Legal Question in Credit and Debt Law in New York

Re: Defaulting on credit card debt

You have a substantial amount of debt and might want to consider bankruptcy. In your situation, the most important issue, as already noted in a previous response, is the amount of stock you own and whether it is held in exempt accounts. If the stocks are held in retirement accounts, such as an IRA, 401(k), etc. they would be exempt and you could file a Chapter 7 bankruptcy, keep the stocks and discharge your credit card debts.

Do not pay back any family members if you are considering bankruptcy. This would be a preferential payment that a bankruptcy trustee could potentially recover from family members that were paid back.

There are many variables that will determine whether bankruptcy is an option for you. Please contact my office directly if you would like to discuss further. Or visit my website at amdlaw.com for more information.

Re: Defaulting on credit card debt

If you default on credit cards debt, typically 1st your account gets turned over to a collection agency for collection efforts (calls and letter). If you don't pay at that stage it then typically gets sent to a collections law firm to file a lawsuit against you.

If the creditor gets a judgment the creditor�s attorneys can seek to enforce that judgment against any non-exempt assets that you may have. Whether the stock is exempt or not would depend on what type of account you have it (i.e., your own name, IRA, etc.).

You don't mention how much stock you have. In any event you should consult with an attorney experienced in debtor-creditor matters and bankruptcy to learn your options.

Please feel free to visit the Frequently Asked Questions (FAQs) and Blog postings on our website at www.starrandstarr.com for further information.

Good luck,

Re: Defaulting on credit card debt

I uderstand your problem. I did a lot of work for Legal Aid in this area with senior citizens and you (i) want to uphold your debts and (ii) do not want to wake up every day to letters and telephone calls demanding money.

1. The way this is handled when you have some money is: (i) pay back about 75+% of the debts to people (ii) collect your assets (bank accounts, etc) and then look to negotiate with the credit card accounts.

2. The negotiation is done by collecting all of your assets and all of your debts and then letting each creditor know who all of the other creditors are and the amount of the debts and also the amount of money you have to pay them.

Then you ask them to accept enough so that most of them will not pursue you.

3. This does work. not always, but it does and can work.

4. If this does not look like it will work for you; there is always the difficult choice: live with the debt collectors or file for Bankruptcy CH7.

This is a difficult choice and I am available to assist you in whatever choices you make.

Andrew Nitzberg