Deep in Debt and No Way to Pay

I'm disabled and my husband is retired. We have very low income. Our credit card debt is about 100,000.00. We stopped paying creditors. So far they call all day and ask for money. How long they will be call? What happens after few months if they not received payment? What will be the next step what they can do to us? Our house, no market, is worth less what we own to the mortgage company. Please give answers.

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Thank You,
Danuta

March 13, 20080 found this helpful

It really depends on the credit card company. They can get really nasty. It also depends on what state you live in. In some states they cannot go after your home (ie put a lien on your house)Look up homestead exception for your state. After the phone calls cease, they will most likely turn it over to an "attorney" - I use the term loosely because most of these law firms are no more than collection agencies. However, if you are low income and on Social Security, as your only income, they cannot take your disability money or attach your bank account if that is your only income. This is a federal law. This has been my experience. You can find out alot of information regarding your states debt laws on the Internet. Familiarize yourself with as much info as you can find. I have been told that many companies will drop the amount due if you have only Social Secuity income and no assests. Become informed and not scared - that is what they prey on - they try to scare you and your best defense is to arm yourself with knowledge.

You are in way more debt than I was when I became disabled. So do not take this as what will be in your case- I am only letting you know what I found out -- The hard way! I tried to seek legal help, but was told it would cost more to fight it than I owed. That may not be the case for you. If you have a legal aid available to you that might be your best bet.

Good Luck!

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March 13, 20080 found this helpful

My son is just now coming out of this. Here is what they did. Went to a Social Services program for credit counseling. The phone calls stopped immediately. They looked for and found an investor and did a "short sale" on their home. Personally, I would file bankruptcy if I were you. Good luck - it is a nightmare. Oh, and I guess the best advice of all that I can give you is to stay in prayer.

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March 13, 20080 found this helpful

When we got that far into debt we used one of those credit card scams that promised to help you pay off your credit cards. DO NOT USE THEM! I cannot stress this enough.

We used one of them and got so far into debt and had so many people calling us and collection agencies calling we got caller ID and I finally didn't answer the phone. The more you argue with them the more they try to scare you. We filed bankruptcy eventually. That was 3 years ago. I WILL NEVER HAVE ANOTHER CREDIT CARD AGAIN! If we can't afford it by just paying for it we don't need it. Put your faith in god and pray about it and he will guide you to do the best thing.

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March 13, 20080 found this helpful

Sounds like your best bet would be to contact a bankruptcy attorney. The creditors will not stop calling and it will wear on you emotionally. No need to lose what you do have currently. The sooner the better you don't want them to attach to any assets you have.

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March 13, 20080 found this helpful

When you are in situations like this, the best thing to do is to face it. They will continue to call and bother you. Call each credit card company and explain that you are disabled and your husband is retired and can only pay them $5 a month. It shows your earnestness to pay your debts and ask them if they will stop charging interest and late charges. They are probably charging you exorbitant interest rates. This is what makes your bills continue to go up. Many will try to work something out rather than get nothing for the debt. Cut up all credit cards and do not charge anything more. It is a tough situation but there are many who have gotten in over their heads in today's economy.

The advise about seeking information about bankruptcy is good. If your house is worth less than you owe on it, you will need to decide if you want to keep that or not. If there is no equity, they can't get anything from it.

Also, if there is any of the debt due to medical bills or travel for medical reasons, make sure to mention that. I've known people who have had their debts forgiven. Just make sure you have a simple script of your situation so you don't get rattled when calling them and just give them the facts. They can't get money out of people who have none.

I wish you the best and hope you see better times.

Susan from ThriftyFun

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March 13, 20080 found this helpful

HERE'S THE SOLUTION: If you go to one of those Non-Profit Debt Consolidators (there are plenty) they will contact the credit card companies for you & get them to cancel all or most of the interest you owe them. (This lowers your payments by quite a bit!) Usually they'll even reduce your balance more.

These credit counseling companies will then consolidate all your credit cards & all the money you owe into one payment (per month). The amount of this payment will depend on how much money you have coming in. The credit card companies work with you & them because they don't want you to go bankrupt & not pay at all. They'd rather lower the amount you owe & knock off the interest just to get you to pay them something.

As soon as you make an appointment with them, just tell the debtors when they call you, that you have an appointment with "such & such credit counselors" & they'll stop harassing you. Tell them "From now on contact THEM", not me (as these guys are working FOR you). I know all this because it happened to me.

* (these non-profit credit counseling companies make their money from the credit card companies, but they' might ASK you for a donation which you don't have to give).

* You can also find a local company, so you won't have to deal with this over the internet. Also, some of the non-profit credit counseling agencies have local branches in many towns. I, myself prefer to just bring all my paperwork to an office in my area. Some prefer to make copies & do it through the mail. (or by fax machine)

---> To find one of these non-profit credit helper agencies just Google "Credit Help" & you'll have quite a few to choose from.

