Topic: Making Yourself Judgment Proof

[Flyingifr]

"Strategies to frustrate Car Repossession:

The rules here are different for the two types of repossessions. One type is when the Lienholder (the company on the title) repossesses the car and the other is when a Judgement Creditor repossesses.
Lienholders are much more prone to repossess than Judgement creditors for two reasons. The first is that the Lienholder only has to cover about $350 to 500 in repossession and sale expenses before realizing money towards the debt. A Judgement Creditor has those expenses PLUS the full balance left on all liens on the car. The economics of a Lienholder repossession are much more creditor-friendly than that of a Judgement Creditor. Second, in dealer-arranged financing it is possible that the lender and the dealer have a side arrangement wherein if the car is repossessed before a certain number of payments are made, or at all, the dealer will pay off the loan and take over the debt. This is called “Recourse” and you will not know if the loan is a recourse loan and what the recourse terms are. Judgement creditors have no recourse.

Making your car safe from the Lienholder merely means that the car note is one creditor you will have to pay. Making the car safe from other creditors means loading the car up with liens. I have a friend who actually put his dog, named Howard, on his car’s title as a lienholder. No sane judgement creditor will repossess a car with more than one lienholder on it. Considering that most people who owe money on their cars are “upside-down” (meaning they owe more than the car is worth) with ONE lien, two means you are not only upside down, but probably inside-out also. So…. Get a friend or relative to give you a loan, and secure it with a lien on your car."

What about the $5000 exemption for one vehicle in Arizona?  Wouldn't they have to pay off the lien and then pay me $5000 cash before they could get any money to pay the judgment from the sale of the vehicle?

I've been thinking about downsizing to a much cheaper and older vehicle-- one that is worth less than $5000.  What would happen in a case like this?  The judgment creditor wouldn't be able to touch it, right?  Because it is worth less than the $5000 exemption.

The $5000 exemption only comes into play in a  Bankruptcy - not a repossession.

[sunny]

Am having to attend an Information Subpeona hearing(for 2 different jugments), unfortunately must of gotten the 2 Attorneys smart enough to use it. Cannot find the link and need to know what I should expect. I am receiving Alimony payments, work part-time. Alimony to run out in Sept. of this year, can they garnish my Alimony checks?

[Flyingifr]

They probably connot garnish the alimony checks.

Don't lie in the hearing, but whatever accounts youn tell them about, be sure to clean out and close the next day.

[Rex Leone]

Don't lie in the hearing, but whatever accounts youn tell them about, be sure to clean out and close the next day.

Some folks I know that do judgment enforcement suggest they bring the mostly filled out paperwork to the court to order the surrender of whatever they find at the debtor's examination.  If they are smart enough to do this, and you clean out the accounts right after the examination wouldn't that put you in contempt?

[Flyingifr]

Don't lie in the hearing, but whatever accounts youn tell them about, be sure to clean out and close the next day.

Some folks I know that do judgment enforcement suggest they bring the mostly filled out paperwork to the court to order the surrender of whatever they find at the debtor's examination.  If they are smart enough to do this, and you clean out the accounts right after the examination wouldn't that put you in contempt?

Not unloess the Judge orders you NOT to do it.

When you are ina  Debtor's Examination, your statements must be accurate as to the state of facts at that moment. What is true now can be false in 2 hours.

"Yes, I have an account at Giant Bank" (spoken at 10AM). "There is $500 in it". At 12 Noon the hearing adjourns.

At 12:10 you close the account at Giant Bank. Absent a Judge's admonition NOT to do it, you have done nothing illegal. What you stated under oath was accurate and truthful when you said it, and saying it does not obligate you to ensure it stays accurate forever.

[sunny]

I asked this question in another forum, so sorry if its  repetitive.
If I live with my boyfriend who pays the rent, I use his car-do I have to disclose this? Will I have to name him, give his occupation, etc..
What if all my bank accounts are in the negative. Will they still contact the bank and seize the account? How do I bring it current if they seize the account will the bank take their share first? If they seize the account then will I still be able to access it? Sorry for so many questions.

[Flyingifr]

I asked this question in another forum, so sorry if its  repetitive.
If I live with my boyfriend who pays the rent, I use his car-do I have to disclose this? Will I have to name him, give his occupation, etc..

What your BF owns has mothing to do with your debts, and even if they know you use his stuff, they can't touch any of it.

What if all my bank accounts are in the negative. Will they still contact the bank and seize the account? How do I bring it current if they seize the account will the bank take their share first? If they seize the account then will I still be able to access it? Sorry for so many questions.

The bank will take their overdraft and fees first and the balance goes to the creditor, up to the total amount owed. Why on earth would you want to put money into a siezed bank account, instead of just opening another account at a different bank?

