I am 3 times laid off in 3 years. I only have unemployment insurance coming in to support me and this may run out soon. I have no assets at all. I have lost everything in the last 3 years of lay-offs. I rent and own nothing else of value with no savings and am having difficulty finding a job to even apply to in my profession to the extent that I am considering starting my own home based business in order to get some money coming in.
I cannot afford even the $100 month payment that the collection attorney is asking for in court (yes, they have filed suit against me and a second one did so last week for a total debt owed of $7,500 on 2 credit cards) I offered to pay them (pre-trial) a lesser amount on the debt and a smaller payment with lower interest, but they refused. I am not trying to avoid my debts, bu t I am struggling to stay afloat and my car payment is a priority in that if I do not have a car I cannot find a job, do a business, or get to a job.
I am juggling paying everything weekly between the rent, utilities, gas, car payment, food, etc. I cannot declare ch. 7 as I did so in 2005 after my first lay-off. I often feel trapped and hopeless about any future job-wise or financially. One attorney I consulted for free advised me to pay nothing, close my bank account, and file ch. 11 if I ever become employed again. I am in Ohio and unemployed 10 months now. Thank you.
Should I agree to a payment plan with a collection attorney at 23.9% interest on an inflated credit card balance through the court or am I judgment proof for now? If I do start a small business can they seize my business assets through this judgement if it goes through?
Well I don’t know about being judgment proof, they can go for a judgment but trying to collect on it is another matter.
I do have some strong reservations about you entering any repayment promise at this time. Honestly, as dynamic as your current situation is you can’t really afford to make a promise to pay that has no likelihood of success based only on unemployment benefits.
I’d just back burner the collection efforts at this point and not deal with them right now. The primary focus needs to be on getting a job and bringing income back in. Once you can do that then we can go back and worry about making payment arrangements or a latter bankruptcy.
So to wrap it up, it sounds like the best thing to do right now is, nothing.
I’m also worried about the small business route. Even in the best of times it is hard for a business to survive and make it. On top of that you have your current emotional desperation to make money to care for yourself. For most people the combination of underlying issues would make it darn impossible to build a successful business at this time.
However, if your own small business would allow you to start and grow your business without an investment in money and you continued you search for a job while you were developing your business then it could be a good distraction for you and provide you with an opportunity for new income.