bankruptcy exempt property
Can I threaten to file for bankruptcy when negotiating with creditors?
It’s an empty threat though because I’m not going to file really.
I’m trying to negotiate a $1,300 debt for $900 – $1000. I want to threaten bankruptcy as leverage but is this a good decision? This would be my line: “I am familiar with the law and know that I am ‘judgement proof’. If I file for bankruptcy I will claim all property as exempt, and if you sue and obtain a judgement you could not collect any of my property to satisfy the judgement.”
Will this help? Can it hurt? Any other tips? Is there anything else I can use as leverage?
Here’s some background info: I’m not dealing with collection agencies so it hasn’t gotten too out of hand. I have about $30K in debt ($20K student loans, $10K credit cards). I’m working at part time jobs right now but when I do find work I’ll be making $35-$40K a year entry level in my field.
Thanks!
Here is a blurb from one of my favorite sources.
“Should I use the threat of bankruptcy?
Use the threat of bankruptcy. It will be in your best interest if the creditor believes that you have very little money and you are teetering on the edge of bankruptcy. You should approach each creditor as though this is their last chance to compromise, and get something out of your debt, before you declare bankruptcy and they get nothing. Be careful when doing this, however. If you accumulate any more debt after stating this to a creditor, (and they record all of your correspondence and phone calls), you may not be able to discharge this debt within bankruptcy.”
http://www.creditinfocenter.com/debt/settle_debts.shtml
