For some people on Social Security, Doing Nothing About Debt Problems Works Fine
I tell a couple people a month there’s no reason to file bankruptcy. Most often older people who have no income except for social security. For them, there’s often no reason to file bankruptcy.
Here’s why.
People File Bankruptcy for Three Reasons
People file bankruptcy for three reasons. So the creditors can’t call you. So you don’t get garnished. And to get back to good credit. (After bankruptcy, people also sleep better and handle their problems better.)
Many people living on social security won’t ever need good credit. This is a hard one for some people to take in. Does your car have more miles ahead of it than you have on you? Then you will probably never need to buy another car. And your social security income is likely not enough to afford a house. So, you don’t need to worry about your credit score or your “good credit.”
They Can’t Garnish Your Social Security
If all you have is social security, they can’t garnish you. They can’t garnish it from the social security administration and they can’t garnish it from your bank.
To stop debt collector harassment, tell them “I refuse to pay.”
That leaves the collection calls. When you get collection letters, write them back. Just write on it. “All I have is social security. I can’t pay and I refuse to pay.” The words “I refuse to pay” can give you additional legal rights. Tell them the same thing on the phone. Nearly all the debt collectors will give up after being told once or twice.
That’s it.
Careful
Now do NOT follow this plan if you have other money somewhere. Or real estate. Or there’s a chance you could end up inheriting something. But for many people who just have social security, this plan of “doing nothing” works fine.