How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask cfortunato Your Own Question
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
Type Your Bankruptcy Law Question Here...
cfortunato is online now
A new question is answered every 9 seconds

For the past two years now, I have been having a lot of financial

This answer was rated:

For the past two years now, I have been having a lot of financial problems. The problems are due to a combination of issues having to do with the downturn in the economy, a real estate related business that is not doing well, medical problems, and, most recently, a new roommate that turned out to be a nightmare from hell and caused me to fall very far behind in rent. I am pretty sure that I could eventually catch up on everything but it would take awhile. But last weekend, I was served with a summons to appear in district court for default on a credit card with Capital One Bank. The entire credit line was only $500, and it was not charged all the way up to its limit at the time when I was no longer able to continue making monthly payments. I tried my best to negotiate with the bank. I told them what I “was” able to do, but they didn’t care, wouldn’t listen, and they made demands that I was simply not able to meet. The summons was filed by a local attorney and asks for judgment in the sum of $1,021.75, more than twice what my credit limit was. The law firm did not even contact me before filing suite. I have been thinking about contacting the law firm and offering to make payments, but right now my income is not stable and regular enough to be able to commit to regular payments, nor to an exact amount each month. Things like food, rent, power, phones, medical, Etc. absolutely have to come first. Also, I have other accounts that are delinquent, and I am afraid that if I go down the path toward trying to negotiate to pay one, then all of my creditors will start to come after me. That would create a completely impossible situation. I am 59 years old, my small business is struggling but it is my only source of income and I can’t afford to lose it right now, even if it IS bringing in far less than it was a couple of years ago. My questions are: Am I better off to take bankruptcy in my situation? The court date is this coming Wednesday, Feb 2nd, so I don’t have a lot of time left to figure out what to do. Since the bank is represented by an attorney, am I entitled to an attorney too? And if so, am I entitled to ask the judge for a postponement until I am able to get representation? Since these are attorney’s, I really feel like I’m at a major disadvantage if I represent myself and go into court alone. If a judgment was entered against me, would I be able to file bankruptcy and stop the judgment? What happens if a judgment is issued? I am so tired of all of these financial problems and this faltering economy. I have done absolutely nothing wrong and I feel like I’m paying the price for a world wide / national situation that others created. I am doing my best, XXXXX XXXXX is only so much that I am capable of doing. These banks don’t seem to care about ANYTHING but money. Along the same note; the local bank that my car is financed with sent me an email earlier around the middle of January, threatening to repossess my car if I did not make two payments during that month. The payments I owed for was December and January. But January’s payment was only a few (5 or 6) days past due when the email came. I’ve been averaging one month behind for awhile now, but this honestly feels like harassment to me. Every month they do this, even though I haven’t missed a payment in over a year. I need my car because I live over an hour’s drive away from town. I am worried that if I take bankruptcy I might have to give up the car. I have already paid 70% of the loan off and have over $20,000 into the car with only about a year and a half left to go. I have more equity than the bank at this point! It seems like the closer I get to paying off the loan, the more the bank wants to take the car back. I’m only running one month behind, and eventually, given enough time, I would catch it up. The bank has already been paid back more than the entire principal amount owed, so everything they receive now is all profit. They refuse to refinance, even though I’ve asked them over and over again to add the back payment onto the end of the contract, which would bring everything current and end this situation. They’ve been charging me late fees every month, on top of the interest. I don’t believe they really want a solution, to be honest! Is there any way for me to stop them from this constant harassment? The pressure of all of this is making it impossible for me to concentrate on work and on actually earning and bringing in the money that I need to get back up on my feet again.

Hi JACustomer,

1) What is the market value - if any - of your business, if it can be sold?

2) What is the current market value of your car? What is the balance on the car loan?


Customer: replied 6 years ago.
1) The business is only 3 years old and it is a service business (home staging). There aren't a lot of assets, beyond the website. The site has excellent Google rankings and a lot of work went into building it, but there probably isn't a lot of market value in it. Also, because the economy is so bad in real estate right now, the business probably couldn't be sold. Honestly, it probably could not be sold at this time but it has a lot of growth potential. The economy is the biggest challenge right now.

2) The market value of my car is approximately $10,000, maybe $12,000. I have 22 payments remaining and the payoff amount is approximately $9400. It would be less if I were to pay it all off at once but that's not really an option at the moment.

Bankruptcy is an excellent choice for anyone struggling to pay their bills. To have all debts discharged, you can file a Bankruptcy before or after getting a judgment.

