Conquering Your Fear of Creditors…With Bankruptcy Skip to main content

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Conquering Your Fear of Creditors…With Bankruptcy


You know your creditors: those nice folks who give you something you want -- goods, services, or money -- in exchange for your promise to pay them back at a later date.  In practical terms, a creditor can be a credit card company, a bank, a hospital, your local dentist, or any person or company to whom you owe a debt.

But, in these unfriendly economic times, [exactly] what happens when you can’t or won’t pay back that debt? What should you do when your creditors come calling? Can you keep creditors at bay or are you bankruptcy bound? Conquer your fears of dealing with your debt and remember the bankruptcy basics necessary to keep you from a creditor crunch.

Remember: Filing a Lawsuit Against a Debtor is not a Creditor’s First Choice
Keep in mind, creditors normally don’t want a lawsuit any more than you do. In fact, a creditor will not normally file a lawsuit against you until after many months and sometimes years of pursuing you for non-payment. Plus, creditors know that even if they file a lawsuit, it can be quickly neutralized by your bankruptcy filing—dispensing with your unsecured, and in some cases, even secured debt.

To Answer or Not to Answer
When you fail to respond to a creditor’s lawsuit, the creditor will gain a default judgment. This judgment will give the creditor the right to take certain collection actions against you, which could include seizing your bank accounts or garnishing your wages. In the alternative, if you respond to a creditor’s lawsuit—providing an “answer”—it can buy you precious time to secure more savings or take an excellent opportunity to file Chapter 7 or Chapter 13 bankruptcy.

The Consequences of Judgment Day
A judgment is a judicial order that, if it is not obeyed, will invoke legal consequences.  In extreme cases, a failure to pay a judgment filed on behalf of your creditors could result in a bench warrant issued by the court for your arrest. Keep in mind, only bankruptcy can help you avoid this type of judgment.

Settling What Constitutes A Settlement
Creditors file lawsuits because they simply want some kind of payment and, in the process, are often willing to settle for a lesser amount for repayment. Yet, while creditors want these types of settlements, it’s important to make sure your settlement offers are in writing.  Additionally, you should also be wary of so-called “debt settlement” firms who claim they can settle your debts for pennies on the dollar. Remember: you don’t need a firm to settle your debts…creditors filing lawsuits often offer settlement amounts; but the forgiven debt may be taxable. In the end, keep in mind that debts settled or discharged in bankruptcy are not taxable.

Worried About Wage Garnishment?
As mentioned, any creditor who wins a judgment against you can also garnish your wages or seize your bank accounts.  Only bankruptcy can stop your wages garnishment or a bank seizure order to raid your valuable accounts.  If a creditor seizes your wages or accounts after you file bankruptcy, you do have legal recourse and it’s even possible to get those assets back.

Knowing a qualified bankruptcy attorney can also help you conquer your creditors and face your financial fears, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future.  The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-888-234-4181, or during the off hours, you can make your own appointment right online at Simply click on the yellow “FREE Consultation Now” button.

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