Myth # 3: If I Have No Assets, I Don’t Need To File For Bankruptcy

Debunking Bankruptcy
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This is the final installment of our three-part series debunking the most common myths surrounding bankruptcy. The third and final myth is perhaps the most dangerous of them all. It is the common mistake where people think that if they have no assets there is no reason to file for bankruptcy. Many people in fact are often content to simply let their bills pile up thinking that if they ignore them they will go away. This is a move fraught with consequences.

So what will happen if I don’t do anything, you may ask. What happens if I don’t pay my bills and I don’t file for bankruptcy? If I have no assets what’s the worst that can happen?

A lot can happen. For starters, if you are employed your wages may be garnished. This means that your creditors can actually have your employer deduct money straight from your paycheck - much the same way taxes are deducted - and paid directly to the creditor until the debt is paid off. This means that when you are already struggling under the weight of crippling bills, you will see even less money in your pocket at the end of each pay period.

Well, what if I’m not employed? What can the creditors do if I have no money to pay them? In the short term, perhaps not a whole lot. However, if a creditor - credit card companies in particular - takes you to court and obtains a judgment against you, they can seize future assets which you may acquire. This can come in many forms: future wages, the fifty-thousand dollar bank account your great aunt Gertrude left you in her will, the life insurance payout from your late spouse, insurance payouts from that car accident, theft and personal property damage, or even settlement awards from personal injury lawsuits.

The bottom line is that creditors have many means at their disposal for finding and taking your money, either now or in the future. Filing for bankruptcy protects your paycheck today while at the same time extinguishing most, if not all, of your liabilities, thus ensuring the safety of your future assets as well. 

Btzalel Hirschhorn is an attorney specializing in the areas of Bankruptcy Law, Debtors & Creditors Rights, & Real Estate. He may be contacted by email at This email address is being protected from spambots. You need JavaScript enabled to view it. or by phone at 516-418-7520.