I received a Summons and Complaint in the mail, should I file for Chapter 7 Bankruptcy?

So…you’re getting sued.  Well, we previously discussed on this blog what happens when you get sued by a Creditor in New York and the available defenses you have. But lets say the Creditor served you properly, and you recognize the debt and it is an amount you owe.  What now?  Two choices.  You can either settle the debt, or you can file for Chapter 7 or Chapter 13 Bankruptcy in New York.  If you settle the debt it could take you months, and your credit will still be in rough shape.  In addition, they can actually write off the debt and make you liable for a percentage of what you paid.  But putting that aside, the best thing to do is to be realistic.  You’re not getting sued by a Creditor because you have a ton of cash lying around and you just dont feel like paying; you’re getting sued because you can’t afford to pay.  If thats the case then why waste your money attempting to settle over a long period of time and paying thousands upon thousands of dollars when you have other credit card bills that you can’t afford to pay.

Here’s an example to illustrate:

You’re being sued for 10,000.  You decide to settle.  You, after weeks of negotiating, settle for $6,000.  You now have to make $600 monthly payments, further distressing the amount of money you have to use. Plus you now likely can’t afford to pay your other credit card bills.  And to top it off, if you miss even ONE payment, the Creditor can say “No Deal, whole thing is now due”.    And, by the way, you’re still in a ton of debt.


For about 1/3 of the price (approximation and depends on each individual case) you can file Chapter 7 Bankruptcy and get rid of all of your debt in 4-5 months and keep the $600 a month from going to your creditors in the above situation.

Again, YES, I am a Bankruptcy Lawyer in New York so obviously I prefer that you file for Bankruptcy.  But its not self interest.  It literally is because you save THOUSANDS, and don’t have to deal with the above nonsense.  It literally is the smart choice in almost ever single situation.  Contact us to find out more.