I Have No Assets And Collectors Are Coming After Me. Should I Go Bankrupt? – Tim

“Hi Steve,

Great Site, Great Photo’s. How do u make a living offering all this free help?

My Question, I have around $100,000 in Credit Card Debt. I don’t own a home, it’s in my wife’s name. I lease a car 2002 Model payments $299 per month, car is worth less than the lease 100,000 Miles on it.

I am self employed and work from job to job, am a wedding photographer. I work through a Sole Prop LLC. My work is very sporadic as since digital camera’s came out many many people take the pictures themselves. Also in this economy no one has the kind of money I was making a few years back 3000 to 5000 per wedding.

Don’t know how to do much else, have to stick with it and hope that times will change. In the meantime the Collectors are calling everyday, I have tried to set up payments, got late on one with citibank and they raised the interest to 29% and sent it to their collection dept.

What’s the worst they can do to me? If they sue me, I own no assets, I don’t have a steady income, so they cannot garnish a wage. I guess they can freeze my account, except there is very little in it as and when I earn it and my pay my home bills with it.

I want to pay them but I need time. I am guessing my Credit Report is damaged any way, but I figure judgements cannot be as bad on my report as a Bankruptcy? Please correct me if I am wrong. Should I let there be judgements till I can pay them? or should I go bankrupt? Again great site, found it by accident will pass it on to everyone I know,



PS: My wife keeps saying just declare bankruptcy, it’s not as much of a stigma as it used to be. With everyone and his mother declaring bankruptcy during this time, and she keeps telling me about the Wall Street Bankers and the Bailouts everyone is getting. My thoughts if everyone declared bankruptcy, America would be bankrupt! So in my mind it’s still not a good thing. But we are not able to save any money, lost our medical insurance, starting it up again. Have 4 kids, under 10. and BTW, in Bankruptcy won’t they ask how I can afford medical insurance and i should pay that money to the cards first? I hope all this is not too many questions for you.”

Dear Tim,

This site does take up a great deal of my time but for the most part, it is a labor of love. Having lived through financial problems myself, and bankruptcy, I’ll never forget what that felt like. I work on this site as my way of giving back to others.

I am very fortunate that my income is not dependent on any one thing. Not only do i run a number of sites, that produce advertising revenue, but I also produce aviation DVDs and rescue rare aircraft manuals.

My photography is my outlet. I never want to turn that into a business for me since I just want to keep it as a joyful exercise. I was doing a lot of stock photo work but now I just submit shots that I enjoy.

My hat is off to the wedding photographer and I agree it is a tough economy and time to get good gigs but people are still getting married and photographers are still being booked. I would argue that your lack of new business is also tied to your debt in a way.

Debt has many manifestations in our lives. It can result in depression, lack of clarity, inability to follow through on plans, loss of sex drive, desperation, murder, suicide, etc. Debt drains us of our hunger and excitement for tomorrow.

As a creative soul I would bet that the underlying pressure that you are feeling is muting the creativity and drive inside of you. There are two times in life when people want to make sales, either through inspiration or desperation. Trying to sell your services when you are desperate or deep in debt never seems to never be successful.

There is no reason why you have to go bankrupt. If this current path is working for you, stick with it. But I would argue, from one photographer to another, that bankruptcy will close this dark chapter behind you and allow you to focus more on the light in front of you than what is chasing you.

I recommend bankruptcy a lot these days but it is not because I think people should just walk away from their debts. On the contrary, I think when people can, they should honor their debts. But the reason I think I suggest bankruptcy so often is because I value the life ahead of you as more important that the mistakes behind. We can’t change the past, but we sure as hell can change the future.

And if mass bankruptcy leads to the higher cost of credit for people that should not have it or for those that are carrying balances, so be it. Creditors have been giving out credit like crack for the last 15 years and share an equal blame, if blame must be issued. They pass credit out to people that have no right to have it or they hand it out with absolute demands for a minimum payment in a life that does not have a guarantee that tomorrow is going to be as good or better than today.

It is unreasonable to expect that you are going to make a dent in the debt that you owe. I think I agree with your wife, not because bankruptcy has less stigma or everybody else is doing it. You should not go bankrupt if you think you are a lemming chasing the pack. You should go bankrupt because it is the right thing for you to do in your situation.

I think you have a greater responsibility as a provider and father to make sure that your children as safe and protected properly. That means you need to be able to save money each month, pay for medical insurance, provider safe shelter, and help put food on the table. How are you going to do that in your current situation?

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

As long as you are in this situation you will not be able to do that and the end result is that the children end up paying the price for the financial mistakes of the past.

I never feel that the dodging creditors and collectors or letting them sue you is a good way to go. If you can’t pay and there is no expectation that you can pay and the situation is robbing your children of a safer future, then I would argue that you have a greater responsibility to end this situation with bankruptcy to close the door on it.

If you don’t go bankrupt it will wear on you, it will drain you creativity and sap your ability to effectively market your services. Your situation isn’t as if you owe someone a $100, Dude, you owe $100,000 and you are finding it tough to get income.

If you go bankrupt, there is no reason why you can’t repay your creditors if you feel a moral reason to do so. I did after I went bankrupt and I was surprised that half the creditors told me not to send payments or sent back my checks. They didn’t want me to repay, even though I was trying to. Crazy!

Going to go see a bankruptcy attorney and get the facts does not mean you are going to file. Think of it like you are going to go check out the new Nikon camera body specifications to see if it is right for you. Just call a local bankruptcy attorney and go in for a free bankruptcy consultation. After the meeting, come home, discuss what you learned with your wife and take a day or so and ponder about it.

My best is that you will decide to go bankrupt after you get all the facts and consider what I have said about your creativity and children. But please let me know what you decide to do.

P.S. For the rest of your questions I didn’t answer, ask the bankruptcy attorney at your appointment.

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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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