Creditwrench teaches the secrets of the debt collection industry and how to defeat their abusive practices without lawyers. We know how to win!
Saturday, February 09, 2008
Should I file bankruptcy?
Question: I have credit card debt in the amount equally my yearly salary. At this time my creditors have hired collection law firms to pursue me. They have refused any payments less than a few thousand dollars at a time, and I cannot pay that. They have sent me letters telling me I am going to arbitration. I am terrified they will garnish my wages. Should I just declare bankruptcy?

Answer: Bankruptcy isn't a good option at all. It is very expensive, does not necessarily get the creditors off your back as they sometimes come back years later and try to get a judgment regardless of your having filed bankruptcy. Bankruptcy also leaves a permanent record which will stay with you for the rest of your life.

While it does have benefits it has a lot more drawbacks than it does benefits. So why do that when there are better alternatives? How about filing bankruptcy another way which costs a lot less money and leaves no record to follow you for the rest of your life? Wouldn't that be better?

Well, let me assure you that there is a better way and that is to learn what they do to you that is illegal and sue them for their violations in federal court. Once you start doing that your debts will go away and never return because you have a legally enforceable contract which they agreed to and signed which says they are not going to pursue the debt and must take it off your credit reports, can't sell or assign it to anyone else and can't discuss the debt with any other party. On top of that they pay you for your court costs instead of you paying them. To sweeten the pot even more you don't pay their attorney anything and they might have to pay you attorney fees for your time and trouble of going to court and maybe even some serious damage money on top of all of that.

Now you tell me why anyone would run to a bankruptcy court to take a beating when a far better and less expensive alternative is available. Of course, there are several answers. One is they just didn't know such a thing was possible. Another is they want to find some easier way out of their mess and would rather take a beating then do a little homework. There may be other answers of course, but those are the only two I can think of at a moments notice.

They are threatening you with arbitration? Well, that is a bit scarier because unless you are willing to really get down and do some serious homework they will get an award and take that to your local court, have it reduced to a judgment and then go after your wages or other assets. But just like anything else arbitration can be beaten too. It is just more difficult to do. I have students who are filing federal RICO suits against NAF, Wolpoff and Abramson and other law firms.

Now then, I have mentioned that there is another way that is better than bankruptcy and that better way is the Creditwrench way. You can learn about that by reading this blog and by visiting
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