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Trying to avoid filing Bankruptcy, not that I could even afford the bankruptcy laywers...
I'm curious how others have handled this.. Any tips on working with places like credit card companies, utilities, and hospitals?
I was keeping up on my bills & credit cards while I was on severance (since I had Severance and UE) but now that I'm strictly on UE which barely covers rent and food, and still no job, I'm going to fall into a deeper hole with debt.
Add to that a trip to the Emergency Room last month, without insurance, and a new debt of $7,000 for my 2-hour stay in the ER......
In regards to the hospital bill, they gave me paperwork to take home, fill out, to receive charity aid on the hospital bill... But they want tax returns from the previous year (2011) which will show a full, normal income. Even 2012 will show a decent income because I worked for 1/3 of the year before layoff, plus severance, and (this hurts) I had $13,000 in a "401k Loan" which was being paid back, but once you leave the company, you have to pay the WHOLE thing back, or be taxed (Income tax) and pay penalty (10%) so once I see my tax guy, I'll have another HUGE debt to deal with (the IRS and the State of California)
(Thankfully, my student loans were placed on forbearance due to unemployment... I wish the banks & the IRS did the same)
So, any tips on how to handle all this debt? Anyone else in the same boat?
Yes I deal with debt, both my own and other peoples.
Unfortunately I live in another country where we (possibly) have more protections legally.
The only advice I can give you is to write to your creditors, explaining your problem, and offer them a regular payment of what you can afford.
Prioritise your debt - anything essential pay first, like power bills, pay anything that attracts interest second, and the rest can have what's left over.
Sounds like a lot of your debt is unsecured, meaning you won't lose a house over it. Unsecured debt is easy to deal with as your creditors have no leverage - they can't get blood out of a stone and they know it.
Good luck, stay calm, and don't let them bully you. But please start paying regularly even if its only a few dollars a week.
I was laid off for almost a year in 2009. As I recall my FL UI was about $1000 a month... It didn't pay all the bills. I prioritized things such as food and rent... Everything else went to the back burner.
I filed Ch 13. All my debt was unsecured other than my car which I left out of the bankruptcy. Included was all my credit debt that I was living on... My $700 IRS debt and the $2500 attorney fee. I continued to make my car payment as usual... My Ch 13 payment was $120 a month.
I paid off the Ch 13 a few months ago. I guess it was kind of a blessing in disguise because now I am debt free and rebuilding credit with a credit score of 660 that continues to rise... A great score considering I had a bankruptcy.
Try to remain positive... I know how stressful it can be. Good luck.
As far as utlities, I do not believe you can work with them because they will just shut you off. So your priorities are rent/food/utilities.
The ER visit, write them a letter, stating that you are currently on UI and you can't pay. My GF was in the ER and the same situation as you. They made her pay $100 when we left the ER then sent her a bill for the balance. She wrote them a letter stating how much she makes and that she couldn't pay. They sent her a bill for 50% of the original. She called them back and said she couldn't pay it and we haven't heard from them since and it's been about 8 months. I would put this debt close to the bottom, but do communicate with them.
The IRS has payment plans and are pretty good when you work with them. Get set up on a payment plan, I don't personally know if they will work on a payment amount with you or just tell you what you have to pay, but I do know that they will work with you.
If you have credit card debt, there are a few options. Call them, explain your situation and see if they can lower your interest rate - what they can do is lower the rate for the life of the balance, but I believe you won't be able to use the card anymore. There is a chance that they won't talk to you until you miss a few payments, so might need to do that. You can also try and talk the debt down. For this you will have to stop making payments and tell them you can't pay. They then might agree to take some amount from you immediately and forgive the rest of the debt. The only thing is that you might have to pay taxes on the forgiven amount - maybe someone can confirm that? If they refuse, it goes to collections. Once that happens, you can talk the collections company down to a lower amount also and it will knick your credit.
Either way, I think, your credit will suffer, so you might as well take the option where you end up owning the least amount of money. The credit card companies and the hospital have no leverage on you, so don't focus too much on them. I would focus on getting a job and saving some cash. Keep those credit lines open, you never know when you'll need it. Once you get a job, then either file bankruptcy or work it out with the creditors.
My only concern would be your line of work. I am in Finance/Accounting and I've heard that bad credit could prevent you from getting a job in Finance/Accounting for obvious reasons. So I keep my credit prestine. If your line of work doesn't necessarily involve credit checks, then I might just wait until I get a job and file bankrputcy.
Echoing what the others said about the IRS. It's much better if you reach out to them and make arrangements to pay something every month rather than avoid them. I owed them a ton of money after I got divorced and they were pretty friendly because I contacted them when they started sending the scary letters.
Trying to avoid filing Bankruptcy, not that I could even afford the bankruptcy laywers...
I'm curious how others have handled this.. Any tips on working with places like credit card companies, utilities, and hospitals?
I was keeping up on my bills & credit cards while I was on severance (since I had Severance and UE) but now that I'm strictly on UE which barely covers rent and food, and still no job, I'm going to fall into a deeper hole with debt.
Add to that a trip to the Emergency Room last month, without insurance, and a new debt of $7,000 for my 2-hour stay in the ER......
