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When Bankruptcy Is Not the Best Option

By Michelle A. Weinberg

Filing for bankruptcy protection is not always the best option for low-income debtor clients. Some do not need bankruptcy because they have no garnishable income or assets to protect. Others with substantial home equity may better protect their homes by defending collection actions or seeking a reverse mortgage. Taking care to avoid debt-management and debt-consolidation scams, clients with garnishable income may be better served by negotiating a payment plan outside bankruptcy court. Clients should explore charity care at hospitals and utility assistance programs. Attorneys should advise all clients of their rights under the Fair Debt Collection Practices Act and should clarify the effect of bankruptcy on employment prospects.

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