- At Ginsberg Law Offices, we believe that bankruptcy is and always should be considered as your last resort. Before filing we will always discuss with you the alternatives to bankruptcy. Here are some options that frequently come up in these conversations:
- Do Nothing – if you do nothing, it is possible that nothing bad will happen. This is especially true if you are not working, own no significant assets and earn no income other than Social Security. Most creditors (with very limited exceptions) cannot garnish your Social Security money and if you have no assets you are effectively judgment proof.
Jonathan Ginsberg of our office as assisted several elderly, retired clients avoid bankruptcy by sending writing all creditors with a detailed explanation about why his clients are judgment proof and requesting that all claims be written off as uncollectible.
Similarly, if you are facing a foreclosure, it may make sense to do nothing and wait to see if the mortgage lender files the necessary paperwork in court to pursue a deficiency balance. Often mortgage lenders do not pursue deficiencies within the statutory time frame so there may be no reason to file bankruptcy.
- Do Nothing Now and Negotiate a Debt Settlement Later. If you are self employed and your assets are not easily found, you may choose to not contest civil suits filed against you, and allow a default judgment to be issued. Law firms that handle collection matters in high volume will often give up if they cannot find any assets. You may have to live on a cash basis for a few years but after several years, the plaintiff may very well be willing to accept pennies on the dollar.
- Negotiate a Debt Settlement. If your debt is primarily credit card debt, you may find that your creditors will accept 40 or 50 cents on the dollar once your delinquency hits about 3 months. You will need cash to make this strategy work but we have assisted several clients settle significant credit card debt for 50% or less.
- Propose an extended payment plan through a service like Credibility. We do not recommend any other “debt settlement company” (if you ever hear talk about “secrets the credit card companies don’t want you to know” run in the opposite direction as there are no such secrets).