What can I do if I am on disability retirement and have a large lawsuit judgment against me? 21 Answers as of July 15, 2011

LARGE lawsuit judgment against us. Income is disability retirement. Probably going to foreclose & thinking of living in a motor home or truck & trailer. Can the plaintiff/attorney seize property, vehicles if it was bought with only income that is suppose to be un-attachable (S.S. disability retirement & L.&I. retirement)

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Eric J. Benzer, Attorney at Law
Eric J. Benzer, Attorney at Law | Eric Benzer
Answer Applies to: Maryland
Replied: 7/15/2011
Financial Relief Law Center
Financial Relief Law Center | Mark Alonso
If you are on a fixed income of disability retirement, this income is exempt from garnishment by a creditor even if they have a judgment against you. Other things they can do with the judgment include restraining a bank account in your name, but they cannot do this if you can show that all of the source of the funds in that account come from your disability retirement. They can try to place a lien against your property, but if it's going to foreclosure, then of course, there's nothing they will be able to collect on that. If you were to rent following your foreclosure, you may be better off than buying or otherwise acquiring a trailer home because they can still put a lien against that. If your home is going through foreclosure and you've already received a judgment, your credit has already taken a hit, so why not just file the bankruptcy, which would resolve all of these debt issues? If you opt to not go with bankruptcy in the end, you run the risk of them attempting to restrain your bank account and put a lien against property you own... which may be something you can defend against, but it may end up being a more tedious task than the actual bankruptcy.
Answer Applies to: California
Replied: 7/15/2011
Tucker Legal Clinic
Tucker Legal Clinic | Samuel Tucker
Exempt funds can be converted into property that can be seized. You may be to keep your home if you file a Chapter 13. Most states provide for exempt property up to certain limits and types of property. You may be "judgment proof." I generally advise bankruptcy for a client only to avoid foreclosure or seizure of property or wages.
Answer Applies to: Mississippi
Replied: 7/15/2011
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
Your SSI will likely be exempt from any garnishment
Answer Applies to: Washington
Replied: 7/15/2011
Apple Law Firm PLLC
Apple Law Firm PLLC | David Goldman
You can evaluate if there is a risk of collection or not and then if a bankruptcy can help with protecting your assets or not.
Answer Applies to: Florida
Replied: 7/15/2011
    once converted no longer protected.
    Answer Applies to: California
    Replied: 7/15/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Probably can't take your motorhome especially if you live in it. The main issue for you would be the judgment creditor attempting a levy on your bank accounts. Although it appears that your income is not attachable by a levy they may try it anyway. This would put you in a situation where your money in the bank has been seized and it would be your burden to prove, in front of a judge, that the seized funds are exempt. My advice would be to look into filing a chapter 7 bankruptcy. Many attorneys including myself offer a discounted rate for people with low income.
    Answer Applies to: California
    Replied: 7/15/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    SS isn't includable as income in bankruptcy. Creditors can seize assets bought with those funds, though. And they'll ask you to fill out an exemption form. You can also file bankruptcy, stay in the house until foreclosure, probably save your other property as well.
    Answer Applies to: Virginia
    Replied: 7/15/2011
    Law Offices of John J. Ferry, Jr.
    Law Offices of John J. Ferry, Jr. | John J. Ferry, Jr.
    Once you use "unattachable" property like social security benefits, such as by buying something or even placing it into a bank account, that property becomes subject to levy. You should consult with a bankruptcy attorney to see what options are available to you.
    Answer Applies to: Pennsylvania
    Replied: 7/15/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Your homestead exemption is 175k . If you live in an RV that qualifies as your home. File bankruptcy and be done with it.
    Answer Applies to: California
    Replied: 7/14/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    When you convert it from cash to a vehicle or a motorhome, it loses its exemption as it is no longer an exempt asset since it was turned into something else, and that would have to be exempt as well.
    Answer Applies to: California
    Replied: 7/14/2011
    Law Offices of Sheryl S. Graf
    Law Offices of Sheryl S. Graf | Sheryl S. Graf
    Assuming that you qualify for a Chapter 7 Bankruptcy, all your debts would be discharged in bankruptcy proceedings. Immediately upon filing for bankruptcy, all collection activities are stayed, meaning the lawsuit against you would be placed on hold until the conclusion of your bankruptcy case. Absent there being fraud, typically all your debts are discharged, including claims for money owed due to past due debts, loans, and general negligence (i.e., personal injury damages). If the lawsuit proceeds to judgment (and you have not filed for bankruptcy relief), then the creditor will have all the same enforcement remedies as any other judgment creditor, including seizing assets and money in bank accounts. Even if your disability income is not subject to direct attachment, once the money is deposited into your bank account (typically on the first of the month), it is reachable by creditors. If Murphy's Law applies, your creditor will seize the funds immediately after your disability and retirement income is deposited, but before your rent/mortgage/utility check clears the bank. The only way to immediately stop this is to file for bankruptcy. I recommend that you contact an attorney who is knowledgeable in bankruptcy proceedings for specific advice.
    Answer Applies to: California
    Replied: 7/14/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    Most judgments would be dischargable in bankruptcy if necessary. However, if the value of your vehicles and home is less then the exemptions allowed to debtors then they cannot be seized. You may essentially be judgment-proof and the judgment uncollectable.
    Answer Applies to: Colorado
    Replied: 7/14/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Once want takes exempt income and buys assets, those assets can be seized. You should have seen a lawyer before the large judgment, but you might possibly qualify for bankruptcy, so that may be a possibility.
    Answer Applies to: Georgia
    Replied: 7/14/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    It is possible to lose assets in a judgment because the money loses its protective status when it changes in nature by becoming a tangible asset.
    Answer Applies to: Indiana
    Replied: 7/14/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Disability retirement is exempt from judgment collection. However, there are limits in California as to what property is exempt. If you have a large judgment against you check with a bankruptcy attorney about your alternatives.
    Answer Applies to: California
    Replied: 7/14/2011
    Ray Fisher Law Offices
    Ray Fisher Law Offices | Ray Fisher
    It sounds like you may want to file a chapter 7 case and get rid of the judgment. However it also sounds as if you have a mortgage issue if the mortgagee is planning to foreclose. If that is the case and you can afford your house payments and you want to keep your house you may want to file a chapter 13 bankruptcy. If you are thinking the judgment creditor can foreclose that can only happen if the house is not your homestead
    Answer Applies to: Texas
    Replied: 7/14/2011
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