My Husband Died and My House Was Destroyed by Hurricane Katrina. – Sandy

“Dear Steve,

My husband passed away 4 years ago and the following year hurricane Katrina severely destroyed my house. I FINALLY sold my house May 2008 for peanuts, but had to live off that money due to being unemployed since Feb. 2008. I draw
a pension from my late husband which is exempt from any garnishments. I’m not a dead beat. Bad things happed to good people.

I’m considering filing for bankrputcy but, I’m considred judgement/collection proof. I’ve spoken to several bankruptcy attorney’s and get conflicting answers.


Dear Sandy,

I’m so sorry to hear about the loss of your husband and your home. I can’t imagine how stressful that all was.

Thankfully you do have that pension from your husband. I know a very kind woman who had her husband pass away the day he got the forms to sign for his wife to get his pension in case he died. He left them at work by accident and was going to sign them the next day when he returned to the office. He never did.

If an attorney has told you that you are “judgment proof” because your income from the pension can’t be garnished if a creditor sued you, I believe that. But, and here is the big but, being judgment proof does not stop the collection calls, letters, notices and all the other nasty stuff that goes along with being past due on bills.

Even though you may be technically judgment proof it might still be worth considering bankruptcy simply because it is a legally recognized way to get your creditors to shut up and get off your back.

From what you’ve described about your situation, I don’t think your income situation is going to change and if you don’t go bankrupt then you’ll simply have to endure the collections aggravation you’ve been living with.

So for me, in a situation like yours, bankruptcy is less of a debt reduction strategy. It is however an appropriate quality of life tool to consider since it will close the door forever on those debts you are unable to pay. It will allow you to move ahead in your life without any further pursuit by creditors, and that seems reasonable in your situation.

Does that make sense?


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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