Are we judgement proof? Almost? No house, no assets, paying on 2 cars. Husband works F/T, myself P/T. $70,000+ in cred card debt. All in collections. Never more that $500 in our bank accounts. How do they determine the percentage to garnish wages? Do they take your expenses into account and can that include payment to other creditors? I have a home business that generates no monthly income. Maybe 10 in the future but right now (only 2 years old) its expenses are more than income. Sole proprietor. Both of our debt accrued before we married in April. Thanks ChristineE
But if you obtain assets in the future they can go after them at that time if they have or obtain a judgment. Also a judgment really trashes your reports. The best policy is to avoid a jugment at all cost.
The only way you would be judgement proof is if your creditors don't know where either of you are working or banking. Garnishments are usually, depending on State law, 10% or 25% of gross pay.
No, because in some states they can garnish your wages and/or bank accounts. Judgements expire after so long depending upon the state but they can be renewed by the plaintiff if they want it to continue. Even though you have no assets you could obtain a car or home in the future and they can levy that. I wouldn't say anyone is judgement proof at all.
No, they can all get judgments on you, they'll just have a difficult time all getting their money. But you also can't accumulate real assets (paid off cars, homes with real equity) while you have those debts looming over you or while you have judgments dogging you (and at 70k of debt, you will get judgments) which would then attach to any real assets you have and to your income now and in the future. And that 70k defaulted on will become 80, 90, or even 100k if you let it sit, eat penalties and interest and atty fees... Barring winning the lottery or getting a huge inheritance, you're screwed right now. bk7 the credit card debt, reaffirm the car loans and keep the cars and current terms if they're good, then you're done with worrying about judgments that will surely ruin your credit anyway. Then re-establish credit as AUs or on rebuilder cards and never run up cc debt again. Buy a house if you can qualify in the interim if you can, and then reaffirm it too. If your credit is already shot, then wait til after the bk. Use a mortgage as "good debt" that will help you build equity in a house and forget ever borrowing to live above your means via credit cards (and I'm talking from experience). and before anyone even tries to talk you into debt consolidation or lump sum settlements of your debt (assuming you could do that) let's talk reality. 90% or more of people who enter debt consolidation programs cccs and the like don't finish the program. If you settle or use cccs and get part of your debt "forgiven".. you get to pay income taxes on the portion "forgiven".. and remember: in a few years they've taken your actual charges and jacked them to heaven (several years will double or triple your debt with their fees, penalty interest, and atty charges)... so, if you sit around and do little or nothing, then try to settle or pay the debts, your 70k may be 100k or more. say you can do 40k of it as a settlement... (yes, I'm dreaming big here).. your reward is that you now get to pay income taxes on the remaining 60k (100-40 forgiven=60 as reported income and then you get taxed on an additional 60k). so you'd accomplish taking unsecured debt and turning it into IRS TAXES due with possibly their penalties and interest if you can't pay it... and one entity you never want to deal with is the IRS... they'll collect til you die (and after)... So do settling debts and cccs sound good? no do you have assets to collect upon? no Is your credit already shot? likely... so dump the debt, consult an atty and get rid of the elephant on you... then restart your lives together with cash and assets
ChristineE, What is your household income? How have you gotten into this situtation? Was there an emergency, or was it just out of control spending? If you can give us more specifics, we might be able to help you get out of this. --Galabar
