Debt Bankruptcy

Straight Bankruptcy Usually Costs Less, and It's Quick! If you have very few assets, and many debt, and not enough income to pay the debts off, even on an extended plan (more about that later), then you will probably have to file straight bankruptcy. District Court in your district, along with $50. Ready anything you sign very closely, and don't agree to repay any debt that you have already discharged through your bankruptcy! Also known as the Wage Earner Plan, Chapter XIII is different from straight bankruptcy in two most important ways: you must pay off the entire amount of your debts (no 10 cents on a dollar here), and within a 3 year period. Often, if the creditor threatens to sue you, the most effective thing you can do to stop him (besides paying the debt!) is to tell him frankly that, if he sues you, you have no other recourse than to declare bankruptcy. Creditors know well that if you file bankruptcy, the chance of their getting payment in full on their overdue account is very low, so it is in their interest to try to ease your credit burden at least for a while. Make Yourself Judgment-Proof If a creditor goes ahead and sues you, and gets a judgment against you, he can then get a court order directing the sheriff to seize your personal property, sell it and pay the creditor the amount of your debt. However, he can only do this if he knows, or can find out, where you work. Yes, a creditor or agency can write you letters, call once a day seeking payment, try to bring legal action against you, but he is forbidden by law to harass you or invade your privacy, or use deceptive means to get you to pay your bills. There are books that provide detailed additional information on personal bankruptcy, and include sample letters with which you can try to arrange stretch-outs on your own with your creditors before bankruptcy is necessary.

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