Expert: Mark J. Markus- California Bankruptcy Attorney - 3/26/2009

Question
Hi, I live in New York City and  I have about $13K in unsecured loans/credit cards. I qualify for Chapter 7, but I don't even have enough money for the lawyer.

Long story short. What happens, theoretically, if I just stop making monthly payments to my creditors? What can they do in the worst case? Thank you


to clarify: can they or will they seize my wages? my money from checking account without my authorization? Can they sue me, etc?


I also have 3 unsecured loans from CitiBank - a credit card, a personal loan and revolving overdraft protection. They are tied to my checking account. Can they without my authorization withdraw money from my checking account if they see I have money there and don't pay them?

My friend had a similar set up with Bank of America and they started taking money out of his checking account to cover his monthly BoA credit card and loan payments. He complained to them, but they said according to some kind of NEW law they are allowed to do that.

Answer
As to your first question, they can probably garnish your wages, seize your bank accounts and go after other non-exempt assets that you have.  What they can do depends purely on New York law, and I do not practice in New York, so you'll need to discuss that with a New York attorney.

Yes, the banks can take money from your deposit accounts if you owe them money.