Monday, February 25, 2013
Dealing with Debt, You Have the Right! You do NOT have to go bankrupt.
They are called debtors rights. Get to know what they are and exercise them aggressively.
You have much power if you know what your rights are. You don't have to live as slave to the lender.
There are things that debt collectors and lawyers can do, and many more they cannot. You don't have to talk to them. You can shut them off. It's your right.
They will sue you. But if you are broke, they can get nothing from you. A judgement proof debtor is really hopeless for one trying to collect. Don't commit suicide. Don't get drunk. Just keep your head up and your profile down... and you can get out of this.
Figure out if you're judgment-proof. If your income and property are legally protected from creditors, you can still be sued, but the creditors won't be able to collect. That's known as being judgment-proof. You may be judgment-proof if you own very little and have no income, or if all your income is from Social Security, because Social Security payments are legally protected. The list of property that's exempt from creditors' claims varies by state but often includes clothing, household items and a car worth $2,000 or less.
If
you're judgment-proof, you will not need to file for bankruptcy, You can just send a letter to your creditors telling them to stop
contacting you. Sounds simple, but it will work if you have the courage. Going bankrupt will haunt you for your whole life. Most people never need to... if they know what to do. Read on--
There is a hitch in being judgment-proof: If your creditors go to the trouble to sue you and get a court judgment, they may be able to collect from you if your circumstances improve in the next 10 years. A bankruptcy filing, by contrast, would legally erase the debt. The filing will stay with you forever. Keep your head down for ten years. After a few they forget all about it anyway. You become more work than you are worth to them.
There are a lot of things a creditor CANNOT take from you even if they get a judgement, even if you have some stuff. They can't kill you and they can't take your shoes. In fact the list of what they cannot take is fairly long.
Items exempt from collection
They can collect but they can't take everything you have. Don't be afraid of them. Bark is greater than their bite.
The amount of what you earn that can be Garnished is regulated. In Illinois it's 15%. SO, you are pretty well protected. There are strict laws. They don't want you to starve. So, relax. You will spend more foolishly than the garnishment can take. Wage garnishment is more a threat than a reality. Don't let them fool you.
Even after all that there are people who fear debt collection and consider harming themselves from Shame. There is no shame. People get into hard times. It will make you stronger if you fight and win. AND God is the redeemer of those who trust him in these hard times. There are laws, they are there for your protection, Renumber the Bible Verse all creditors know, "Anyone who is among the living has hope--even a live dog is better off than a dead lion!" Ecclesiastes 9:4
There are plenty of books and articles on this topic. There are a lot of services you hear about. Not all are good. Not all are right. Some are designed to get you to go bankrupt which is KaChing to the lawyers. Some want to get you into debt consolidation or debt forgiveness schemes. Some of those are run by credit card companies. It pays to be suspicious. They will take your money and give you no results.
Educate yourself. You don't have to live under the oppression of debt. Someday you will come out of it, the sun will shine; you will walk free and prosperous. The way to get out of debt ultimately is stop borrowing. Live modestly. Spend no money. Generate any form of Income you can find that is legal.
You will someday find yourself among the successful and respected of your generation.
I did, and if I did, you can too.
You have much power if you know what your rights are. You don't have to live as slave to the lender.
There are things that debt collectors and lawyers can do, and many more they cannot. You don't have to talk to them. You can shut them off. It's your right.
They will sue you. But if you are broke, they can get nothing from you. A judgement proof debtor is really hopeless for one trying to collect. Don't commit suicide. Don't get drunk. Just keep your head up and your profile down... and you can get out of this.
Figure out if you're judgment-proof. If your income and property are legally protected from creditors, you can still be sued, but the creditors won't be able to collect. That's known as being judgment-proof. You may be judgment-proof if you own very little and have no income, or if all your income is from Social Security, because Social Security payments are legally protected. The list of property that's exempt from creditors' claims varies by state but often includes clothing, household items and a car worth $2,000 or less.
There is a hitch in being judgment-proof: If your creditors go to the trouble to sue you and get a court judgment, they may be able to collect from you if your circumstances improve in the next 10 years. A bankruptcy filing, by contrast, would legally erase the debt. The filing will stay with you forever. Keep your head down for ten years. After a few they forget all about it anyway. You become more work than you are worth to them.
There are a lot of things a creditor CANNOT take from you even if they get a judgement, even if you have some stuff. They can't kill you and they can't take your shoes. In fact the list of what they cannot take is fairly long.
Items exempt from collection
| Item | Current exemption | ||||||||
| Furniture | $15,000 | ||||||||
| Books | $500 | ||||||||
| Tools | $5,000 | ||||||||
| Stock in trade | $5,000 | ||||||||
| Fishing equipment | $1,500 | ||||||||
| Sewing machine | $300 | ||||||||
| One computer; one TV | no stated dollar limit | ||||||||
| Cash or savings (execution) | $2,500 on any day | ||||||||
| Automobile | $7,500 wholesale, $15,000 for disabled or elderly | ||||||||
| Personal property | $1,000 to $6,000 | ||||||||
| Jewelry | $2,500 | ||||||||
| Bank account (trustee process) | $2,500 |
They can collect but they can't take everything you have. Don't be afraid of them. Bark is greater than their bite.
The amount of what you earn that can be Garnished is regulated. In Illinois it's 15%. SO, you are pretty well protected. There are strict laws. They don't want you to starve. So, relax. You will spend more foolishly than the garnishment can take. Wage garnishment is more a threat than a reality. Don't let them fool you.
Even after all that there are people who fear debt collection and consider harming themselves from Shame. There is no shame. People get into hard times. It will make you stronger if you fight and win. AND God is the redeemer of those who trust him in these hard times. There are laws, they are there for your protection, Renumber the Bible Verse all creditors know, "Anyone who is among the living has hope--even a live dog is better off than a dead lion!" Ecclesiastes 9:4
There are plenty of books and articles on this topic. There are a lot of services you hear about. Not all are good. Not all are right. Some are designed to get you to go bankrupt which is KaChing to the lawyers. Some want to get you into debt consolidation or debt forgiveness schemes. Some of those are run by credit card companies. It pays to be suspicious. They will take your money and give you no results.
Educate yourself. You don't have to live under the oppression of debt. Someday you will come out of it, the sun will shine; you will walk free and prosperous. The way to get out of debt ultimately is stop borrowing. Live modestly. Spend no money. Generate any form of Income you can find that is legal.
You will someday find yourself among the successful and respected of your generation.
I did, and if I did, you can too.
