At some point in almost everyone’s life we get to the point where we just through up our hands and say “Enough: My debts are too high, so I’m just going to stop paying!”
For some people that may be the correct option, but it does have one significant danger: If you stop paying, it is possible that your creditors will take you to court, sue you, and attempt to garnishee your wages. If you own property, like a car or a house, they could attempt to put a lien on your property, seize it, and sell it to repay your debt.
If you currently own no property or have no wages, you are “creditor proof”, so doing nothing may be an option. If you get a pension or welfare, it is unlikely that those payments can be garnisheed, so there may be little risk of a garnishment. You could open a new bank account at a new bank that is not known to your creditors, and continue on until your situation changes.
However, if you do have a job, doing nothing is probably not the correct option for you. You need to take action. Try contacting your creditors and working out a repayment plan. If you need help, a credit counselor can meet with to determine if a debt management plan is the correct solution for you. If you still have good credit, a debt consolidation loan is another possible option.
If you live in the United States, a Chapter 13 Wage Earner Plan is a good personal bankruptcy alternative. In Canada, a consumer proposal is an excellent solution in many cases.
The point to remember is that doing nothing may be an option, but there are many other bankruptcy alternatives, so research your options and decide on the option that’s best for you.
Posted by Editor Bankruptcy Alternatives @ 2:37 pm