Credit Card Suing for Non-Payment - Brother on Disbility

[Anonymous]

brother has a series of mental health issues and is unable to work. he lives in a small condo bought with money inherited from our parents, and receives SSI and Food Stamps. Owns an older car in pretty bad shape but works okay.

before going on disability, he had been working sporadically and thus had ok credit and such, and managed to amass about $8k in credit card debt. recently, he was served by the sheriff that the credit card company is suing him for the $8k in debt. it was spent frivolously, as a means to cope with his mental health issues.

how will this play out most likely? from what i read, they probably can't take the car or house, though a judge may put a lien on his property? can they force the sale of his condo to pay the debt? can he declare bankruptcy (but we are really confused as to how to pay a bankruptcy lawyer when you have no money to begin with....??)

he lives in maine, so i know that defines some of the excepted assets that can be protected in bankruptcy, I think his condo just exceeds that exception, by like $10k -- maybe. after realtor fees it would be wiped out.

if this gets really ugly, he may attempt suicide again, which is another worry.

[Anonymous]

Anonymous wrote:brother has a series of mental health issues and is unable to work. he lives in a small condo bought with money inherited from our parents, and receives SSI and Food Stamps. Owns an older car in pretty bad shape but works okay.

before going on disability, he had been working sporadically and thus had ok credit and such, and managed to amass about $8k in credit card debt. recently, he was served by the sheriff that the credit card company is suing him for the $8k in debt. it was spent frivolously, as a means to cope with his mental health issues.

how will this play out most likely? from what i read, they probably can't take the car or house, though a judge may put a lien on his property? can they force the sale of his condo to pay the debt? can he declare bankruptcy (but we are really confused as to how to pay a bankruptcy lawyer when you have no money to begin with....??)

he lives in maine, so i know that defines some of the excepted assets that can be protected in bankruptcy, I think his condo just exceeds that exception, by like $10k -- maybe. after realtor fees it would be wiped out.

if this gets really ugly, he may attempt suicide again, which is another worry.

The only reason a credit card company sues you - is because you don't answer their calls.

Most of the time, if you work with the credit card company - you can end up settling the debt for pennies on the dollar. It doesn't look great on your credit - but that shouldn't matter - if the credit card company is coming after you, your credit is probably shot already. Tell him to call the credit card company - explain his situation - and let them know that he is open to a settlement - which usually comes out to 10% of the debt and closure of the account.

[Anonymous]

Anonymous wrote:

Anonymous wrote:brother has a series of mental health issues and is unable to work. he lives in a small condo bought with money inherited from our parents, and receives SSI and Food Stamps. Owns an older car in pretty bad shape but works okay.

before going on disability, he had been working sporadically and thus had ok credit and such, and managed to amass about $8k in credit card debt. recently, he was served by the sheriff that the credit card company is suing him for the $8k in debt. it was spent frivolously, as a means to cope with his mental health issues.

how will this play out most likely? from what i read, they probably can't take the car or house, though a judge may put a lien on his property? can they force the sale of his condo to pay the debt? can he declare bankruptcy (but we are really confused as to how to pay a bankruptcy lawyer when you have no money to begin with....??)

he lives in maine, so i know that defines some of the excepted assets that can be protected in bankruptcy, I think his condo just exceeds that exception, by like $10k -- maybe. after realtor fees it would be wiped out.

if this gets really ugly, he may attempt suicide again, which is another worry.

The only reason a credit card company sues you - is because you don't answer their calls.

Most of the time, if you work with the credit card company - you can end up settling the debt for pennies on the dollar. It doesn't look great on your credit - but that shouldn't matter - if the credit card company is coming after you, your credit is probably shot already. Tell him to call the credit card company - explain his situation - and let them know that he is open to a settlement - which usually comes out to 10% of the debt and closure of the account.

PP - just wanted to add - a credit card company says a lot of things to try and intimidate you into paying - they will go to court and get a judgement which shows up on your credit - but they don't have the ability to do much more than that - that is why it's called unsecured debt - it's debt that the company giving it doesn't have any security (secure debt is like a car loan - they can come take the car to make up some of the debt).

