In response to questions we received from clients and prospective clients in New York City, Bronx, Queens, Manhattan and Westchester, in a series of 4 posts we are exploring the most common alternatives to personal bankruptcy for New Yorkers faced with money problems.
A prior post on our blog I Live in New York and Am Considering Bankruptcy — Should I Try Negotiating with My Creditors First? covered negotiating directly with creditors and/or collectors.
A second post I Live in New York and Am Considering Bankruptcy — Should I Try Debt Settlement First? addressed so called debt settlement or debt negotiation.
A third post I Live in New York and Am Considering Bankruptcy — Should I Try Credit Counseling First?
addressed credit counseling as an option.
In today’s post we will explore whether doing nothing is a viable option and what it means to be judgment proof.
Instead of Bankruptcy Should I Do Nothing — Am I Judgment Proof?
Unfortunately many people with financial problems by default seem to select the “Do Nothing” approach. This is the “ostrich approach” (the large bird that can’t fly that sticks its head in the sand when there is trouble). Unlike fine wine, personal financial problems don’t age well (they age more like fish left out in the hot sun).
If you have financial problems and ignore them they are likely to follow a very predictable path – COLLECTIONS followed by COLLECTIONS LAWSUIT followed by JUDGMENT followed by JUDGMENT ENFORCEMENT including wage garnishment and bank account seizures. If you deal with the problem at any early stage you may be able to nip it in the bud before it becomes a collections lawsuit or a judgment. By the time you are faced with collections lawsuits and judgments, doing nothing will usually not help you. Your creditors will not sit back and do nothing – they will most likely move forward in the collections process to try to get judgments against you and to enforce those judgments.