You are not entitled to an attorney (only for criminal cases).

Since your business cannot realistically be sold, you would be able to keep the business, if you file a Bankruptcy. Since the car has less than $2575 equity, you would also be able to keep the car - if you continue to make the payments.

Sending emails about your car payment is not considered to be harassment.

If the creditor gets a judgment, that judgment could be used to garnish bank accounts and place liens on property. If you were working for someone, your wages could also be garnished.

I think this is what you wanted to know. If not, please let me know.
Thank you!

Customer: replied 6 years ago.
Before concluding our discussion, I have a couple more questions. Hope that is okay? Since I am working for myself, and just barely making the basic bills (power, rent, medical, Etc.) right now, if the creditor got a judgment, can my income still be garnished? And if so, how much of it? I currently have no checking accounts, only a PayPal account, which is what I use to take credit card payments from my clients. Could this money be taken as well, and if so, how much of it?

I wasn't considering the emails from the bank about the car payment to be harassment. But, it seems like expecting 2 payments in the same month, one of which is for a payment that is only a few days past the due date, is not right. This does seem like harassment to me. But I guess it's not? So they can repossess a car if it's not even 30 days past due? If I'd have known that the bank would be this hard to deal with I would have never taken out the loan in the first place. They know that nearly everyone is struggling right now, due to this economy. It seems like it would be fair to expect them to at least work with people. I could see if I were several months behind, but one month, or LESS then a single month past due? That seems unreasonable to me.

One last question. I don't have enough money at the moment to pay the full cost of a bankruptcy, so I'd have to make a few payments to an attorney. I know that an attorney will not actually file a bankruptcy until all of the fees are paid in full. Is it possible to ask for a delay in the trial in order to hire an attorney and make the filing? Or, if there is a judgment, will I just lose all or a portion of my income, therefore making things even more difficult? And - what kinds of property can leans be placed on? My car, even though there is a loan on it? I don't own any real estate property, have no savings accounts, and I do not own any possessions that are of any real value. I have a couple of computers that I absolutely have to have if I were to continue operating the business. That's pretty much it. One last thing... How long does it take before a creditor begins putting leans on things? Is the debtor required to provide the court or the creditor with an inventory of everything owned?

Your income cannot be in the sense that payments cannot be intercepted from your customers before you receive them. They would only be able to garnish a bank account, not a Paypal account.

If you go to court, you are entitled to at least one postponement for any reason - including the fact that you are trying to get an attorney (which would not make sense to actually do, because of the expense).

Judgment holders rarely put liens on property, even though they can, because doing so is costly and usually futile. (For instance, if they put a lien on your car, you would be less likely to take care of it, and it could then become worthless.) Since judgments are good for 10 years, judgment holders are far more likely to just wait until your financial situation does improve.

Large companies will generally only garnish bank accounts and wages, not property. Individual judgment holders are the ones who try to take property.

Customer: replied 6 years ago.
A couple of last questions and I will let you go.

So a judgment holder could potentially put a lien on my car, even though I still owe the bank? There would be 2 lien holders then? Would that be grounds for the bank to take the car back? Just wondering.

About the PayPal account; once a customer makes a payment into the account, I have immediate access to the money. I can pay bills directly from the PayPal account, or access the funds via my PayPal Master Card debit card. So, in that sense, could it be argued that the PayPal account is similar to a bank account because I have received the money from the customer and therefore it would be subject to garnishment? Or no? I just want to be sure that I am clear on and understand this correctly.

What about Pre-Paid Visa / Master Cards, which have value loaded onto them? Are they at risk?

Finally, with a judgment, is there property that is exempt from being taken, such as personal property like computers, a TV, Etc. - things that are used for everyday living? Or the tools that I need to continue to operate my business in order to generate an income?

Yes - a judgment holder can put a lien on your car, but cannot take it unless it can be sold for enough to pay off the first lienholder plus $2575 for you (the motor vehicle exemption in Hawaii).

No - getting another lien on the car is not grounds for repossession by the car loan company.

A judgment holder could attach pre-paid Visa cards, but how would they find out you had them?

If a judgment holder found your Paypal account, they would be able to attach it. However, Paypal is not regulated as a bank is, and finding your Paypal account will be harder than finding a bank account, since Paypal does not have social security numbers, they don't check the information provided online, and there is nothing to prevent someone from using a fictitious name to open an account.

Here is the properly that is exempt from collection (the same exemptions that are used for Bankruptcy are also used for judgments):



cfortunato and other Bankruptcy Law Specialists are ready to help you