[Anonymous]

I seriously doubt a sheriff came to real him a credit card company is suing him. Thats not what sheriff's do. That is what collection agencies do to scare people into paying. Calm down and find out from your brother how old the debt is. It will fall off the credit report in seven years so if it's old, just let it fall off and tell them to stop calling. If it's recent make an offer to settle it. Get the offer in writing before handing over any payment. Under no circumstances should you give them a bad know account number. Send a money order and write payment in full on it. I used to work for a bank and property who gave collection agencies their account number always regretted it because the companies would take money willy nilly and cause all sorts of headaches.

[Anonymous]

Ugh sorry for the typos above. Hope you can understand what I meant.

[Anonymous]

Anonymous wrote:I seriously doubt a sheriff came to real him a credit card company is suing him. Thats not what sheriff's do. That is what collection agencies do to scare people into paying. Calm down and find out from your brother how old the debt is. It will fall off the credit report in seven years so if it's old, just let it fall off and tell them to stop calling. If it's recent make an offer to settle it. Get the offer in writing before handing over any payment. Under no circumstances should you give them a bad know account number. Send a money order and write payment in full on it. I used to work for a bank and property who gave collection agencies their account number always regretted it because the companies would take money willy nilly and cause all sorts of headaches.

That is exactly who serves judgements and other court notices. Not all notices are served by private processors.

OP, ask to see what was served and make sure it is an actual lawsuit and not the judgement because he was severed previously and failed to appear.

If you have an EAP, contact them as many have free legal resources for you. Your brother is impoveroshed and may need to file for bankruptcy.

[Anonymous]

Your brother should contact the legal aid organization in his jurisdiction. Even if he can't avoid the judgment, since he collects SSI, his income isn't garnishable. With respect to the condo, car and any other assets, state law may offer protections from his creditors. And if there are none, they may be able to help him file for bankruptcy.

[Anonymous]

Anonymous wrote:
how will this play out most likely? from what i read, they probably can't take the car or house, though a judge may put a lien on his property? can they force the sale of his condo to pay the debt? can he declare bankruptcy (but we are really confused as to how to pay a bankruptcy lawyer when you have no money to begin with....??)

I am in the middle of filing my own bankruptcy because unable to pay a lawyer. Actually, a lawyer advised me to file myself because if you have nothing, it makes little sense to pay $1500+ for the straightforward process that goes fine without professional help if you follow all the instructions. I am using the guide"How to file chapter 7 bankruptcy" by NOLO. In a simple chapter 7 case, you fill out about 50 pages of questions about assets/liabilities, organize the documents in exactly the way the local court asks, file, come in for one meeting and then they dismiss the debt. You do have to follow all the directions exactly, because the court may reject the case if you staple the documents vs paper clip. But other than that, the questions are simple.

DC courts offer times twice a month to answer questions for people who are self-filing. Maine may have a similar service. Also, if you self-file then you can ask the court to waive the $300 filing fee.

The kinds of things you need to know to fill out the documents yourself:
-inventory of all his possessions and how much they are worth at current retail, so likely at thrift store prices. Professional appraisals for antiques, jewelry, etc.
-to whom he owes and how much
-how much he spends monthly on food/housing/etc, etc
-all sources of income.

There's nothing complicated about the forms. So if you or a relative have the time to DIY this, then it is a realistic option.

[Anonymous]

no need to file bankruptcy if you're judgment proof. And if he's on SSI and has no other income, he's judgment proof. He can't pay. No court will enforce an order, and SSA won't allow the money to come out of his benefits.

If he gets the money direct deposited, he might want to switch to direct express card so it's harder for them to take it if they did try (which they shouldn't).

Lots of good advice here--Pine Tree Legal is good in Maine. They may have a sample letter to send to the creditors explaining he's collection-proof.

http://ptla.org/debt-collection-maine-courts#

Also, do you have financial power of attorney over your brother now? Might be good to get that to ward off this stuff happening in the future.

