I was laid off 6 months ago and have fallen seriously behind on all bills except rent(includes utilities) and phone, and my car pymts are only a little behind. So far nothing has gone to a collection agency. I had a perfect credit rating all my life before this. I own no property or assests, except my car, which is financed. I have only unemployment income, except I took a low-paying temp seasonal job for Christmas. I'd like to put all this behind me via bankruptcy, but some friends say that since I'm judgement-proof I shouldn't have to. What do you recommend?
Bankruptcy is not good for everyone's situation. Do you have to file bankruptcy? Of course not. Can you? Yes. Should you? That's a question on you can decide, once you weigh the many factors.
What are those factors? In my opinion:
* your age
* your earning history
* your education background
* your ability to handle stress
* your desire for closure
You may be judgment-proof today, but depending on various factors, you may not be forever. If you land your dream job next year and no longer qualify for Chapter 7 bankruptcy, will you kick yourself? If you can't do a Chapter 7 bankruptcy later on, are you prepared to look over your shoulder for years, possibly decades? Judgments can be renewed and follow you.
As an aside, keep up on those car payments if you want to keep it. Repossessions turn into deficiency balances, which can also become judgments.
What should you do? I can't say. Sometimes, the cost of not filing bankruptcy can be greater than the cost of filing. See a lawyer and get your options, and then make a decision based on how you weigh the variables.
Good luck to you.
Would that the answer to your simple question is as simple as you wish. Mr. Antico is correct. Bankrtupcy has costs and benefits. It is a judgment call only yhou can make to determin whether the benefits justify the costs.
Be aware that nobody is ever judgment-proof. This is a term carelessly bandied about by the half-informed. Regardless of your circumstances, any creditor can sue and take judgment. You may well be "collection-proof" at least today. Tomorrow, you may have income to protect and will need a bankruptcy discharge to preclude garnishment. Since none of us has a working crystal ball, you might consider postponing this decision until more is known. An accident or health crisis could add substantially to your debt before your have income to protect.
Best wishes for a favorable outcome, and please remember to designate a best answer.
Whatever friend told you you were judgment proof is naive, and you should not be listening to them. While more information is needed to be thorough, the short answer is that while your current status may make execution upon the judgement difficult, you may find your self surprised when down the road you either inherit land, or obtain gainful employment, and you are subject to a judgement lien, or earnings withholding order.
Confer with a lawyer, think about the big picture as it relates to your life goals, your standard of living, and your moral needs.
Best of luck.
It is hard to add to what Mr. Antico has said here, except that soon the collection agency calls are going to start and these people can be relentless. The stress of the persistent calls, followed by lawsuit and garnishment are more than a lot of people can tolerate. Filing a chapter 7 bankruptcy will allow you the peace of mind that you deserve. Again the creditors may not be able to collect from you today but it is in your best interest to protect yourself against the inevitable. The benefit of filing a chapter 7 Bankruptcy today far outweighs the cost you will be saving by not filing.
I need more information to see if bankruptcy is right for you.. I recommend that you call me for a free consulation. I need detailed information about your assets, debts, income and expenses. I am guessing that your only income now is unemployment and that all of your assets are exempt, but I need real information. You do not say how much debt you have. It is also important to know what your income was before you were laid off., and what you anticipate your income will be in the future. If you are eligible to file bankruptcy now, but might be making too much money to qualify for Chapter 7 later, you may want to consider filing bankruptcy sooner instead of later.
Being judgment proof right now doesn't mean a creditor can't get a judgment against you. It only means that at this moment you do own any property that can be taken by the creditors to satisfy a judgment. It's a mistake to rely on friends to assess whetherr you aree in fact judgment proof or other legal advice unless they are lawyers. In CA, a judgment is good for 10 years can carry up to 10% interest and can be renewed unlimited number of times. At some point, for example, perhaps you might be earning enough wages for the creditors to garnish it.
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