When Bankruptcy May Not Be Appropriate for the Hopelessly Insolvent Consumer Debtor


Bankruptcy can provide several benefits under the right circumstances.  Thus, for example, the discharge of indebtedness available under chapter 7 is one of the principal reasons a person hopelessly burdened by too much debt would want to file for bankruptcy protection.  In some situations, however, bankruptcy may not be the right choice.  What follows are several situations where bankruptcy may not be helpful.

  1. A person who is totally collection proof will not achieve any significant benefit from the filing a chapter 7 case because creditors can do no real harm to them.  A person is “collection proof” if the person has no nonexempt assets that a creditor can attach or levy upon to pay down the debt.
  2. A person who is likely to fall further into debt as the result of medical bills or continuing financial problems may not achieve any real benefit from a chapter 7 bankruptcy. It may be better for these individuals to delay filing pending some indication that the incurrence of additional debt will abate in the future.
  3. A debtor that has few debts and strong defenses may be better served by litigation or settlements outside of bankruptcy court.
  4. Persons with decent income but too much debt might be better off scaling back their lifestyle and making more frugal purchase decisions.

In most of the foregoing situations, a client may be best advised that bankruptcy will almost always be available later and that a bankruptcy now may prejudice the right to file for bankruptcy in the future.  On the other hand, some clients may want immediately the peace of mind attendant to having debts discharged and being able to proceed with the “fresh start” that is provided by that discharge.  In any event, the client who can no longer pay his or her bills is better served by a careful consideration of the available options, including not filing immediately for bankruptcy.

If you are struggling to make ends meet because of too much debt, and there’s little hope in sight, call my office 914-385-1032 to make an appointment.  We’ll explore together whether bankruptcy might provide you with the help you need.


We are a debt relief agency, we help people file for Bankruptcy under the Bankruptcy Code. This Blog is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney-client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Author: westchesterbankruptcylawyer

https://www.avvo.com/assets/badges-v2.jsLawyer Ted Zink | Featured Attorney Bankruptcy

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