Expert: Los Angeles Bankruptcy Lawyer Leon D. Bayer - 2/22/2011

Question
Hi Leon
My wife received summons for her Target credit card; she’s behind about 9 months. There is no question that she owes the amount, about $12,000.  We’re behind on several cards because I’m in commercial real estate, have had no sales in over a year. Behind on 1st mort, 2nd mort, owe IRS $13,000 and cannot pay them the $200/month they want, only paying $50; and have made no credit card payments in 10 months or so. But I have every conversation documented that we’ve had with every creditor. She did not attend the court hearing for her Target card because an attorney advised that as long as there’s no dispute as to whether she owes the money, the court WILL issue a judgement. Also suggested not even wasting the court’s time by attending the hearing to argue as to why we can’t pay. But she did decide to go to a second hearing for Discover card, and the attorney agreed to reschedule the hearing til mid June to see if our situation changes. So now I’m wondering if we should have attended the first one. We both have found $8/hr retail part time jobs and my wife gets additional income by cleaning a few houses. I have talked personally to the attorney’s office for Target, and was told they are in the process of getting a default judgement. I told the person I talked to(not an attorney) that I thought the judgement was automatic especially since wife didn’t show; he said attorney’s are still pursuing it. I even asked if I need to discuss with attorney or if they need pay stubs, expenses, assets etc and he said no need at this time. So I’m thinking they either did not show up at court OR they are in the process of garnishment. I understand they can only get 25% of wife’s net income if she makes over min wage. So my question is, can they garnish or attach without another court hearing or will there HAVE to be a hearing to provide documentation of income/expenses so they will know how much they can garnish? Thanks so much. Don, Tennessee

Answer
I have enormous respect for you. Anybody who is willing to take any work they can get has my admiration. I have no doubt that this is just a temporary set back for you.

I do not know the procedural court rules in your state, but I do agree with what the other lawyer said. The court is concerned solely with determining the amount owed. Extenuating circumstances play no role.

With creditors suing you, a garnishment just around the corner, plus arrears on taxes and mortgages, it's time for you to consult with a BK lawyer. You can do some general reading about bankruptcy in my Bankruptcy Guide at http://www.debt-relief-bankruptcy.com/guide-new.asp Although written specifically for California, it will still give you a good general flavor of how a Federal bankruptcy case will proceed. Best of luck to you.

If you or other readers want to keep up with my blog postings about life in and out of bankruptcy, you can follow my blog at http://www.bankruptcyblogger.org/ and my personal web site at http://www.debt-relief-bankruptcy.com  and A Human Guide to Bankruptcy at http://www.thebankruptcyguide.net/