I am about to inherit about $10K (I live in California). Through my own fault I amassed about $20K of credit card debt which I couldn't pay back, and my wages at my job have been garnished for the last 4 years. Should I assume that a check written to me for $10K and deposited to my checking account will be immediately seized by my creditors? I just want to know what to expect.
Perhaps not immediately. However, you should assume that at some point in time, the judgment creditor will be able to ascertain that you acquired the inheritance funds and will seek to levy on those funds. The judgment creditor may or may not take a debtors examination to learn this from you. Or the judgment creditor might acquire knowledge about your bank accounts through other means.
The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author (who is only admitted to practice law in the State of California). For specific advice about your particular situation, consult your own attorney.
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Chapter 7 Bankruptcy Attorney
I second what Mr. Chen stated, and I note that many stores sell small fire-resistant safes for home use.
You might want to contact that creditor (those creditors?) and see if they'll discuss taking a reduced amount for an immediate settlement. Speak with them in hypothetical terms, e.g, perhaps you're thinking about borrowing money from a friend so that the garnishment will end (or so that the garnishment won't follow you to a new job which might materialize, or whatever). Needless to say, get everything in writing before settling.
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I would recommend you consult with a local bankruptcy attorney about your situation. Most will offer a free initial consultation. A bankruptcy attorney will be able to review your entire financial situation to see if a bankruptcy would be right for you, and will be able to advise you as to the pro's & con's. Based on the facts you stated, it's possible a Chapter 7 bankruptcy might solve your problems. You could stop the wage garnishment, discharge the $20k in credit card debt, and even keep the $10k inheritance since you more than likely would be able to exempt it under the "wild card" exemption found at California Code of Civil Procedure (CCP) Section 703.140(b)(5). A local bankruptcy attorney would be able to tell for sure if you would be able to use that exemption section or not (if you have a lot of equity in a home to protect, then you would probably not be able to use that section), but it's possible a simple BK could solve all your problems.
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