Too ill to pay credit card debt, could use advice (funds, debts)

[beetrout]

I have had a very lengthy, disabling illness. I aquired about $10,000 in credit card debt during college in part because I was truly too sick to think about much besides getting through college and sort of diverted my attention from the accumulating debt. I assumed I would recover and I would pay it, but my mom had also told me she would pay it. I graduated and am too sick to work, living with family, and my mom doesn't have the money to pay. My dad spends a lot on my medical bills and so eventually he decided that he couldn't also pay my credit card bills, and that I should stop making payments and let it be "written off" and go to collections.

Before this, I had good credit. And believe me if I could work I would want to be the kind of person that pays her debts.

I am very sick, but I'm not dying. I hope and want to have a life and a job and a house someday. But I've been sick for years already, and I don't know when this will end. I am nervous because I don't know how the credit card debt collection is going to go. My dad has assured me that this isn't enough for them to worry about and it will eventually go away when they give up. I have thought about bankruptcy and I would rather have it off my record in the 7 years it takes from a defaulted credit card, than in 10 years from bankruptcy. And I read bankruptcy never gets off your records.

The debt has already gone to a collections agency.

If I had a judgment against me, there would't be anything to take. I would rather not have a judgement hanging over my head though, anyway. It's possible that we could come up with a lump payment, but definity not more than 10 cents on the dollar.

If any of you have any advice to offer, I would very much appreciate it. I don't know if I should speak to the debt collectors (I haven't been). I'm also confused about the meaning of the statute of limitations on this debt.

[berdee]

Are you able to work or have you filed for SSDI?
When did you default? (either the first time you became 30 days late and never brough the account current before it was charged off, or, your last payment or charge before the account was charged off)
Statute of limitations (SOL) is state specific, what state are you in?
Have you made any payments after defaulting? If so, did you pay the original creditor or the collector and when was the last payment? (some states allow the SOL to be reset if a payment is made, others don't)

Bankruptcy is an individual decision, but in my opinion filing for only $10k worth of debt really isn't worth it.

I doubt a collector would take only 10 cents on the dollar if the debt is fairly new. A junk debt collector may, but chances would be good if it was old enough to be in the hands of a JDB, it would be out of SOL anyway.

You should never speak to collectors, all correspondence should be done by mail.

[Bosco55David]

Originally Posted by berdee

Are you able to work or have you filed for SSDI?
When did you default? (either the first time you became 30 days late and never brough the account current before it was charged off, or, your last payment or charge before the account was charged off)
Statute of limitations (SOL) is state specific, what state are you in?
Have you made any payments after defaulting? If so, did you pay the original creditor or the collector and when was the last payment? (some states allow the SOL to be reset if a payment is made, others don't)

Bankruptcy is an individual decision, but in my opinion filing for only $10k worth of debt really isn't worth it.

I doubt a collector would take only 10 cents on the dollar if the debt is fairly new. A junk debt collector may, but chances would be good if it was old enough to be in the hands of a JDB, it would be out of SOL anyway.

You should never speak to collectors, all correspondence should be done by mail.

Excellent post.

[beetrout]

I have filed for both SSI and SSDI now, but just as of a few weeks ago. My last credit card payment was in November. I haven't made any payments to anyone since then. The credit card company told me they had given the debt to a collections agency a few weeks ago.

I am in Texas. I read that the SOL is 4 years. I am unclear exactly what the SOL means for me.

I have not spoken to collectors in many months. I just leave the ringer on my phone off and don't answer numbers I don't recognize. I don't know if this is the best plan. I would of course rather not receive any of their phone calls at all, but I read in another post somewhere that sending a cease and desist letter for phone calls to the collections agency, or a letter that states that you can't pay is a mistake. That post said that they will use these letters against you in court. Should I be communicating with the collections agency in some way?

Is the collection agency going to give up on collecting my debt or are they going to take me to court?

Thank you for the great post. Much appreciated.

[debtmonger]

If they take you to court, what are they going to get. Unless you have some cash hidden in some bank, you are judgment proof. I simply would not claim BK for 10K. Your parents are not liable for your debt and should not pay it.

You need to stop worrying about this cc debt and worry only about getting healthier. Once your health has improved you can clean this mess up. At that time they may accept a lump sum payment of 10-20 cents on the dollar. Don't allow them to abuse you and good luck with your health.

[berdee]

Originally Posted by debtmonger

If they take you to court, what are they going to get. Unless you have some cash hidden in some bank, you are judgment proof. I simply would not claim BK for 10K. Your parents are not liable for your debt and should not pay it.

You need to stop worrying about this cc debt and worry only about getting healthier. Once your health has improved you can clean this mess up. At that time they may accept a lump sum payment of 10-20 cents on the dollar. Don't allow them to abuse you and good luck with your health.

