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Our Chapter 13 bankruptcy case was dismissed in January 2012.

Since then, we have been...
Our Chapter 13 bankruptcy case was dismissed in January 2012. Since then, we have been working with creditors individually as they have contacted us to resolve our debt. We have steadily reduced our debt this way. Recently, we have been served for an arbitration case regarding a debt we have incurred with a credit union that had not bothered to contact us. As we have a limited amount of disposable income each month, we can only pay a certain amount each month. We have been making "good faith" payments to those who have called, to put them in line to be payed. My question is, what will happen at this arbitration hearing? I have the ability to work a repayment plan with the credit union separately, but they said that would not stop the legal action. What is my best course? I don't dispute the original amount, but I'm bothered by the $3000 legal fees they added to our account. Any help would be greatly appreciated!
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Answered in 7 minutes by:
6/6/2012
Roger
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31,869
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney here to assist you.

 

An arbitration is just like a court proceeding with a judge, except - instead of a judge - there will be an arbitrator who will hear the case and then decide the issues and hand down an order. Essentially, the arbitrator is the judge and jury. Also, the arbitrator's decision is not available for appeal. Thus, once the decision is made, it is final.

 

Many contracts provide mandatory arbitration clauses in them because arbitration is usually much faster and sometimes less costly than traditional litigation.

 

Thus, when you show up for the arbitration, it is going to be just like a regular trial. Each party will call witnesses, introduce evidence, etc. in order to prove their positions to the arbitrator.

 

Usually, the arbitrator will take the information and issue a written opinion within a few weeks of the hearing.

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Customer reply replied 5 years ago
i understand the concept of what the litigation is about. My challenge is that I have a work conference on the same day, but I don't know how to, or if I'm able to reschedule. As I'm not disputing that I owe them money, I have issues that they did not attempt to contact me, except through the court. Will the arbitrator determine not only that we owe the money, but the repayment terms as well? If I do not attend, do they have the authority to garnish wages, etc? As I mentioned earlier, I have the ability to, and the credit union will accept a repayment plan without involving the court action...should I take preemptive steps to show that i'm willing to work with them?

And finally, because they will have attorneys there, shouldn't I have one too? If I have one, what could they possibly do to help me? I am already having to divvy up my income to repay all my debts, so additional attorney fees are difficult...

Hi -


I'll try to respond to each question.

 

Will the arbitrator determine not only that we owe the money, but the repayment terms as well?

 

No, the arbitrator usually only determines the award. Collecting it is up to the creditor and what it can either get out of you on its own (garnishments, execution on property) or what you can agree to in a payment plan.

 

If I do not attend, do they have the authority to garnish wages, etc?

 

Yes, the creditor can issue a wage garnishment to your employer, can garnish your checking account and can attach personal or real property that you own (that is lien-free), sell it and apply the proceeds to the debt. There are property exemptions that are safe from creditors, which are listed here: http://www.illinoislegaladvocate.org/index.cfm?fuseaction=home.dsp_Content&contentID=357

 

As I mentioned earlier, I have the ability to, and the credit union will accept a repayment plan without involving the court action...should I take preemptive steps to show that i'm willing to work with them?

 

Certainly contacting the creditor and trying to work something out is a good idea. You may can offer to enter into an agreed judgment for the amount due in exchange for favorable repayment terms.
And finally, because they will have attorneys there, shouldn't I have one too?

 

It's always best to have an attorney represent your interests in a case. But, attorneys do cost money.

 

If I have one, what could they possibly do to help me?

 

In a case like this, where there's really no defense to owing the money, and the only thing is trying to come up with a realistic repayment plan, the attorney can work with the creditor's attorney to come up with some arrangement that you can live with and afford. Often, a debtor can negotiate a deal just as well as the lawyer. It really just depends on how willing or unwilling the other party is to negotiate and settle.

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Customer reply replied 5 years ago
Thank you for your help so far...two more followups:

- I have a conflict on the date that is scheduled. Do I have the ability to reschedule?

- How is a creditor able to garnish wages / seize property? Isn't that the court's jurisdiction? I would expect the arbitrator may have that ability, but not the creditor directly...

I have a conflict on the date that is scheduled. Do I have the ability to reschedule?

 

You have the right to file a motion to continue the case with the arbitrator. You can simply state that you are unavailable that date and ask for an alternative time to have the hearing. It is likely that if you call the creditor's attorney, you can agree to an alternate date and clear it with the arbitrator.


How is a creditor able to garnish wages / seize property? Isn't that the court's jurisdiction?

 

Once the creditor receives a judgment against you, it can file a writ of garnishment (to your employer or to your bank) with the court clerk, who will then issue the writs and cause them to be served on the garnishee (employer or bank) to seize your money and turn it over to the creditor. Alternatively, a writ of execution can be filed and issued by the court to seize non-exempt property to be sold by the creditor.

 

Thus, the creditor must go through the court to process the collection actions, but once a judgment is granted against you, it's an easy process that you can't stop.

Roger
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31,869
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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