Stop paying or file bankruptcy: What to do?
Q: I read in the latest AARP magazine, it was better to just not pay your credit card bills instead of bankruptcy. Is that true? What are the consequences? I only get a little over $ 1,000 per month in Social Security, and that is my only income. I'm 76 and living in retirement homes. I am broke and can hardly use one of the things. I always want to pay my rent on time, so I'm not there in difficulty. Please help.
A: In some cases it may be more appropriate to simply stop paying your credit card accounts instead of filing for bankruptcy, but that does not move come with consequences. Some are also more pay their credit card bills, rather than filing bankruptcy, because protected their claims are on social protection in most cases of seizure by the Social Security Act (if your creditor is the IRS or other federal agency, your benefits could be garnisheed) and they do not own a house or other large asset on which placed a lien to secure payment could be.
But just because the credit card issuer can not garnishee your Social Security benefits and you have no real estate or other assets that do not necessarily mean, you should provide the backups by filing for bankruptcy skip.
If you stop paying your credit card bills, your card issuer eventually charge from the account – generally, if the account is not paid for 180 days – and turn it to collections either by selling the debt to an external collector or to an internal collector. Then you will start receiving calls collection. These calls can be can be very disturbing and will not end just because the debt collector you do not have the money to pay to tell.
The collection process can be up to the point where collectors escalate sued. You would have to appear in court or send documents to the court that your only income from social benefits to prove and you do not have enough income to pay the collector.
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