HERE'S SEVERAL:

Consumer Credit Services www.ConsumerCredit.com

Credit Counseling - CCCS www.MoneyManagement.org

Non-Profit CCCS Agency www.CCCSstl.org

PS. My son lost his job & owed over $5000 on one credit card, he called the bank & told them he couldn't pay. They lowered it to HALF for him (because they didn't want him to go bankrupt & not pay). They even offered to drop it to less if he could pay the balance within 2 months! But, the easiest way is to let one of the Non-Profit credit companies do the work FOR YOU, instead of calling the credit card companies yourself. It's their job & they know what they're doing! And, mark my word, once you make an appointment with these guys, no more harassing phone calls!

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March 14, 20080 found this helpful

You need to call Dave Ramsey, or go to his website www.daveramsey.com. He will give you advice on what to do, just listen to his radio show and you will hear people in the same shape as you, he offers great advice.

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March 14, 20080 found this helpful

You've gotten a lot of good advice here. I'd just like to add a few things. Don't go to any for-profit debt consolidation companies, the kind that advertise on TV. You don't have to pay that fee, you can call your creditors yourself. They'd rather have something than nothing so they are usually cooperative. If you miss a payment they will usually be patient. The for-profits usually aren't. They often seize your assets as soon as you miss the first payment(I heard a financial expert give this advice on TV). Also, collection agencies use all kinds of dirty tricks. Agencies in Philadelphia(I live in Virginia, they got my number by calling the library and asking them for the name of the nearest neighbor in the City Directory)called me day and night, telling me to go next door and tell the neighbors to pay their bills. Local agencies kept coming to my house and asking me why the people across the street don't pay their bills. I don't think any of these really expected me to help them, and of course I didn't -- embarrassing creditors is just a pressure tactic. But they also tell everybody your personal information, another pressure tactic. All of this is illegal but they do it anyway. As soon as you come to some kind of arrangement with your creditors they will stop. Good luck and God Bless.

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March 14, 20080 found this helpful

daveramsey.com -- go to his seminar, usual hosted at a local church - it will change your life and give you hope!

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March 14, 20080 found this helpful

My sister is in the almost same situation. She contacted a lawyer to ask what to do and if she should file bankruptcy. He told her no on the bankruptcy because the credit cards are an unsecured debt. She was told that the next time they called to tell them her situation and that she would not be able to pay.

He said they could not sue her because the debt is not secured. That means she did not have to put up collateral for the money she charged.

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March 14, 20080 found this helpful

Did you really say $100,000. How is that possible! I think there are a lot of questions here that need to be answered before you claim bankruptcy. That is doing a lot of other people who may be low income too, out of their livelihoods. Pray yes, but for responsible answers. please.

Editor's Note: The poster put 100.000.00 so we put it in as 100,000. It may be that it was 10,000 or even 100 but in any case it is more than they can pay.

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March 14, 20080 found this helpful

My husband, as a banker, used to advise people filing for bankruptcy and more often than not the attorneys fees ended up being more than what they owed, and then they still ended up with a bankruptcy on their records. The attorneys will not waive their fee, believe me.

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March 14, 20080 found this helpful

Hi, First I'm so sorry for the situation you are in. don't lose hope. We all have made bad choices at times. I totally agree with the folks who have recommended Dave Ramsey (daveramsey.com) They will have ELP (endorsed local providers) on the site so you can find someone in your area. They will have debt counselors for you to talk to. Some friends of ours with much more debt than you mentioned have done this and it has really helped them. Dave Ramsey uses only biblical principles and you can't go wrong with that. God bless you!

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I've been in exactly the same situation. I found an inexpensive attorney that charged me $250 to file bankruptcy and I did it. I had no trouble having had a bankruptcy and sure didn't miss the hounding creditor calls. One of which, when it was explained that I was bedridden, suggested I have a garage sale. Another told me he'd never have let himself get in my position. Right! You never know what's going to happen. I had more stress from creditors than I had over my disability. Get the bankruptcy - you won't lose your house, I'm still living in mine, still making mortgage payments. Believe me, for some peace of mind, bankruptcy is the way to go.

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March 14, 20080 found this helpful

Do not file bankruptcy - go to daveramsey.com. You will learn things that will change your life forever. It happened to me!

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March 15, 20080 found this helpful

Danuta, I am sorry you are in such trouble. Which country do you live in? It makes a difference to the advice that people give.

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March 15, 20080 found this helpful

You should also check out Debtor's Anonymous - they have lots of info & get Gerrold Mundis' book - How to Get out of Debt and Stay out of Debt - for all sorts of useful tips on how to deal with creditors.

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March 15, 20080 found this helpful

Sorry you are in that situation. Very difficult. You can write them a letter telling them to stop calling. Examples of the letter are on websites. I am not sure about telling them not to send letters. Have you thought about a reverse mortgage. Good luck.

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March 15, 20080 found this helpful

Living within your means is just good common sense. Cut up those cards and find new ways to pay your bills! I think your hubby needs to come out of retirement, even part time work will help pay monthly bills. Are you disabled to the point where you can't also do something part-time to bring even $100 a week in? There is always something out there. It may not help your present debt but it will keep you from racking up more debt. Good luck!

