Bankruptcy. The Great Equalizer. When I meet with clients that are dealing with a debt buyer lawsuit one of the first questions I ask them is if I am able to help them eliminate this one lawsuit, are there five more lurking out there ready to take its place?
As part of your overall approach to dealing with a debt collection lawsuit you need to evaluate what your total debts are and if it is worth the time and effort that will be required to prevail against the debt buyer.
Even if your case against Midland Funding is a slam dunk you haven’t really won very much if you wake up the next morning and get sued by Portfolio Recovery or some other debt buyer. If you are dealing with a mountain of credit card debt or have medical bills coming out of your ears, you may want to consider bankruptcy. I know that bankruptcy is almost never a first choice, but you need to view it as one of the tools you can use in dealing with your debt problems.
What can bankruptcy do? Man…what can’t it do! Don’t get me wrong. Bankruptcy has its downsides. It will be tough to get a loan, your credit score will be shot, and you won’t have access to credit. But if you are dealing with huge amounts of debt, how is this much different than your situation right now? Bankruptcy, particularly chapter 7 bankruptcy, can completely eliminate your unsecured debts – and that includes the debt that you are being sued on.
Immediately after your bankruptcy case is filed the court will issue an order that stops all collection efforts against you. This means that the collection lawsuit you are dealing with will stop immediately. Better yet, the underlying debt of that collection lawsuit will be eliminated through the bankruptcy filing.
Bankruptcy has certain disadvantages. But the one advantage that it does have is it shifts the power to you when dealing with your creditors and your debt.
Thinking about bankruptcy? Educate yourself. Here are a couple good resources: