Doing nothing kind of speaks for itself, but for the record in terms of debts, your credit report, losing assets, and your ability to get loans and new credit cards, it means paying absolutely nothing. You don’t pay the credit card bill and any other bills you have. The more bills you have, the more problems you face.
Say you have $10,000 in credit card debt; you have options of filing bankruptcy, to negotiate with creditors yourself, and another option of taking no action at all – not paying on debts, not trying to protect assets. It rarely works. This blog guide will help you see if doing nothing actually works for you.
Your Options
As stated above, one option many take is to file bankruptcy in order to discharge the debt with Chapter 7 or pay on the debt with Chapter 13. You can also negotiate with creditors on your own, contacting them and negotiating a rate. There are many other options, but doing nothing is quite common, where you decide not to act on the problems because you have little if nothing to lose.
Choosing Bankruptcy
If you file Texas bankruptcy, your options are limited to Chapter 7 or Chapter 13 as an individual. Chapter 7 is the most common option for anyone with sizable debts. Chapter 7 will discharge almost all your debts, giving you a fresh start financially. Chapter 13 is less common, but allows you to keep more assets in some cases than Chapter 7; it’s also an option if you make too much money for Chapter 7.
Negotiating with Creditors
Technically, you could choose a debt counseling agency to pay on some of your debts, but they do nothing you cannot easily do yourself. You can contact your creditors and explain to them you want to start a payment plan; here you have nothing to lose, but if you miss a payment the plan might stop. Quite often they will be willing, because if you’re forced to file bankruptcy they may get nothing. However, sometimes you simply cannot afford to pay them anything close to the money owed. You are also not legally protected if you miss a payment.
Doing Nothing
Our final option, doing nothing, occurs when you decide to take no action to pay debts. It’s actually used by some in Texas and across the country. Why? If you have no assets to be taken, if you have little to no income coming in, creditors have few option in getting money back from you. The only problem is, few of us have nothing. Any assets of value can be taken. If you have a job or outside money coming in, it can be taken. That’s the key problem with doing nothing: it only works when you have nothing.
Choosing One
Bankruptcy is not always the best option, but in many cases the advantages far outweigh the downsides. At least negotiating with creditors is preferable to doing nothing as well. In the end, it’s up to you. If you need some guidance, an experienced Texas bankruptcy lawyer can guide you in the right direction.