[sunny]

They haven't seized my bank accounts YET. I'm in need of cash to prehaps file for BK, and will have to use my overdraft. At the Information hearing I will have to disclose where my accounts are and am wondering if they will seize an acocunt that is in the negative. I depend on my overdraft and will probally lose it at the hearing. Any suggestions?

[Flyingifr]

They haven't seized my bank accounts YET. I'm in need of cash to prehaps file for BK, and will have to use my overdraft. At the Information hearing I will have to disclose where my accounts are and am wondering if they will seize an acocunt that is in the negative. I depend on my overdraft and will probally lose it at the hearing. Any suggestions?

Just rely on the fact that you can act faster than they can.

They cannot sieze your overdrafted account. The fact that it is in overdraft indicates that you have no money in it, so when they ask about teh account, just mention that it is overdrawn and leave it at that. DO NOT mention the overdraft protection.

[maylaur]

When I was a bill collector one of my best routines was to send the debtor a check for $1.14. Accompanying the check was a letter saying we collected an illegal late charge. When the check came back in my bank statement I knew exactly where the debtor did his banking from the endorsement and stamps on the back. You can bet the next Friday that bank got a Seizure Order. For $1.14 (which I just added back onto the debtor’s account) I got several hundred dollars. The lesson is simple – don’t cash small checks your creditors send you. If you must, sign them over to a friend or relative and let THEM cash it (in a different bank where you bank, that topic is next).

Bill Collectors routinely contact banks near where you live or work to find out where you bank. Many larger banks have an “account locator service” that may or may not tell a bill collector if you have an account at that bank. If you live in a small town or small city where there are a limited number of banks, some bill collectors will just serve them all with a Seizure Order and see which one works. The solution is the Internet. I live in Tucson, Arizona and I do my banking in St Paul, Minnesota! The contents of that account is kept small, and most of my bank deposits are kept in a cyberspace bank. Let the bill collector find THAT. Do a search for "Internet banks" for a list of Internet banks you can use.

I do not recommend titling your accounts in your children’s names because if found out that could be construed as “in fraud of creditors”, which is illegal. Moving your banking to the other side of the world, in your own name, is perfectly legal.

What about bank CDs?  We were planning on putting some of our tax refund in CDs to accrue while we wait for a chance at a house.  Would these be in danger of being seized if a CA or OC decides to go after our bank accounts?

[Rottweiler]

ANY money kept in a bank is subject to seizure.   Even CDs.

[woeisme]

Flying...about Judgments in Texas.  Can any equipment/tools of the trade be taken from you to pay a judgment that you may have at home in connection with a Home business ( more of a Hobby business really) It's value is about $4,000.00   Other than that...I own no stocks, bonds, C D 's, nor do I own any real property...besides my home and car ( car is paid off)

I researched the banking aspect of this it it seems rather easy to keep your money in your own possession. Internet banks!

[Rottweiler]

Flying...about Judgments in Texas.  Can any equipment/tools of the trade be taken from you to pay a judgment that you may have at home in connection with a Home business ( more of a Hobby business really) It's value is about $4,000.00   

Texas Code, Chapter 42, §42.002 states:

§ 42.002.  PERSONAL PROPERTY.  (a)  The following
personal property is exempt under Section 42.001(a):
   ...                            
      (4)  tools, equipment, books, and apparatus, including
boats and motor vehicles used in a trade or profession;

As long as the aggregate value of all exempt property is $30,000 or less for a single individual ($60,000 for a family), IMHO, you have nothing to worry about.

[zoort]

Question: I'm a single mom for the last 1.5 years - currently working but making enough to cover bills and food right now. Just lost my home and I'm stuggling to pay the bills. I have a financed vehicle but probably need to surrender that since I cannot afford payments anymore and have not made payment for 4 months. Am I considered "judgement proof"?

[Rottweiler]

How much do you make, specifically net income?  In which state do you live? 

You don't have a lot in assets and those you may still have may be exempt from seizure.  BUT in most states if you make more than the exempt amount of net income (gross minus certain deductions), your pay can be garnished, even if the income is still low.  This exempt amount per Federal law is the Federal minimum wage x 35 hours a week; some states allow for a more generous amount and a handful do not allow wage garnishments, either for all wage earners or a head-of-household such as yourself.

If you have a bank account?  That is almost certainly vunerable to seizure.  All too often, even if the funds all are exempt from execution, a bank will take the "safe" way out and freeze the account and let the judgment creditor take whatever they are allowed to take.  The debtor must then go to court to try to get the execution reversed and the funds returned, a procedure that takes time and money.

Again, a reminder:  See the "Method" for more information:

http://www.debtorboards.com/smf/index.php?topic=12.0 (Yes, you are here already...but you might want to re-read the thread starting topic.    )

http://www.debtorboards.com/smf/index.php?topic=14.0

You may be losing the current car, but if you get another?:  http://www.debtorboards.com/smf/index.php?topic=15.0