You have an outstanding bill. Or you have a bunch of outstanding bills. But you don't have enough money to pay, and the creditor has turned it over to collection. You ask to set up a payment plan, but the collector refuses.

What happens next? Generally, after a several months of collection calls and letters, you get a letter from an attorney that says something like "We are ABC Lawyers. We have been hired by Discover Card to collect an account you owe them. They tell us you owe $5,315.00. If we do not hear from you within 30 days we will assume that this is valid." This letter is sometimes called the mini-Miranda letter (like the Miranda warning in police shows (You do not have to say anything...). If you have a genuine dispute with the debt, now is the time to write and dispute the debt. A phone call probably won't do the trick.

In a small piece of good news for people who need to file bankruptcy, the value of items you can claim as exempt in bankruptcy under the federal exemptions increased as of April 1, 2022.

I recently came across another case that reinforces the importance of

being accurate when you fill out your bankruptcy papers. For background, when you file bankruptcy, you must complete a list of assets, and give values. Then you must sign the papers "under penalty of perjury". By doing so, you swear that everything in them is true, including that your forms are a complete listing of all of your property, income, and debts.

Unfortunately, the answer is “NO, you can be sued even though you are in a debt settlement plan.”

A major benefit of filing bankruptcy is that it can lift a load of stress off of you. Before you file you may worry about judgments, garnishments, and repossessions. Often you get call after call after call from collectors. The caller may tell you that you will be sued. That may be true, but no one is going to jail just because you didn’t pay a credit card debt.