I have $39,000 in credit card and unsecured loan debt due to becoming disabled with Parkinson’s in 2007. Unfortunately, I used credit lines to make ends meet, and now I am at the point of no return. Of the $39,000, $30,000 is to 2 companies (HSBC and Chase). One will not work with me to get interest rates and payments to where I can pay off all debts in 5 years.
I am on Social Security Disability. A local bankruptcy attorney states that I am “judgement proof” in the extent that if sued and a judgement is rendered, I have no attachable assets. He recommended that I not even bother with bankruptcy. Do you agree?
Actually, I would not be quite so quick to dismiss it. Here’s why.
I’m sure that you are being pursued for these debts. And if not by the original creditors, then by subsequent companies that may buy and trade the debt for years in hopes of collecting. This means that collection activity, calls and letters will continue indefinitely.
For some the constant confrontations with collectors can be stressful and depressing. And while you may be judgment proof that still does not mean that you can’t be sued along the way.
So for me it really all comes down to not if you are judgment proof but if you just want to close the door on these debts and never have to worry about them again since there is no expectation you will be able to dig yourself out of this mess. The best reason for bankruptcy simply might be for peace of mind and that’s not a casual reason to dismiss.
I can’t say I’m a big fan of paying one of the creditors for five years. While I agree in principle that people should honor their debts I think you have a greater responsibility to make sure you are using what money you have coming in or available to protect yourself for the future since you are disabled. I’d rather see you save $15,000 and use it in the future for your care than spend $15,000 and eat dog food latter. But that’s just me.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.