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JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
Experience:  Attorney in the practice of Bankruptcy Law since 1996
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I am in the process of writing to inform my creditors that

Resolved Question:

I am in the process of writing to inform my creditors that I am disabled with AIDS and Bipolar disorder. I have lived on disability income from Social Security and a very small disability retirement income from my old employer. I am currently in the process of writing my creditors to inform them that I am now unable to make even minimum payments on my accounts and that I am judgment proof. May I eliminate my debts by doing this or is it absolutely necessary for me to file for chapter 7 bankruptcy?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  JoeLawyer replied 8 years ago.
Hi David:

You may attempt to eliminate the debts with letters, but the creditors may or may not cancel the debts based on your letters. In my experience, they normally do not cancel debts based on letters, but they might in your case. The reason they do not normally cancel the debts is because they would rather keep the debt in tact in case you come in to some money that they can attempt to go after (insurance settlement, lottery, wages, etc), or, so they can sell your debt to collection agencies and make at least some money off of it.

Realistically, you may be judgment proof and there may not be a need to file bankruptcy even if they won't cancel the debts, but it still may be worth filing Chapter 7 just to stop the calls, collection attempts, and possible lawsuits.

If you are not judgment proof, then Chapter 7 may be a good option. Judgment proof means you have no income or assets the creditors can go after to get paid, such as garnishable wages, real estate, etc.

Many bankruptcy attorney offer free consultations, so it may be worth visiting one to see if your retirement is garnishable, etc.

I hope this helps and a positive feedback is always appreciated if this was useful to you.

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