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March 16, 20080 found this helpful

Locate your local Consumer Credit Counseling agency. If an organization asks you to pay money, forget them. CCCs are non profit and are free. They will call your creditors and work with you and your creditors. CCC will ask that your creditors not call you anymore if you are on a plan. Google "non profit consumer credit counseling service" and your location for the right company. I can't stress enough that you do this immediately.

Consult with your local Legal Aid (free) to see if you can declare bankruptcy. Also do this immediately (call them Monday!)

You are disabled: are you eligible for vocational rehab services? These are free (google vocational rehab and your location)

Also google "independent living resource center" and your location. ILRC's will guide you wrt how much money you can make over and above your disability. They can also tell you what free programs and services you are eligible for.

Hubby should probably consider getting a small part-time job, doing something he enjoys. Seeing his family spiral further into debt can't be helping his psyche. Retirement doesn't mean you don't ever work again, it means you are retired from your career. If he is receiving Social Security retirement, go to http://www.ssa.gov and learn what the guidelines are for working while receiving social security.

See if you are eligible for your local food bank.

Check around and see if there are cheaper internet services you can subscribe to.

Buy the the book, "America's Cheapest Family." It's less than $20 and is a worthy investment.

http://www.homeeconomiser.com/

Never buy retail: shop at thrift stores and yard sales.

Think of ways you can make things last even longer. Use a little less laundry soap, less toothpaste, less shampoo. Eliminate the unnecessary expenses for now.

But first and foremost, THIS WEEK, set up an appointment with CCC and Legal Aid and get the big balls rolling.

Good luck.

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March 16, 20080 found this helpful

Dave Ramsey.com and his books IMMEDIATELY

This will NOT go away by itself. you need to take action to protect yourself.

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March 17, 20080 found this helpful

I sure understand how you feel. I too am disabled. However, I realized that I had to get a job so I went to work part time. Just about everyone can work if its only part time work. I suggest trying first with the US government for employment. They will train you to do what is needed and provide help. It is the law that employers must help the disabled.

Also, your husband will need to seek employment. You don't have enough money for him to be "retired." Retirement is a luxury few can afford. It is not a right.

I see other recommendations for a resource for help, but I like Suze Orman. She is on the tv and has written books that you can get at the library, if needed.

Now that I've told you the hard truths, I must tell you that you can get out of debt. I am now debt free. I will be paying off my mortgage before the end of the month. I pay for all my own medications and health insurance except for those I can get free from pharmaceutical companies because of my low income. I do not qualify for SSA because I am a former federal employee so I have no help with my health care and am not of age for SS. If I can do it, you can too. Its hard, but it can be done. Best of luck always,

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March 17, 20080 found this helpful

I'm glad people are giving you good advice, but I do wonder who ends up paying for all this debt.

It would be very hard for me to declare bankruptcy--it kinda seems like stealing from someone.

You two accumulated this debt and it should be your responsibility to pay it.

I do agree that credit card companies are getting a LOT of profit from their interest rates, and I don't understand how these extremely high interest rates can be legal.

I suppose I will get hate mail from this feedback, which is why I signed it anonymous. Whatever.

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March 26, 20080 found this helpful

I have been working with my niece on getting out of a horrible credit card debt mess for three years which she is only now starting to come out of. The harrassment is ENDLESS and will not go away. I highly recommend Dave Ramsey - go to his website, listen to his radio program, see if your area offers his Financial Peace University classes - 12 or 16 week class of good, caring people helping you create a plan to live on what you make and work on debt, who are not making money off you. He has a couple of books out which help you budget, tell you what to prioritize, etc. If you can't afford the books (about $20) then borrow them from the library - or your church may have copies if it has a small library or book room. Dave is very inspirational, motivational and cuts to the chase on what is doable, what isn't. You need income to survive and to pay off debt. You are going to both have to find some way to do that.

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March 26, 20080 found this helpful

Hi, as far as what the credit card companies can do to you -

Harrass you endlessly, they will only stop when they turn you over to collections companies who are even worse. They do not ever quit. They can garnish any income except social security.

Take you to court to get a judgment against your income, property liens, take your car, etc.Depending on the state you live in they can force the sale of your house (unless you declare bankruptcy).

You did create this debt, you have a moral obligation to do everything you can possibly do to pay it back. If you can demonstrate total lack of ability to pay it back, some may negotiate your debt down - but get it in writing first and never give them a personal check (they will empty your checking account in a flash and that is a promise).

Bad things can happen to good people that create impossible situations. It is a scary and frightening thing to go through and can be very hard on a marriage. I watched the fear my niece had to live with for so long - it takes a toll. I highly recommend the support you can get in a Dave Ramsey FPU course, and if you aren't already - get the support of a good church.

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June 13, 20080 found this helpful

Hi there,

Yes 100,000 is alot of debt I agree, but this is what I know. You are Judgement Proof because of your disablity they cant not collect from you, because of that. What you do need to do is send a Exception Letter to all collectors, and get a Certification back ;that, stated they signed and received it. You want to type up a letter of Exception for those peeps. As for your husbands income being low income ----how low? For that check on line for the Debt Exception/Judgement Proof info and find out the income limit. I want to say it is something like $420 a week gross per week, but check it out.

Good Luck,

Regina

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