Subject: I'm disabled and can no longer pay my bills.
Question: QUESTION: I've been disabled for 7 years. Social Security Disability is my only income. I didn't think I'd be like this for so long. I thought I'd either be better by now or dead. I have good credit and never made minimum payments on my credit cards, expecting to be able to pay them off, but often finding myself putting more and more on these cards. I asked my creditors of help by lowing interest or monthly payments but none of them did anything for me. In fact, shortly after one of them increased my APR by 6.5%, and another increased my monthly payments. Bottom line is that next month, after I pay my living expences I will not be able to pay these other creditors. What do I do? Do I contact them and if so what do I say? I am full aware that they can not collect anything from me since my only form of income is Social Security Disability. I was told to just stop paying them and to let things take there couse, but that thought makes me nervous. Having to wait for them to call repeated then send me to collections, perhaps even sue. All that stress to get no where since it's more likely that my financial situation will be worse then it is now. The only info I've been able to find is what to do when collectors are coming after you. Nothing on what I should or can do at this point. What do I do from here?
ANSWER: I wouldn't worry about any of the above if you are on SSI. I would advise that you just sit back and wait until they sue you then go tell the judge that you are disabled and on SSI. They may get the judgment they seek but they can't collect on it.
---------- FOLLOW-UP ----------
QUESTION: I'm just wondering what to expect and do once I stop paying these creditors. How long would things take to progress if they due deside to sue me? Is the only way to get them to not call me repeatedly is to send the collection agency a written notice? Is there anything else I should know and expect.
ANSWER: You can expect that they will start calling you for a while trying to get you to pay. Then after about 150 to 180 days they will sell or assign the debt to a debt collector who will also ring your phone off the wall. You need to learn how to deal with those phone calls and my web page at http://www.creditwrench.com/18questions.html will teach you how to do that. You can also send them a limited cease & desist letter telling them to stop contacting you by phone. Then after a while they will probably attempt to sue you for the money.
---------- FOLLOW-UP ----------
QUESTION: I am just a few days into not paying my creditors. I have already received several calls, some automated and some live people. The live people are already rude and disrespectful. I requested the address to send the creditors a cease & desist letter and 2 people have hung up on me and I've also been given 2 different address to send that letter. From what I've heard that a cease and desist letter is only valid for use with collection agencies. That the original lender can call all they want. And that the FDCPA rules do not apply to these calls. Is this accurate? I also was wondering if I should notify these creditors that I can not pay them, due to lack of income and receiving disability, or should I deny that I owe the money? Most of the sample cease and desist letter I've seem state that I would be disputing the debt. I don't dispute that I owed the money, I just can no longer afford to pay because of extended time on disability and constant increase of my living expenses.
Answer: Above all, do not send cease & desist letters to either creditors or debt collectors. Sending Cease & Desist letters is a foolish idea taught by Mr. Bud Hibbs and other dangerous teachers on the Internet.
They are dangerous because they first of all rob you of the only chance you have to win against debt collectors and creditors alike and at the same time they leave debt collectors with little or no other choice but to file a lawsuit against you because you have left them no other way to communicate with you. So if you decide to follow such dangerous advice then you had better be well prepared to deal with your problems in court! Of course, if you sent cease & desist letters then you destroyed the only chance you had to gather evidence to use against them in court. Getting their phone calls and answering them to the greatest extent possible is the only way you will ever get to destroy them and keep from getting judgments and garnishments against you and maybe even losing valuable property to them. You know well in advance of your creditors when trouble strikes and the time has come when you will not be able to pay what you owe. When trouble strikes that is the time to get prepared by first of all buying yourself a good digital voice recorder with a USB port so you can download and save the conversations. Of course, since original creditors start calling and bugging you there isn't much you can do or say to them so if you can't pay then you might as well just ignore their calls if you can't pay up. During the time original creditors are all that are calling maybe your situation will improve to the point where you can get back on your feet but if that don't happen and they move to the next phase which is sending your account to 3rd party debt collectors then is the time to start gathering your evidence of their violating the law. So while you are still in the original creditor phase you have the opportunity to start learning about FDCPA, FCRA and other consumer protection laws. When the debt collectors start calling is when the time has arrived to start using my list of 18 questions
and gathering the evidence you will need in the court battles that are certain to be in your future. There is seemingly no end to the number of mistakes they will make. Let me give you a prime example. Many years ago I had a problem with Providian. They closed the account and sold it to a debt collector and the fight was on. It was sold to a succession of debt collectors over time and one day I got a summons to court. It was well beyond the statute of limitations for bringing suit in Oklahoma when the lawyer filed his suit against me. I filed my answer to the court and the lawyer immediately dismissed his case. I wanted to sue that lawyer but was told by other lawyers that I couldn't do that in Oklahoma so I let the matter drop foolishly thinking that they knew what they were talking about which of course they didn't. A couple of weeks ago I got a call from Peter T. Roach, a famous debt collection law firm wanting me to pay my Providian account. The caller started telling me items off my credit report and that was the first mistake they made. They have no permissible purpose for pulling my credit reports because they have not proven that I owe the debt which I do not because the debt is now more than 10 years old and is outlawed under Oklahoma law. They have the ability to pull my credit but they don't have a permissible purpose until they have verified who I am and whether or not they have the right person among other things. In the course of the call several other illegal acts were committed and of course duly recorded. Then they called again a few days later and as soon as they heard me start asking the 18 questions they just hung up. I still don't have a demand letter from them but when and if it comes I will demand validation and we will go from there. Of course, they will have to send it to an attorney here in Oklahoma to continue with collection efforts and that is when I will file a federal case against them. Then I will start in on the local attorney and get that law firm on it's way to federal court as well. I certainly hope that the local attorney will file a second lawsuit on me trying to collect the debt. But what would have been the result if I had sent cease & desist letters to them instead of doing things the right way? I would probably have lost my case in court the first time and would not be prepared to deal them a bruising blow this time either. I might even end up having to pay the debt twice. Ok, so you say they are already rude and disrespectful. What else would you expect out of a debt collector? They don't even have any real self respect because if they did they would go get a decent job in the first place. (LOL) You requested their address and they hung up on you. There is two violations right there. They have to give you a disclosure statement every time they call. Now you want to know if a c&d is only valid for use with collection agencies. Yes, original lenders can call all they want to under federal law but what about state law where you live? Maybe they can and maybe they can't. Should you deny that you owe the money? Of course not. You know that you do owe the money so why tell a lie when it isn't necessary? And the fact that you can no longer afford to pay for whatever reason isn't an excuse either, it is just a fact of your life and financial condition. Constantly increasing living expenses isn't an excuse either. In fact there is no excuse for not paying what you owe. But since you can't pay you had better start figuring out how to live with the results which you can't help either but don't make things worse for yourself by listening to dangerous teachers and doing foolish things. So who are among America's most dangerous teachers? All you have to do to find that information is to go to Google and put the phrase AMERICA'S MOST DANGEROUS TEACHERS in the search box and pick on the first link that pops up and you will know at least a few of those whom you should avoid at all costs. You should also be aware that if you are on SSI your checks cannot be garnished but there may be other things they can do to collect their money from you depending on state and federal law. Learn to defend yourself instead of how to ruin any chance you might have had.