Seniors face tremendous financial pressure trying to make ends meet living on a fixed income.  They often must revert to credit cards to survive!

Unfortunately, the balances and minimum payments continue to increase to a point where there is just not enough income from their fixed income or modest retirement.

What can they do?

I've been helping seniors deal with too much credit card and other unsecured debts for a long, long time.

Most of my clients found themselves in real financial trouble and had no idea of how to solve the problem.

If you search the internet, most likely you'll find numerous ads from bankruptcy attorneys, offers for loan consolidation and/or poor advice to transfer balances from one card to another.

There are better solutions!

But first....

Debt Collectors and even Law Firms that specialize in debt collection will try to intimidate or scare seniors into making poor decisions!

The Fair Debt Collection Practices Act spells out what a collector legally can and cannot do.

Basically, a debt collector cannot:

• Make threats of garnishing retirement benefits or bank accounts
  
  
• Use inappropriate language or baseless claims
  
  
• Attempt to collect on a debt owed by a deceased spouse (unless you and the deceased spouse where co-signers on the debt or card)
  
  
• Attempt to collect on a debt that has gone beyond the Statute of Limitations (these vary state by state)
  
  
• Make calls to you before 8am or after 9pm in your time zone
  
  
• Threaten with legal action if no legal action is taken
  
  
• Make excessive calls though out the day!
  
  
• Make calls to you if you are on the Do Not Call registry (only the original creditor has the right to call you)
  
  
• Continue to call even after you have sent a Cease and Desist letter 

OK, we've detailed some of the practices a collector CANNOT do, let's see what they CAN DO and what options you have...

Debt Management Programs

(called Consumer Credit Counseling)

A Debt Management Program is for those who are making the minimum payments, but realize the balances are barely going down !

If you qualify, you should see a reduction in interest rates and possibly have over-the-limit or other fees dismissed.

You will be making one monthly payment (roughly equal to the total you are currently making) to a Debt Management Company.

People in a Debt Management Program are usually out of debt in 4-5 years.

If you currently cannot keep up with the required minimum payments, then most likely a  Debt Management Program will not be an option for you.

Debt Settlement Program

Creditors, collectors and Debt purchasing companies will usually accept a reasonable settlement offer for less than the full balance due.

Unfortunately, in the past, there were numerous so called Debt Settlement Companies who were fraudulent and unscrupulous!  

Recent laws in most states have have helped run these types of companies out of business, and yet a few remain.

Before you consider seeking the help of a Debt Settlement Company, you should do your due diligence and check them out!

A representative will discuss your particular situation and determine a monthly deposit that you can afford.

This monthly withdrawal from your account is deposited and held by a FDIC bank (Wells Fargo, US Bank, etc.)

As the funds in your account increase, settlement negotiations begin.

Once the settlement agreement is negotiated (must be in writing), a lump sum or series of payments are make according to the agreement.

Once the agreement has been satisfied, a letter is sent stating something like "the account has a $0 balance and is settled in full".

This will also be reflected on your credit report and over time, your credit score should improve.

If you just cannot keep up with your minimum payments or even cannot afford a Debt Settlement Program, then you might have to consider filing for...

BANKRUPTCY

Although "bankruptcy" is a scarry and often misunderstood legal option, in some cases, it is the best option.

You should consult several attorneys who specialize in bankruptcy before making a decision.

A qualified bankruptcy attorney should not charge for the initial consultation.

Finally...

Being a Senior Citizen and trying to live on a fixed income is very stressful.

If you could use some advice or guidance, let us know.

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When you have too many credit accounts and cannot meet the minimum payments required, then it may be time for you to consider a DEBT SETTLEMENT PROGRAM.

There are many reasons a financially stressful situation like this can happen, but some of the most common are:

• Loss of employment or layoff
• Too little income in retirement
• Unexpected medical bills
• Increasing cost of medications
• Divorce
• Disability
• Loss of spouse or partner

These are just some of life experiences that can financial hardship.

If one or more of these sounds like what you are going through, you may have several options:

If you have enough equity in your home, a refinance or equity line of credit may be a solution.  

If you qualify for a consolidation loan or balance transfer and the interest rate is not too outrageous, then that may work.

You may qualify for a Credit Counseling or Debt Management Program.  But if you are having a hard time keeping up with the total due for all of the minimum payments now, most likely this type of program will not help.

What about BANKRUPTCY?

I believe bankruptcy can be a viable option if you have tried all other options.  Bankruptcy laws have changed over the last few years to prevent someone from trying to use bankruptcy to discharge debt when they possibly could meet their promised to repay!

So how does a DEBT SETTLEMENT PROGRAM work?

If you have missed a couple of months of making the minimum required payment due on all of your accounts or cards, they are probably getting close to being "charged off".  

When this happens, the account will most likely be transferred or sold to a third party debt collector or debt purchasing company.

Most people are not aware that there is a multi-million (or most likely) billion dollar industry that purchases old, delinquent debt for pennies on-the-dollar for collection!

Let's say you have a credit card and due to circumstances beyond your control you just cannot make the payments.

The original creditor will call and send letters trying to get you to start making payments again.  But after 3-4 months, the account lands with a Debt Collector.

Now the Debt Collector starts calling, and calling, and calling.....

The good news is that now you can put a stop to those annoying calls!

But the letters keep coming!

These letters will try to get you to pay or in some cases, they may offer to SETTLE THE ACCOUNT for less than the balance due!

This offer may be anywhere from a small reduction or possibly a very good reduction.  

You may also be able to contact the debt collector to NEGOTIATE a better settlement or perhaps to let you take advantage of the settlement offer by making a series of monthly payments that you can afford.