[Anonymous]

Anonymous wrote:brother has a series of mental health issues and is unable to work. he lives in a small condo bought with money inherited from our parents, and receives SSI and Food Stamps. Owns an older car in pretty bad shape but works okay.

before going on disability, he had been working sporadically and thus had ok credit and such, and managed to amass about $8k in credit card debt. recently, he was served by the sheriff that the credit card company is suing him for the $8k in debt. it was spent frivolously, as a means to cope with his mental health issues.

how will this play out most likely? from what i read, they probably can't take the car or house, though a judge may put a lien on his property? can they force the sale of his condo to pay the debt? can he declare bankruptcy (but we are really confused as to how to pay a bankruptcy lawyer when you have no money to begin with....??)

he lives in maine, so i know that defines some of the excepted assets that can be protected in bankruptcy, I think his condo just exceeds that exception, by like $10k -- maybe. after realtor fees it would be wiped out.

if this gets really ugly, he may attempt suicide again, which is another worry.

Criteria for getting SSI is less than $2k in assets. He owns a house. Inheritance counts as an asset. Did he lie in his application or are you talking about some state disability benefit?

[Anonymous]

Anonymous wrote:

Anonymous wrote:brother has a series of mental health issues and is unable to work. he lives in a small condo bought with money inherited from our parents, and receives SSI and Food Stamps. Owns an older car in pretty bad shape but works okay.

before going on disability, he had been working sporadically and thus had ok credit and such, and managed to amass about $8k in credit card debt. recently, he was served by the sheriff that the credit card company is suing him for the $8k in debt. it was spent frivolously, as a means to cope with his mental health issues.

how will this play out most likely? from what i read, they probably can't take the car or house, though a judge may put a lien on his property? can they force the sale of his condo to pay the debt? can he declare bankruptcy (but we are really confused as to how to pay a bankruptcy lawyer when you have no money to begin with....??)

he lives in maine, so i know that defines some of the excepted assets that can be protected in bankruptcy, I think his condo just exceeds that exception, by like $10k -- maybe. after realtor fees it would be wiped out.

if this gets really ugly, he may attempt suicide again, which is another worry.

Criteria for getting SSI is less than $2k in assets. He owns a house. Inheritance counts as an asset. Did he lie in his application or are you talking about some state disability benefit?

Maybe OP meant SSD?

[Anonymous]

Anonymous wrote:Your brother should contact the legal aid organization in his jurisdiction. Even if he can't avoid the judgment, since he collects SSI, his income isn't garnishable. With respect to the condo, car and any other assets, state law may offer protections from his creditors. And if there are none, they may be able to help him file for bankruptcy.

+1 CONSULT A LAWYER. Contact the Legal Aid/Legal Services office in his area, or ask a local program that works with the mentally ill for referrals to legal help.

[Anonymous]

Anonymous wrote:

Anonymous wrote:brother has a series of mental health issues and is unable to work. he lives in a small condo bought with money inherited from our parents, and receives SSI and Food Stamps. Owns an older car in pretty bad shape but works okay.

before going on disability, he had been working sporadically and thus had ok credit and such, and managed to amass about $8k in credit card debt. recently, he was served by the sheriff that the credit card company is suing him for the $8k in debt. it was spent frivolously, as a means to cope with his mental health issues.

how will this play out most likely? from what i read, they probably can't take the car or house, though a judge may put a lien on his property? can they force the sale of his condo to pay the debt? can he declare bankruptcy (but we are really confused as to how to pay a bankruptcy lawyer when you have no money to begin with....??)

he lives in maine, so i know that defines some of the excepted assets that can be protected in bankruptcy, I think his condo just exceeds that exception, by like $10k -- maybe. after realtor fees it would be wiped out.

if this gets really ugly, he may attempt suicide again, which is another worry.

