In a story that has captured the attention of many online, a person has shared how they navigated their way out of overwhelming debt without formally declaring bankruptcy. The individual’s post on Reddit’s Unethical Life Pro Tips garnered significant attention, receiving over 7,000 upvotes and sparking discussions around unorthodox financial strategies.
Years ago, the individual was inundated with credit card debt and facing relentless collection calls, with some accounts in default for several years. Rather than succumb to the pressure of their financial situation, they chose an unusual approach. They paid a bankruptcy attorney an initial fee of about $1,800 and informed their creditors that they were in the process of filing for bankruptcy with legal representation.
Following this assertion, the collection calls subsided dramatically. The creditors, believing that imminent bankruptcy was on the horizon, appeared to write off the debts without further action. Despite their claims, the individual never actually filed for bankruptcy. Over time, many of their debts aged past the statute of limitations, leading to cancellations. Five years later, they reported having a credit score over 800 and managing a mortgage along with multiple auto loans without the blemish of a bankruptcy record, which is noteworthy considering that bankruptcy does not permanently exclude individuals from obtaining credit.
Financial experts note that once legal representation is engaged in bankruptcy proceedings, creditors often halt aggressive collection practices, as pursuing debtors who might be on the brink of bankruptcy can be deemed unproductive. The individual confirmed in the comments that while they did retain a bankruptcy attorney, they failed to follow through with the subsequent necessary paperwork, which likely contributed to the creditors’ decision to back off.
However, skepticism regarding their method lingers. Some industry insiders express doubt, with one former Citibank collections employee noting that creditors typically verify the retention of attorneys. If such claims cannot be confirmed, the pressure from creditors may renew, potentially inviting deeper scrutiny for the debtor.
Despite the skepticism, others have reported similar experiences. One commenter recounted their own success story, stating that they merely informed collectors of their intent to declare bankruptcy without hiring legal assistance, reinforcing the idea that assertion alone can sometimes deter aggressive collection efforts.
While this individual’s experience might have yielded positive results, experts caution against relying on such tactics. Creditors can still initiate lawsuits if they believe a debtor is acting in bad faith. Misrepresenting bankruptcy intentions could also lead to legal repercussions. Furthermore, unpaid debts can linger on credit reports for years, potentially affecting future lending opportunities.
Ultimately, this individual managed to avoid tens of thousands of dollars in debt through a risky bluff that many would not recommend. As they noted, they “avoided tens of thousands in debt with no real repercussions,” but this approach is not without its pitfalls.
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