trustees are used to people hiding assets. What your friend will need to do is substantiate how she lives. If she truly has no assets, she must be either borrowing money or being gifted money. She needs to present substantiation of these loans/gifts to the trustee.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 4 years ago.
My question now is the following:

After having proved that she does not have any assets, or hidden income beyond her minimum survival necessities that come from food stamps and, subletting two rooms in an appartment that she rents:
1- does she still have the option to avoid bankruptcy and just wait for the statutes of limitations to kick in without worrying to be destroied by further harassment?
2- What is actually the minimum possession and income allowed by the courts
if the banks decided to take her to court?
3- Should she drop bankruptcy procedures all together?
4- Can she drop them if she continues to deal with the trustee? Is there a point where the trustee may ask her if she really wants to go ahead with Chapter 7, since she does not have means to pay her debts?
5- Should she change her telephone number, move away from New York where rents are so high? I can see that we are coming full circle right now with this question, but my friend just needs to understand all the possible implications and she is very frightened to act or not to act, one way or the other. You and I, need to hold her hands because I don't think her lawyer is giving her the whole picture, outside of the bankruptcy box.
6- F.Y.I. I myself am just trying to help out a friend, I don't have any vested interest in
this, but I don't want her to go through bancruptcy if it is not in her advantage. What do you think?
Thank you very much, Silvia Heimpel
Expert:  Richard replied 4 years ago.

1) If she cannot show them her means of support to support you spending so they will approve her bankruptcy, she has no choice but to abandon the bankruptcy and wait for the statute of limitations to run.

2) Usually, any assets she has other than exempt assets must be given up. Only 25% of income can be garnished.

3) She is still better off trying to convince the trustee to accept her bankruptcy filing so she can get out from under this cloud.

4) She can always abandon the bankruptcy filing.

5) Yes, she can move to where her cost of living is less. The creditors will be able to follow her, but if she has nothing...again, they can get nothing.

6) I think, if she has nothing, bankruptcy would be the best route..her credit is already trashed and she can get out from under the cloud immediately and start to move forward with her life. btw...you're a good friend!!!

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 4 years ago.
What do you mean by: "she can get out from under the cloud" what is "the cloud" could you specify? Thanx so much!
Expert:  Richard replied 4 years ago.

Just the cloud of owing a bunch of money to people without having it discharged. I know it creates a lot of emotional strain even if you know you cannot pay it and they cannot do anything to you because you can't. You're welcome!

 

I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.

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