Filing For Bankruptcy Vs. Doing Nothing

[ManFromMunchkin]

Hello,

Here's a question I just thought of last night.

What happens to people who are deeply in debt, unable to pay, cannot afford a bankruptcy lawyer, and can't even afford to buy the gas to get to court if and when they are sued?

I asked a friend this question, and he said: "Nothing. The creditors just write it off. You can't squeeze blood out of a turnip."

Is this true?

If so, then what are the advantages of scrounging up the funds to pay for a bankruptcy lawyer, and file for banruptcy, when you can do nothing and pay nothing and get your debts written off anyway?

Just wondering.

Dennis

[jal1129]

They won't JUST write it off. They will also sue you and get a judgement, then depending on circumstances they can garnish your wages, seize checking/bank accounts, put a lien on assets etc. And judgements are renewable indefinetly, so if things turn around for you down the road say 10, 20 years or so they can collect then.

Bk wipes out all the debt and gives you a fresh start. No more worries, no more running from creditors etc. Many people on this board have waited several years to file, but sooner or later most people end up having to pay or file bk.

[manglicmot]

Doing nothing is the worst thing. The collectors will sue and win a default judgement against you and will never stop trying to seize the money in any way possible.

[keepmine]

If so, then what are the advantages of scrounging up the funds to pay for a bankruptcy lawyer, and file for banruptcy, when you can do nothing and pay nothing and get your debts written off anyway?


Hopefully, you will progress in life and start to accumulate assets. You don't want old judgment creditors around with their hands out just waiting to raid your assets.

[Spartan]

If you can't afford to get gas to go to court, then bankruptcy is not your primary concern. Putting food on the table and putting a roof over your head, are your primary concern. You can beg, borrow and steal, to get the money to file. Well, whoopeee!! Congratulation! You are debt free. But welcome to homelessness and starvation!!


This BK mantra needs a reality check. The Attorney General's office of my state has explicitly advised people who are judgement proof, that filing BK is not their best option. There are ways to stop collection effort. Contact your state's Attorney General's office for assistance.


When you get your affairs in order and your livelihood straighten out, then you can file. You don't need to worry about collection when you got absolutely nothing to be seized. You can start worrying about that, WHEN you have, or about to have, income and assets that need to be protected. Do not worry about the judgement. It is worthless against you. I got one against me for 4 years. Big freaking deal. 5 years later, I am in a position to make money again, I filed BK, and after discharge, I walked into the Courthouse and filed to have the judgement tossed. And it was duly tossed 2o days later. Not a beep from their almighty attorneys. Not a cent lose from me, except for the $5.00 filing fee. They went throught all the work, for nothing.

[HHM]

Creditors simply don't write off debt (in the sense that they stop pursuing it). So in that regard, doing nothing accomplishes "nothing". However, odds are you will not be in this situation forever.

However, Spartan makes the good point that, if you cannot even afford to pay your day to day living expenses, then BK is not the answer to your immediate problems and can wait (but you will probably have to file BK at some point in the future). You need to solve you cash flow issue first, i.e. you need to get your cash flow in order such that you have at least as much money coming in (income) as you doing going out, (expenses). Once your in that situation, then start scraping up money to pay an attorney to file BK.