Recent discussion I've been having here regarding the lawsuit woes of a friend of mine provoked me to revisit a problem lurking in the background of my own life. Back in 2000 I owned a business, of which I was the sole proprietor, and I was sued. I saw no point in even responding, as I had no defense and absolutely no ability to pay. At the time, my business was falling apart, anyway, and I was lucky just to get the equipment out of my office before I was locked out of it. Thus, paying this creditor was out of the question. They got a default judgement against me, naming my business as well as myself personally, for over $85,000. I never heard from the creditor again after they got the judgement. On rare occasions over the last few years I would check my credit reports, just to see how bad it all was (more out of curiosity than anything else, as I wasn't in any position to do anything about my credit). The judgement never appeared on any of my personal reports. I assumed that this was because, although my name was on it, the address was my former office address and didn't match up to anything on my reports. I know that there are at least three other people in my city with my exact same name, spelling and all, so I just figured it was a situation where the name alone wasn't enough for the CRA's to determine which person's report to list it on. As far as I could see, there was really nothing on that judgement to reveal my specific identity, as my name is not unique. My business name was on the judgement, but I'd never had any credit in my business name, so there was never any reference to it on my credit reports. Anyway, I just assumed these were the reasons it wasn't showing up. In 2001 I started another business. This time I have no employees and I work from home. It's just me. At first, with this new business, I didn't even make enough money to eat. I had to sell plasma, have a few yard sales, and borrow from family just to survive the first year. My income has increased, slowly but surely, over the last couple of years. It could have happened more quickly if I'd had any working capital to start with, but alas, I didn't, so there we are. Now, at this point here in the beginning of 2004, I am finally at the point where my income is enough to really support my kids and myself without ever having to rely on outside help. We can pay our necessary bills, such as phone and utilities, on time. We can buy food and clothes and meet our needs, but there is nothing extra. I haven't had a haircut in two years and our living room is furnished with lawn chairs. Nothing extra...seriously. However, as I said, my business is growing steadily. Each month I make a little more than I did the month before. Soon there will be a little extra. And soon after that, there will be more extra. Barring any major catastrophes, within a year or two I will actually be doing quite well. So, all this talk of judgements here sparked my curiosity as to why this creditor hasn't pursued me. Yesterday I checked out online court records and found my case from 2000. The record indicates that in late 2001 the creditor did actually attempt to serve me with papers ordering me to appear for an examination of assets. I don't know why they would have had any difficulty, as they know where I live (and my phone number is listed), but they never did serve me and that is the last notation in the records ("attempt to serve"). It wouldn't have mattered, anyway; I don't have any assets. Then, again as a result of reading this board, last night I signed up for PrivacyGuard and had a look at my reports. After all this time, that judgement is showing up. It is only on the Experian report, and it does not show the amount. Experian has my former business listed as my "current employer" (don't know where they got that info), and I am assuming that it's the association there with my name and the business name that resulted in the connection of this judgement with me. So, that's the scoop; my issue now is deciding what to do. Here are the questions that come to my mind: 1. While I have no assets now, and thus nothing to go after, I do hope to have assets someday. Is the best answer for me to file BK right now while there's absolutely nothing to lose, in order to protect my possible future assets? 2. Since this creditor has apparently given up on collecting (I can only assume, anyway), should I gamble that they won't keep looking for assets of mine and just lay low? 3. Even if I managed to slide under the radar for years, does anyone think they *won't* renew this judgement when it's ten years old? 4. Is there any way for me to avoid BK, or should I even be trying to avoid it? It crosses my mind that situations like mine are the very reason there is such an allowance for BK, so should I just accept that BK is my fate and get it over with?
Hi Wurkn, Your situation is fraught with complexity. If I were you, before I contemplated doing anything, I'd go spend an hour with a lawyer. We're beyond the scope of CreditNet with this one. Know what I mean? And just keep your spirits up and keep workin hard. It'll happen. .
No money for a lawyer right now. As a matter of fact, no money even to file BK...lol! For the time being, I'm just throwing my situation out there for all the Credit-Netters to chew on and tell me what they think. Mental preparation for whatever I eventually do, I suppose. Thanks for the words of encouragement. They are always appreciated.
