Question: I have the following debt:
TD GM VISA $25000
CIBC VISA $15000
MBNA Master-card $6000
MBNA LOC $21500
Car loan $4000 (with my ex): (this car is under his name)
Car Loan $13500 (jointly with my spouse
House recently purchased
purchased price $296000
its a joint property with my spouse
Currently I am not working because of my physical condition (accident). Without an income it is very hard for me to pay my high monthly credit card bills.
What can my creditors or a collection company legally do about collecting from me? Can they sue me? or take equity from our house (jointly with spouse)?
Answer: If you don’t pay your creditors, their first step will be to send you letters and call you to attempt to collect the money. If they are not successful, the next step may be to take you to court and sue you. If they do, they will probably be successful, and obtain a judgement against you.
With a judgement, they can enforce the judgement by obtaining a garnishment order from the court, which allows them to garnishee your wages. Since you are currently not working, that is not something you need to worry about until you are back at work.
In order to take equity from your house they would, after getting a judgement, need to return to court and place a lien on your house. Then, to get any money from the lien, they would either need to wait until you sell your house, or start foreclosure proceedings. In your case both of these scenarios are unlikely. It would be pointless for a creditor to spend money on lawyers to get a lien on a house that has no equity. If they foreclosed there would be no money left over after the mortgage and real estate fees were paid, and creditors do not typically put a lien on a house and then wait for years until you sell.
You should probably consult with a bankruptcy trustee to review your options; all of the trustees on this site provide free initial consultations. They may recommend that you wait until you are working again to file bankruptcy, or they may suggest a proposal to creditors, if you are not able to repay the debts on your own, and you want to prevent a wage garnishment.