In regards to the hospital bill, they gave me paperwork to take home, fill out, to receive charity aid on the hospital bill... But they want tax returns from the previous year (2011) which will show a full, normal income. Even 2012 will show a decent income because I worked for 1/3 of the year before layoff, plus severance, and (this hurts) I had $13,000 in a "401k Loan" which was being paid back, but once you leave the company, you have to pay the WHOLE thing back, or be taxed (Income tax) and pay penalty (10%) so once I see my tax guy, I'll have another HUGE debt to deal with (the IRS and the State of California)
(Thankfully, my student loans were placed on forbearance due to unemployment... I wish the banks & the IRS did the same)
So, any tips on how to handle all this debt? Anyone else in the same boat?
According to your personal profile you live in Santa Monica, California. You are 15 miles away from the second largest city in the United States, and the 12th largest metropolitan area in the world and you're tell us that you can't find a job.
Trying to avoid filing Bankruptcy, not that I could even afford the bankruptcy laywers...
I'm curious how others have handled this.. Any tips on working with places like credit card companies, utilities, and hospitals?
I was keeping up on my bills & credit cards while I was on severance (since I had Severance and UE) but now that I'm strictly on UE which barely covers rent and food, and still no job, I'm going to fall into a deeper hole with debt.
Add to that a trip to the Emergency Room last month, without insurance, and a new debt of $7,000 for my 2-hour stay in the ER......
In regards to the hospital bill, they gave me paperwork to take home, fill out, to receive charity aid on the hospital bill... But they want tax returns from the previous year (2011) which will show a full, normal income. Even 2012 will show a decent income because I worked for 1/3 of the year before layoff, plus severance, and (this hurts) I had $13,000 in a "401k Loan" which was being paid back, but once you leave the company, you have to pay the WHOLE thing back, or be taxed (Income tax) and pay penalty (10%) so once I see my tax guy, I'll have another HUGE debt to deal with (the IRS and the State of California)
(Thankfully, my student loans were placed on forbearance due to unemployment... I wish the banks & the IRS did the same)
So, any tips on how to handle all this debt? Anyone else in the same boat?
The IRS designates your debt in taxes as noncollectable while you are unemployed, so does the State of Ca FTB.
It takes a little effort on your part though, they aren't going to do this by reading your mind. Walk into the IRS office and explain it to them. Same for FTB.
If anyone is telling you that the IRS and FTB aren't working with unemployed people, you are being misinformed. Now, if you have assets that are readily converted to cash, it might raise some concerns, (yo have lots of equity in a house or something like that).
Now you can move onto your other debts. The worst thing you can do is wait for someone to read your mind and offer to help, they can't.
The hospital bill? Talk to them. In a lot of cases they will adjust your bill. That means talking to someone and not waiting for collections. Everyone that helped you in the ER can offer some assistance but lets not forget that they all did help you and for that should get paid. Nevertheless, your bill can be reduced if you have a genuine hardship.
Lots of people are unemployed but many sit around whining and waiting. Don't be one of them, take action, present your hardship honestly and ask for the best they can offer. Many will.
For CC companies, call them. Don't speak to the first person answering the phone except to ask who the person you need to speak to is. If your CC is with a bank, say Citi, BofA or any other that has a local branch, go there. Don't go to the teller, talk to your banker. You have one, everyone does. Ask who that is and speak with them. Often, they will have suggestion on what else you can do and how best to approach other creditors. They are going to review your CC use history and if you are buying luxury items, don't expect not should you, any compassion. Luxuries are things you don't need to live or things that help you gain employment.
For the utility companies, same thing. Now one thing here, if you are using high speed internet access to watch netflix, download movies and music, play games and all that, please, be fair to them if you are asking for something. You can downgrade your internet service to the most basic. Cancel your TV service, TV is a luxury, not a right. Use broadcast high def.
You can get lifeline utilities and even highly discounted phone service in California.
Do you have a mobile phone? Do you really need it? If it is also your home phone, okay but you sure don't need a smartphone with a $50 data plan plus service for calling. Check your email at coffee shops ir where there is free wifi, it is all over the place, especially in CA.
Got an iPhone? Sell it. Get a basic phone and almost all the telecoms will let you downgrade to a basic package without penalty if you explain your hardship. iPad? Sell it too unless it is your only computer.
Going to movies, ordering delivery pizza and lattes should become memories.
The trick is to show the people that you're going to ask for help and assistance that you've done your part too and cut back as much as possible. Don't be afraid to list what you've done when talking to the bank, hospital and others. You are asking them for something and no one like to help those that want to continue life as if they are entitled to something when they are asking for a discount of money owed.
Sometimes if a creditor can't or is unwilling to reduce the amount owed, ask for a interest free period of 6 months or more so you can pay a reduce amount directly on principal. Make sure you explain you will pay something, could be a small amount but something.
Above all, keep the businesses and others you are asking for assistance up to date on your employment situation. You can ask them how often they'd like an update. That really helps.
Good luck to you.
One last thing, if things get to bad you can't keep above water and you get crushed with no way out, a BK is not the end of the world. It will take time to get out and recover but you will.
About the ER visit - if it was a CA hospital, you can go to the link below and search the hospital on the left side. Each CA hospital has to report their free and discount (charity) plan here, along with forms, where and what to submit, financial thresholds, amount of discount, etc, for uninsured and under-insured. Then, you'll at least know what they will be considering. Often charity care (they charge a small amount) qualifies at 250% or 350% of Federal Poverty Level, which seems like you may meet.
Best of luck!
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California hospitals free and charity care plans
