Seven Tips To Stop Debt - Experienced Chapter 7 And 13 Bankruptcy Lawyer In The State Of New York

July 9, 2012 - PRLog -- Seven tips to stop debt

NEW YORK, July 9, 2012 - http://www.kalikalaw.com - Today many Americans have to spend a significant portion of their income on making credit card payments.  Since the unemployment rate is high and the chance of finding a job is low, one cannot easily increase one’s disposable income in order to pay off one’s old debts.  In this economy, many people have to tighten their belts and change their spending habits.  Here are seven basic tips that will help you reduce or eliminate you old debts.

Respond to court papers

Do not miss or ignore papers you receive from court.  You should pay attention especially to any papers that have the words “summons” and “order” in them.  If you fail to appear in court, your creditors will obtain a default judgement against you.  This judgement will allow them to garnish your wages, place a lien on your property, etc.  

On the other hand, if you go to court, you will have an opportunity to present your case and negotiate a settlement agreement with the creditor under court supervision.  Consult with an attorney to see which steps you need to take.

Make sure the debt is yours

Most debtors do not realize that they have a right to ask a debt collector to verify the debt. You might be making payments on a debt that is not even yours. If the debt collector cannot come back with proof that this debt is indeed yours, you do not have to pay a penny.

Find out if you are “judgement proof”

Certain types of funds are exempt from debt collection.  If you receive this kind of exempt income and you do not expect your financial situation to improve in the future, your creditors will not be able to collect, even if they obtain a court judgement against you.  The types of funds that are exempt include any form of public assistance, i.e. Social Security, SSI, veteran’s benefits, unemployment insurance, worker’s compensation benefits, and some others.

If your rely on public assistance in the present but expect to go back to work in the future, you may want to negotiate a debt settlement with your creditors.

Negotiate a debt settlement

Many debtors want to negotiate some payment arrangements with debt collectors to avoid the stress of litigation.  If you do negotiate a settlement agreement, make sure it is in writing. Remember that you should never give your bank account number or Social Security Number to a debt collector. Make sure that under the terms of your settlement agreement the collection account will be deleted from your credit report upon full payment.

File for bankruptcy

Some debtors are capable of making only minimum monthly payments and, regardless of income, do not expect their financial situation to improve significantly in the future.  If you are one of these debtors and continue to make only minimum monthly payments, you will carry your debt around like a heavy burden and will never eliminate it.  Each month the burden of your debt will become heavier and will forever prevent you from doing what you really want in life.

Fortunately, you can choose whether to carry this debt into your future or to stop debt now.  One possible solution is bankruptcy.  Bankruptcy can help you eliminate most, if not all, of your consumer debts and start a new healthy chapter in your financial life.  You should consult with a bankruptcy attorney to find out whether Chapter 7 or Chapter 13 bankruptcy is right for you and how you can protect the most of your property.

Use debit cards and cash

It may sound like a cliche but the best way to stop debt is by not using credit cards for impulsive purchases you cannot afford.  Reduce your spending. Use debit cards and cash to make purchases you really need.  Use credit cards in emergency situations only.

Liquidate certain property

Unless you are planning to file for bankruptcy, you may want to sell some property to pay off your debts.  Fore example, you may trade a more expensive car for a less expensive one and use the proceeds from the sale to pay off some portion of your debt.  You may also think of some other assets you own that, if sold, may raise cash that will allow you to pay off all or some of your debts.  

If you have any saving accounts, it will not to be a bad idea to apply that money to pay off your debts.  Even if you decide to file for bankruptcy later, you will not be able to keep that cash anyway.  However, if you are indeed planning to file for bankruptcy, it is important to consult with an attorney before you make any payments to your creditors.


The Law Office of Yelena Kalika was established to assist clients in reducing and eliminating their debts. The firm’s practice primarily focuses on Chapter 7 and Chapter 13 bankruptcy and consumer debt issues in the State of New York as well as business law.

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About Ms. Kalika

Yelena Kalika represents and assists individuals in consumer Chapter 7 and Chapter 13 bankruptcy and consumer debt matters.
Areas of Practice

Ms. Kalika’s practice primarily focuses on Chapter 7 and Chapter 13 bankruptcy and consumer debt issues in the State of New York and grant writing.

She is admitted to practice in New York, New Jersey and in the Eastern, Southern and New Jersey Districts of the U.S. District Court.

If you'd like more information about this topic, or to schedule an interview with Yelena Kalika, please visit us at http://www.kalikalaw.com, or call us at (855) 357-3300