Worried about being sued

[karibaa]

I stopped paying all but 1 of my credit cards in Sept of 2015. My only income is disability and I have no assets to speak of (maybe 2K in my house and I owe more on my car than it's worth). My highest credit card I owe on is $7500 to USAA. Is it likely I will be facing a lawsuit for my credit cards if I have nothing to pay and my income can't be garnished? I've told my creditors my situation and they have stopped calling. Really trying to put off bankruptcy for a while....or forever : )

[LadyInTheRed]

Even if you had income that could be garnished, a creditor would have to sue you and get a judgment first.

It is possible that creditors will not sue you. If they don't, they will probably sell your debt and you may eventually be sued by somebody who bought the debt. Since you own a home, a current or future creditor may decide to sue you and then get a lien against your home. A creditor with a lien may be able to force a sale of your home if the equity is not protected by a homestead exemption. Most creditors are more likely to wait to get paid when your refinance or sell the home.

A judgment creditor may also try to get your bank accounts. While you may be able to keep them from getting the cash in the accounts if you can show it is all from your disability income, your funds would be frozen for a certain amount of time and it will be a big hassle.

A creditor may also come after your car after you pay down the loan, but I haven't heard much about judgment creditors going to the trouble of going after cars.

The best way to protect against uncertainty is to file BK and get a discharge. That way your current unsecured creditors will never be able to get at your assets, when you gain equity in your current assets or obtain new ones. But, it is possible that your creditors will sell the debt and the new owners will not file lawsuits at all or before the expiration of the statute of limitations. You could wait until you are actually sued to file BK. Maybe you will never have to file BK. But, keep in mind that even if the statute of limitations expires, you may still get sued and you will have to file a response to assert the statute of limitations defense to prevent the creditor from getting a judgment.

Your decision depends on your level of comfort with uncertainty and the possibility that you could hear from buyers of the debt years in the future. It also depends on the likelihood that your income or assets will increase in the future.