Have a judgement of over $200K and I make $130K gross, $90Net after statutory deductions. I pay $15,500 annually in child support through garnishment (work). What is the total amount that the creditor can garnish me given the above numbers. Someone told me that I'm judgement proof since my $15,500 child support garnishment is over 10% of my $130K gross per year(10% of gross being the max allowed in NY), but then someone else told me the maximum allowable garnishment for multiple judgements in NY is 25% of Net? So which one is it? I live in Nassau county, NY and work in NYC. Thanks,
Have a judgement of over $200K
- Thread Starter Kasel
- Start date
zddoodah
Well-Known Member
I suggest you review some of these search results and then consider consulting with a bankruptcy attorney.
Zigner
Well-Known Member
It's both - whichever provides the lesser amount. Keep in mind that your child support obligation may end before the judgment expires.
Thanks, but that was exactly my question. Is it 10% of gross which in my case it's the lesser amount, and I wouldn't have to pay any additional other than my child support, or is it 25% of gross in which case I would have to pay about $7,000 annually in addition to child support? Again I was told that if it's one garnishment alone it's the lesser of the two, but if it's more than one garnishment then it's up to 25% of net after statutory deductions? So is there someone that knows this for sure? Btw my child support will end in about 8 years so I'm not worried about that. Thanks
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Bankruptcy doesn't seem an option as I make too much and have no dependents, and thanks for the links but again my question remains. In my case which would be considered multiple garnishments is the maximum 10% of my gross or is it the maximum 25% of net. Keep in mind the amounts differ quite a bit..
despritfreya
Active Member
I cannot answer your specific question but I have one of my own.
Is this $200k consumer or non-consumer related?
Remember, if more than 50% of ALL of your debt can be classified as "non-consumer" in 95% of the cases the amount you earn does not stop you from filing Chapter 7.
Des.
Thanks, now its getting more interesting. Is what you saying relevant even in New York state? Well actually its "alleged fraud" that originated in a Canadian court and was a summary judgement. BTW, I never agreed that it was fraud, but rather it was agreed upon between me and my employer, but it got too expensive to defend it and I abandoned the case, and a summary judgement was awarded. then it was domesticated in NY three years ago. No criminal charges were ever filed. I filed chapter 13 in Nassau NY, but on our first meeting the trustee was disgusting and suggested I pay a stupid monthly amount like $2000. My lawyer said he might not be able to do 7 because of my high annual income? But he never mentioned anything about your 50% rule of non consumer debt? Please elaborate?
despritfreya
Active Member
Bankruptcy is Federal law. The law is the same every State. What is different is how the Federal Districts in each State interpret the law.
Here is the problem. You have a Canadian civil judgment that is based on findings of fraud (civil not criminal). The judgment was then domesticated in NY. In either Chapter 7 or Chapter 13 the judgment creditor can seek to have the debt deemed non-dischargeable under 11 USC 523(a)(2) or under 11 USC 1328(a)(2) so, in all likelihood, your Chapter 13 would have not done much good if the creditor filed a timely complaint.
As it relates to consumer vs. non-consumer, if the judgment stems from a consumer activity (as opposed to a business relationship gone bad), it is consumer. You would need to tell me what the original debt/argument between you and the creditor was about (in general terms).
Des.
Des thanks, You really know what you are talking about. Basically here is what happened: I was the companies controller for about 7 years. BTW, I left the company in 2005. His claim in 2011 was I defrauded his company by issuing checks to myself in the amount of over $230K from 2001-2005. Checks were all signed by the President, but he claimed that I either forged his signature, which I never did, or supposedly used blank pre-signed checks by him. My response was we had an agreement with the president of the company that he pays me $130k per year salary plus bonus, but he only paid me about $70K. The average pay for same type of job and similar company size in Toronto was $130-$170K. I approached him about short pay and we agreed that I issue checks (to make up for shortfall) which the president authorized and signed each one of them. After I responded to the case (about 4-5 motions), I couldn't afford more money to defend the case, so I left it alone. About end of 2015 he was awarded a summary judgement for about $400K CAD. In 2016 was domesticated here in NY. So this is the short story of it.
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despritfreya
Active Member
I would deem this non-consumer. We now know you have, at least $200k in the non-consumer column. The question becomes, how much more debt can be put in that column vs. how much is put in the consumer column? If more than 50% is in the non-consumer column you do not need to take the means test for Chapter 7 qualification purposes.
But again, even if you file bk there is no guaranty that the judgment will be subject to the discharge. The creditor will have the right to seek a determination that it is non-dischargeable due to fraud. If the creditor files a timely complaint, since there is already a finding of fraud, once again, you will face a Motion for Summary Judgment - this time, based upon an already established judgment that is based in fraud.
Des.
But again, even if you file bk there is no guaranty that the judgment will be subject to the discharge. The creditor will have the right to seek a determination that it is non-dischargeable due to fraud. If the creditor files a timely complaint, since there is already a finding of fraud, once again, you will face a Motion for Summary Judgment - this time, based upon an already established judgment that is based in fraud.
Des.
Des, from what you know now about my case, what do you think in terms of being able to file chapter 7? Thanks,
Thanks Des, actually the numbers are as follows about $310K non consumer debt and $55K consumer debt, so this part now seems somewhat clear. Next part is: I know for sure that the Canadian party will file a motion to exclude their debt from discharge based on their "alleged fraud".
Now the question is: what's my defense? can I say, well how can it be fraud when I was never charged with fraud? or other circumstances in which I responded to the claim by denying it, and had no resources to fight to the end? or anything else such as the statue of limitations in Canada had expired (I think) when the case was brought up? (case was brought up in July 2011, last check issued I believe was in spring 2005) Or did the creditor have the signatures in checks verified by a calligraph specialist, etc, etc.? or any recourse there might be to make this fit into some grey area in which I might succeed?
