Can Creditors Sue Me if I Only Collect Social Security and a Pension?
Full Question:
Answer:
A judgment lien is created when a court grants a creditor an interest in the debtor's property, based upon a court judgment. A judgment lien can be filed if an actual judgment in a lawsuit is obtained from a court. In some circumstances, judgments can be enforced by sale of property until the amount due is satisfied. A plaintiff who obtains a monetary judgment is termed a "judgment creditor." The defendant becomes a "judgment debtor." If the judgment remains unpaid, the judgment debtor may request that the court place a lien on the judgment debtor's property, such as bank accounts or real property owned, to secure payment of the claim to the injured party. After the judgment creditor places a lien upon the attached property, the next step in the collection process is to conduct a sale of the attached property to satisfy the judgment debt.
A judgment creditor may also request that the court issue a writ for garnishment of the debtor's wages. If granted, the court order for garnishment is served directly upon the debtor's employer, who must comply with its terms. Wage garnishment is a legal procedure governed by state law in which a person’s earnings are required by court order to be withheld by an employer for the payment of a debt and paid directly to the judgment creditor by the debtor's employer. There are different types of garnishments, as defined by state laws, which vary by state. A garnishment may be made on a one-time or continuing basis. Some kinds of income are exempt, which means that they cannot be garnished at all by creditors for consumer debts, including welfare, unemployment, veterans benefits, Social security, workers' compensation, pensions, and child support payments that you receive. For ordinary garnishments (i.e., those not for support, bankruptcy, or any state or federal tax), the weekly amount may not exceed the lesser of two figures: 25 percent of the employee's disposable earnings, or the amount by which an employee's disposable earnings are greater than 30 times the federal minimum wage.
Some retirement income is exempt from creditors under state law. Missouri protects state employees, plus municipal employees, teachers, police, and fire fighters. In addition, Missouri protects all retirement benefits, at least up to the level or amount actually needed for the recipient’s support.
See also:
http://www.debtsettlementlawyers.com/resources/debt-settlement/debt-collection/missouri-wage-garnishment-laws.htm
If you have no assets or income other than disability payments or exempt income , you may be judgment proof, meaning unable to collect payment from. Bankruptcy filing may be unproductive when a person is judgment proof. Prior to making a decision to file bankruptcy, each individual should first attempt to contact his or her creditors and determine whether it is possible to obtain their cooperation in working out a different payment schedule. Most people would be surprised to learn that creditors often are willing to make reasonable modifications to assist the debtor in repayment. Communication and honesty are the key words here. In exploring this option, the creditor should be honest and forthright with the creditor regarding one's financial situation. The automatic stay is one of the most valuable functions of a bankruptcy proceeding for the debtor seeking relief from creditors. The automatic stay immediately stops any lawsuit filed against you and virtually all actions against your property by a creditor, collection agency or government entity and provides an injunction against the continuance of any action by any creditor against the debtor or the debtor's property. After filing for bankruptcy, the automatic stay will prevent creditors from calling and harassing the debtor in any way. In fact, should a creditor continue to attempt to contact the debtor during the automatic stay, that creditor could be held liable for damages.
I suggest attempting to settle the debt before they obtain a court judgment. Hospitals often have credit counselors available who can work with you on reducing the bill or working out a payment plan. Once a judgment is obtained, the creditor will likely be unwilling to negotiate a settlement and may place liens on property, such as bank accounts, or garnish wages. In some cases, a debtor may be able to negotiate a settlement with the creditor, although this is more difficult once a suit has been filed. In some cases, the creditor may settle for a lesser amount if the debtor is insolvent, since a promise to pay something is better than collecting nothing. These types of agreements are called an accord and satisfaction. If it is possible, a debtor should get a release included in such an agreement so that the creditor may not pursue the full balance of the debt claimed.
You have probably heard of debt relief companies. There are also some companies, even credit card companies, that will work out a compromise settlement or reduced monthly payment. Family and friends are also sometimes options. There is really no good answer to your problem, a problem that many people face. Thus options include, but are not limited to, bankruptcy, debt relief company, compromise you do yourself, friends, family, loans. I suggest you resolve the charges before a lawsuit is filed to collect the money owed, which may further damage your credit history.
Another option to examine is Consumer Credit Counseling Service. CCC is a nationwide nonprofit organization that attempts to work with both the debtor and his or her creditors to devise a more manageable repayment plan. This service very often results in revised payment plans which are acceptable to both the debtor and the creditor, thereby eliminating the need to file bankruptcy.
If you need help negotiating with your creditors, consider contacting a nonprofit debt counseling organization. You can find a list of counseling agencies by location at the website of the U.S. Trustee, www.usdoj.gov/ust (select "Credit Counseling and Debtor Education.") The federal government has authorized the agencies on this list to provide counseling to debtors considering bankruptcy. However, don't pay anyone to "fix" your credit.
The following link allows you to search by area for financial counselors recommended by Dave Ramsey:
http://www.daveramsey.com/coaching/find-coach/
Please read the tips from the Better Business Bureau on selecting a credit counselor :
http://www.bbb.org/alerts/article.asp?ID=613
The following organization is a referral from the Better Business Bureau:
http://www.clearpointcreditcounselingsolutions.org/?source=bbb_tip_choose