OK Wurkin, please don't take this the wrong way, but your $85K whopper makes me feel a little better about my $25K after reading about all these 1-2K judgements! I completely feel your pain, and frustration, and agree with Butch that you will ultimately need to consult an attorney. Many of them will give you a free initial consultation to at least review the basics with you. I have been told by two different attnys that if I have no assets (and in my case, don't expect to have any any time soon), that it's not worth spending the money to file BK - there's nothing to protect. HOWEVER, you do expect to have an income so your solutions might very well include a BK 7, which is bad but is at least finite. I just posted a question about whether judgements are always renewable, or whether it varies state to state - that could be a point to consider as well - if they can't renew it then it will go away. You could alsow try to have it vacated as some others on this board have been able to. Anyway, no real advice here except to say that you WILL work it out. Good luck to you, Wurkin!!!! Poochie
1. You could file Bankruptcy, and have the 4 years that the judgement has aged already added to the 10 years the BK will hurt your credit, OR you could INCORPORATE your business and hold all assets in the CORPORATE name. That way, if they ever do serve you with the Information Subnpoena, you still have no assets (except stock in the Corporation). Talk with a lawyer and accountant about this. I am sure the two of them can set up an adequate shield for any assets. 2. Expect your judgement to be worked once a year. lay low and keep off their radar screen and you can outlive the SOL, even ona judgement. 3. They may renew the judgement, but taht doesn't extend or renew the time the judgement can appear in your credit files.
Re: Re: Big, nasty judgement! Glad I could make you feel better! Is it common for BK attorneys to offer a free consult? I hadn't even looked into it, to be honest. And BTW, for those here who have been through BK7, is it emotionally traumatic? I know this might seem petty, but whenever I've thought about it I find myself less concerned about the financial repercussions and more concerned about appearing in a courtroom and feeling like a dirtbag. Do they ask a lot of humiliating questions and put you through the proverbial ringer?
Re: Re: Big, nasty judgement! Thanks for the input, Flyinginfr. As to your first point, I wonder how easy it is to buy a house and have it held in a corporate name. Any idea? Someday I would like to buy a house, and it would be nice if that day would come before my children are grown and gone. Regarding point #2: You are the person who used to be a bill collector, correct? Is that the standard procedure, to work judgements once a year? And as to the third point you made: While credit is obviously a concern, I am more worried about being unable to own anything in the future. Working so hard and still being unable to have a life is a scenario I find more devastating than bad credit. I am glad for the info, though; I wasn't sure whether renewing the judgement would cause an entirely new public record to appear on my credit report(s).
Re: Re: Big, nasty judgement! With the volume here so large, you can rest assured they're not gonna forget. There's now a mechanism that a creditor can subscribe to with the CRA's that whenever there is activity on your CR, the CRA will "alert" the creditor. They now know, or soon will, where you are. YOU NEED TO SEE A LAWYER! Affordability is beside the point Wurkn. I just don't wanna see ya get sideswiped. .
Re: Re: Re: Big, nasty judgement! You won't be able to buy a house until your credit is cleared anyway, and you already have some years towards FCRA dropoff invested in this. In the maen time, it is perfectly legal for a corporation to own assets. You may have heard of the concept of "File Segregation" - getting an Employer Identification Number from the IRS and using taht as a Social Security Number? Forminga Corporation witha legitimate business is legal file segregation. And yes, teh Corporation can purchase any asset consistent with its Corporate purpose - and having an office (ostensibly in the same place as teh CEO's residence) certainly is consistent with that. Not only am I a former bill collector, I am a tax accountant. How often old judgements are worked depends on teh workload of the Collection Department. It can go from Never to Daily. You are already hearing from them about once a year - that's a hint theirs is annually.
Re: Re: Re: Re: Big, nasty judgement! Just to correct you: I'm not hearing from them once a year. The court record indicates their last "attempt to serve" in 2001. I don't know exactly *how* they attempted to serve me, since it should have been easy, but I didn't hear from them then and I haven't heard from them since. No letters, no calls, no process servers, nothing. I am listed in the phone book, all three credit bureaus have my correct address, and I haven't moved in ten years. <shrug>