I know from experience that when they domesticated it here in Nassau, I had no way of fighting it (other than technical or mistakes when filed) since US has and agreement with Canada which basically is the same as domesticating it in NY from another state?
But, does bankruptcy court differ in any measure with other courts, are there other facts that a bankruptcy court would consider, where a different court won't?
or, can I try to outsmart them by agreeing out of court say for a big amount e.i $2000/mo, for seven years as an example hoping they agree since through garnishment they will get maybe $650/mo at most, and then in couple months file chapter 7 with the claim that now its not fraud anymore since they agreed to a settlement? Just trying to think out loud on how to do this? as I really would not like to pay a penny, since its my sincere belief that he owed me the money, and I didn't steal it?
despritfreya
Active Member
In my opinion, there is no defense. You participated in the Canadian litigation and then stopped thus allowing the proceeding to end in a finding of (civil) fraud against you. The judgment has now been domesticated and holds, IMO, the full force and weight of a judgment obtained in NY. The fact that this was originally a judgment out of Canada is not relevant (been there - done that).
Unless you can find bankruptcy case law in your district that allows the bk court to disregard the judgment, the bk court will be bound to give that judgment "full faith and credit". If the "findings" enumerated in that judgment meet the standard of "fraud" under 11 USC 523(a)(2) you will lose on Summary Judgment.
Google "full faith and credit"; "Rooker-Feldman Doctrine"; "res judicata" and "collateral estoppel".
You certainly can attempt to settle the judgment outside of court. I think, to get the ball rolling, such would just take a phone call to the NY attny who domesticated the judgment. Depending upon the response, you will know if there is any room to negotiate. Entering into a settlement or payment plan is not going to negate the judgment. I do not know how long NY judgments are good for or whether or not they can be renewed. As long as there is a valid judgment the fraud issue is not going away (again - my opinion).
If you are considering bk, you need to find a really good bk attny - one who routinely handles defending adversary proceedings. Maybe the following link will assist you in finding one:
Find An Attorney: Bankruptcy, Student Loans, NACBA
Des.
Unless you can find bankruptcy case law in your district that allows the bk court to disregard the judgment, the bk court will be bound to give that judgment "full faith and credit". If the "findings" enumerated in that judgment meet the standard of "fraud" under 11 USC 523(a)(2) you will lose on Summary Judgment.
Google "full faith and credit"; "Rooker-Feldman Doctrine"; "res judicata" and "collateral estoppel".
You certainly can attempt to settle the judgment outside of court. I think, to get the ball rolling, such would just take a phone call to the NY attny who domesticated the judgment. Depending upon the response, you will know if there is any room to negotiate. Entering into a settlement or payment plan is not going to negate the judgment. I do not know how long NY judgments are good for or whether or not they can be renewed. As long as there is a valid judgment the fraud issue is not going away (again - my opinion).
If you are considering bk, you need to find a really good bk attny - one who routinely handles defending adversary proceedings. Maybe the following link will assist you in finding one:
Find An Attorney: Bankruptcy, Student Loans, NACBA
Des.
despritfreya
Active Member
You are quite welcome and I wish you the best of luck in whatever course you choose.
Des.
Des, I have one more question. Lets assume that my payment plan of $800/MO for next five years (total $48K) is approved by the trustee of chapter 13. Then six months later I find a job that pays me double what I'm making now(for sake of discussion). First Do I have to report that? and if so will my monthly payment have to be increased? Or will my total $48K be increased? thanks
I have one question. Lets assume I have a payment plan of $800/MO for next five years (total $48K) approved by the trustee of chapter 13. Then, six months later I find a job that pays me double what I'm making now(for sake of discussion). First, Do I have to report the increase in salary? (again after my chapter 13 payment plan is approved) and if I do have to report the salary increase would my monthly payment be increased? Or will my total $48K be increased? thanks
despritfreya
Active Member
The answer depends upon local procedure.
In my district (Arizona) Trustees normally require the submission of tax returns during the course of the case. They are suppose to review the returns and, if appropriate, seek a modification of the Plan due to increased income. In reality, once the Plan is Confirmed, the submission of the returns is more like paper pushing. The Trustee simply notates that the return was supplied and rarely looks at it.
In other instances the Trustee will require the annual filing of a new budget and, if appropriate, a modified plan to account for the additional income. This typically happens if one spouse recently lost a job and may be looking for another.
Yet, in other instances, nothing is required and the ability to pay only becomes an issue if something is filed by the debtor that causes the Trustee to look at the issue.
You would have to check with a local bk attny to see what is required in your district.
Des.
In my district (Arizona) Trustees normally require the submission of tax returns during the course of the case. They are suppose to review the returns and, if appropriate, seek a modification of the Plan due to increased income. In reality, once the Plan is Confirmed, the submission of the returns is more like paper pushing. The Trustee simply notates that the return was supplied and rarely looks at it.
In other instances the Trustee will require the annual filing of a new budget and, if appropriate, a modified plan to account for the additional income. This typically happens if one spouse recently lost a job and may be looking for another.
Yet, in other instances, nothing is required and the ability to pay only becomes an issue if something is filed by the debtor that causes the Trustee to look at the issue.
You would have to check with a local bk attny to see what is required in your district.
Des.
Thanks Des. Quite interesting the fact that in certain jurisdiction could be treated differently. I was of the impression once the plan is approved that's it. I actually asked my attorney, but he seems all over the map sometimes, even though he did say that if my plan gets approved, that would be it even if my income level increased drastically in the future.
