Allright, last year I found out I had a 10 year old child I had no idea about. After the DNA tests, court, etc. I ended up paying just over $550 a month in child support. i have two other children with my wife, and this represents roughly 20% of my income.
Unfortunately, I had bought a brand new car about 3 months prior to this. It had a VERY high intrest rate, but they said after 6 months of payments they would lower it. I needed dependable transportaion for my commute, and at the time I could afford the payments.
But when the child support hit, that money had to come from somewhere. Now, in the state of Michigan, they GARNISH the payments from your check. Currently, this is the only garnishment I have.
I voluntarily repoed the car. It took 4 months to get them to come get it, then they sat on it for another 5 months before they sent it to auction. Of course, in 9 months a new car loses alot of value. They sold it at a DEALER ONLY auction, leaving me with a balance of just over $13,000. Talk about ouch!
Now they want to structure payments with me. But heres the catch. They still are charging me 18% intrest on the unpaid balance, which means my minimal payment, just to cover the intrest, would be about $250 per month. If I could afford that, I would have kept the car!
So here are my questions:
1. Can they levy an additional garnishment, if I already have a 20% one in place?
2. My credit report is already wrecked. Can I file bankruptcy on just this bill?
3. Is there a time limit before they have to send this bill to collections, or can they just let it grow indefinitely?
4. Can they get a judgement and freeze my accounts without notifying me?
5. If I file bankruptcy, will the interest stop accruing?
Thanks for your answers.