There is no telling what a collector will do, no matter if you ignore them or if you don't. There is always the possiblity that they will sue.

If you send a cease & desist, you would be stopping them from trying to collect. If that happens they may return it to the original creditor, but chances are better that they would file suit instead.

You shouldn't send a "I can't pay" type of letter either. If they receive that it may push them into filing suit, plus, by your stating that you would basically be acknowledging the debt, which can be used against you.
Texas does allow the collection SOL to be reset IF you send a written and signed (by you) acknowledgment of the debt. Also, if you ever make a payment by check, that is signed by you, than that could be considered a written acknowledgment.
Texas Statute for re-aging debts - § 16.065.

Texas SOL statutes is 4 years. It begins to run on the last payment or charge on the account before the account is charged off.
Texas SOL statute - § 16.004.

Texas is the "only" state, as far as I know, where you can request validation "at any time" and not just within the first 30 days from the first contact from the collector.
But, if the charge off was recent, which it sounds like, requesting validation without being able to pay at this time could be a double edged sword. With the charge off being fairly recent, chances are great that they will be able to provide the information.

You need to do your homework and read "as much as you possibly can" before you decide to do anything.
You also need to order hard copies your credit reports from each CRA and look them over.

If you had just filed for SSDI, it could take a couple years before approval, if you are approved.
If you are approved then they will back pay you to the date you filed for SSDI. At that point, you may be able to offer a settlement to the collector, and for quite a bit less then the amount due, since it would be much older.

If they do end up filing suit, and win, they cannot garnish wages in Texas and they cannot seize your SSDI, no matter what state you live in. If you do receive SSI or SSDI, you really need to file a paper with the bank that you deposit those funds with saying that those funds come from SSDI/SSI and are exempt. Be sure you "never" deposit money from any other source into that account!! If you do, you will have problems with them seizing the money in that account.

If they do sue, you "need" to answer the summons and show up in court. By doing that you can further protect your funds since you will be able to inform the court of exactly where your funds come from.

What you need to do now is research and read. (just recently out of college, you should still be in learn mode)
Learn your rights under Texas laws and under federal laws. If the collector violates any of those laws then you would have ammo against them should they sue.

Start with buying yourself a cheap recorder so you can record any calls you receive from the collector. If they violate in any call, transfer the tape to disk and "keep it safe". You do not have to tell them you are taping, by not telling them they will probably be more willing to violate your rights.
Texas info about taping: "Can We Tape?"

To learn what is or isn't a violation, you need to read the federal and Texas laws.

Start with the FTC's FDCPA (also browse through the FDCPA Staff Opinion letters, that are linked on that page, as they can be very helpful)
FTC Office of the Secretary - Fair Credit Reporting Act Links

Texas law links:
LINKS TO TEXAS CONSUMER PROTECTION STATUTES (http://www.peopleslawyer.net/consumerprotection.html - broken link)

The above link is packed with extremely informative links to Texas statutes.
Be sure not only read through all of the consumer protection links listed in there, but to also read the Texas FCRA.

Legal Issues

Texas also requires that collectors MUST be bonded to collect in Texas. (§ 392.101.) You can find if that collector is bonded through the following link, or the phone number to call if you cannot find that particular collector. You can also find info on what to do should that collector not be bonded. The SOS is extremely harsh on a collector who is not bonded but tries to collect, if a complaint is filed
Debt Collector Search

The main page for the SOS:
Texas Secretary of State

A Texas FYI site: Frequently Asked Questions


To learn if what they are reporting is a violation, read the FTC's FCRA
http://www.ftc.gov/os/statutes/031224fcra.pdf

(eta: Google the FTC FCRA Staff Opinion Letters and read those also, they are very helpful in explaining the FCRA)

The Texas Finance Code (TFC), Texas Business and Commerce Code, Chapter 17, Subsection E for Deceptive Trade Practices, Texas FCRA, etc. are some of the strongest laws in the country for consumer protection, even surpassing the FTC's versions.

Using them, along with the FTC version, can go very far in protecting your rights.


If you have any questions or need clarification on something, please continue to post and ask.


I hope I covered most of what may be needed
If anyone else can think of anything to add ... please add it.

Thanks Bosco


whew

[texdav]

lok for free legal aid;and file bnakrupsy from waht you are saying.Hope you get well.

[las vegas drunk]

You might want to look into running a business from home. A friend of mine has chronic fatigue syndrome so I understand what your going through.

[Lina Milano]

I have to say that your problem seems really bad but you do have to think about your health first and foremost. What good would a clean credit history be if you sacrifice your health. However, if you need special medical credit cards for example or a card to help you in your credit situation, a good place i've tried is creditnet.com.