Yep. this happened to my mother-in-law at least 3 times by 3 different credit card companies. they garnished her paycheck until the debt was paid. it took several years. it wasn't an astronomical sum, but enough to hurt. my third (maybe even 4th) time, she filed for bankruptcy. all she had to do was answer their damn calls. ugh. that woman lives in my house now.

The only reason a credit card company sues you - is because you don't answer their calls.

Most of the time, if you work with the credit card company - you can end up settling the debt for pennies on the dollar. It doesn't look great on your credit - but that shouldn't matter - if the credit card company is coming after you, your credit is probably shot already. Tell him to call the credit card company - explain his situation - and let them know that he is open to a settlement - which usually comes out to 10% of the debt and closure of the account.

[Anonymous]

Anonymous wrote:

Anonymous wrote:brother has a series of mental health issues and is unable to work. he lives in a small condo bought with money inherited from our parents, and receives SSI and Food Stamps. Owns an older car in pretty bad shape but works okay.

before going on disability, he had been working sporadically and thus had ok credit and such, and managed to amass about $8k in credit card debt. recently, he was served by the sheriff that the credit card company is suing him for the $8k in debt. it was spent frivolously, as a means to cope with his mental health issues.

how will this play out most likely? from what i read, they probably can't take the car or house, though a judge may put a lien on his property? can they force the sale of his condo to pay the debt? can he declare bankruptcy (but we are really confused as to how to pay a bankruptcy lawyer when you have no money to begin with....??)

he lives in maine, so i know that defines some of the excepted assets that can be protected in bankruptcy, I think his condo just exceeds that exception, by like $10k -- maybe. after realtor fees it would be wiped out.

if this gets really ugly, he may attempt suicide again, which is another worry.

Criteria for getting SSI is less than $2k in assets. He owns a house. Inheritance counts as an asset. Did he lie in his application or are you talking about some state disability benefit?

Op, don't listen to this poster. Policy is clear, but convoluted. There are asset exemptions and exceptions. There are grace periods during which lump sum income is not counted against you. I'm not even going to try to specifically state the policy here on dcum, and neither should this pp. Don't accuse someone you don't know of lying about something you know little about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:brother has a series of mental health issues and is unable to work. he lives in a small condo bought with money inherited from our parents, and receives SSI and Food Stamps. Owns an older car in pretty bad shape but works okay.

before going on disability, he had been working sporadically and thus had ok credit and such, and managed to amass about $8k in credit card debt. recently, he was served by the sheriff that the credit card company is suing him for the $8k in debt. it was spent frivolously, as a means to cope with his mental health issues.

how will this play out most likely? from what i read, they probably can't take the car or house, though a judge may put a lien on his property? can they force the sale of his condo to pay the debt? can he declare bankruptcy (but we are really confused as to how to pay a bankruptcy lawyer when you have no money to begin with....??)

he lives in maine, so i know that defines some of the excepted assets that can be protected in bankruptcy, I think his condo just exceeds that exception, by like $10k -- maybe. after realtor fees it would be wiped out.

if this gets really ugly, he may attempt suicide again, which is another worry.

Criteria for getting SSI is less than $2k in assets. He owns a house. Inheritance counts as an asset. Did he lie in his application or are you talking about some state disability benefit?

Op, don't listen to this poster. Policy is clear, but convoluted. There are asset exemptions and exceptions. There are grace periods during which lump sum income is not counted against you. I'm not even going to try to specifically state the policy here on dcum, and neither should this pp. Don't accuse someone you don't know of lying about something you know little about.

+1. Accusatory PP doesn't know anything about SSI. A house you live in is not a countable resource towards the $2k maximum. If there was cash inheritance, it may have been spent down within 9 months, placed in ABLE account or Special Needs Trust, or led to a period of suspension of SSI until the cash was spent.

If there's an SSA issue, contact legal services.
For the debt issue, contact legal services. If they can't help, making sure that the lawyer for the credit card company knows that your brother gets SSI and is collection-proof could be useful. Creditors don't want to spend money on legal fees to get judgments they'll never be able to collect.