Negotiating with debt collectors can be very time consuming and stressful.

I've been helping people deal with the stress of too much debt and negotiating with debt collectors (many time attorneys) for many years, so I know from personal experience!

The agent for the debt collector's job is to get as much money out of you as possible!  In many cases, their income, commission or bonus depends on being very inflexible.

The agent will try to intimidate you and in many cases try to shame you into getting you to pay back all of the balance!

There are laws that protect consumers from illegal collection tactics, but most people are not aware of them.

I've written several articles about dealing with debt collectors.  Here's one that may be especially helpful:

Debt Collectors, the FDCPA and Your Rights

For the sake of this blog, let's say that you negotiate a settlement for less than the balance due...NOW WHAT?

DO NOT, I repeat, DO NOT make any payment (by phone or mail) without a WRITTEN SETTLEMENT AGREEMENT!

A settlement agreement is basically a modified contract from the original contract (application) you signed when you took out the card or loan.

If the agent will not email, fax or mail the written agreement, then no settlement/no payment....PERIOD!  It is your only proof of payment once the agreement is completed.

Here is link to what a settlement agreement looks like:

Once the settlement agreement is completed, you can request a letter or statement showing a $0 balance, but if they will not comply, then your cancelled check or bank statement showing payment along with the settlement agreement will suffice.

Over time, you can get yourself back to being DEBT FREE! 

If all of this sounds like a little too much for you to handle, let us know:

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If you've been slapped with a WAGE GARNISHMENT, you need to know WHY it happened and HOW to put a STOP to it!

A wage garnishment or bank levy/garnishment doesn't just "happen"!  

Before a "writ of garnishment" can be granted to a creditor or debt collector, several things have happened:

When you sign up for a credit card, bank card, or any unsecured account (including medical bills), you have entered into a legal contract with the basic agreement that you will repay the loan at the terms and time frame outlined in the agreement.

If you don't, the original creditor has the right to:

• Call you
• Write you, or...
• Hire a Debt Collector, or...
• Retain an attorney to file a claim...bring a lawsuit!
• Go to court to win a judgment against you
• Apply for a Writ of Garnishment 

Let's walk through the process leading up to a WAGE GARNISHMENT, and I'll show you how to:

1. Prevent a judgment
2. Prevent a garnishment
3. Stop a garnishment 

I've been helping people deal with credit and debt problems for many years and it still always is a mystery to me when someone calls for help and says,"I had no idea this was going on"!

Well, I suppose that is possible, but most likely, here is what happened:

1.  Something happened in your life that caused you to be unable to keep up with the required payments.  It could have been one or more of these:

• Loss of employment
• Divorce or other family problem
• Death of a spouse or loved one
• Long illness or disability
• Barely enough income after retirement

When you are late or unable to pay the minimum payment due, you probably already know, but...

2.  Creditors start calling and writing, trying to find out what is going on.

Unfortunately, the original creditor has the right (remember that agreement with all the FINE PRINT?) to call or contact you by mail, so at this point, you cannot legally stop them.

3.  If the original creditor cannot contact you or you do not talk with them or return their request for a call, then they may place the account with a DEBT COLLECTOR.

The debt collector will start calling, and calling, and calling....very annoying!

But now you have the right to PUT A STOP TO THESE CALLS FROM DEBT COLLECTORS!

When your account has been placed with a debt collector, you may have the opportunity to SETTLE THE ACCOUNT BALANCE FOR LESS!

This is called DEBT SETTLEMENT and depending on your circumstances, this can be a very effective method for not only reducing the balance due, but also stop the potential legal process that may begin.

Although dealing with a debt collector can be a very intimidating and frustrating experience, if you feel up to it, you may want to call and see what they are willing to do for you,

If you are uncomfortable doing this, you can get help:

4.  If the debt collector cannot get you to set up payments to repay or are not willing to accept a REASONABLE SETTLEMENT, then they may decide to FILE A CLAIM.

Once the Claim is filed, a SUMMONS will be issued.  It usually is delivered in person, but may be sent by registered mail.

As I said earlier, although people will say that they never received a summons, in most cases...

• They had received it, but just ignored it!
• Someone in the household signed for it.
• Someone in the household signed for it if delivered by registered mail.

But even if you really never received or saw the summons, at this point, it may too expensive to fight!  Yes, you could, but most likely you won't.

SO, NOW WHAT????

5.  The summons had stated that you had 20 -30 days to give an "ANSWER".

A legal ANSWER is you legal response to the claim/summons that you do not owe the debt and CAN PROVE IT!

Most people know that they owe the debt and so spending the money to give the ANSWER ( yes, it costs money to FILE AN ANSWER!!!), is a waste of time and money.

6.  Even if you do not file an ANSWER, you can still stop the process by negotiating a STIPULATED AGREEMENT.

Depending on your financial circumstances, the plaintiff (creditor) may agree to a repayment plan rather move forward for a garnishment.

The reasoning is that if you are slapped with a garnishment it may force you to seek bankruptcy protection.  If that happens, they may get little to nothing!

7.  But, if the previous procedures fail to prevent the garnishment or you receive noticed from you employer that you will be garnished, you still have options:

• Call the attorney for the plaintiff and attempt to negotiate a repayment plan in lieu of the garnishment.
• Seek bankruptcy protection.

Even if you receive the notice of garnishment from your employer, you still may be able to contact the attorney for the plaintiff/creditor and work out a repayment plan.

You will need to be able to show hardship and offer a reasonable payment plan.

But if the plaintiff/creditor refuses, then you may be forced to seek BANKRUPTCY PROTECTION.

Bankruptcy is a drastic option, but is not as bad as you think it is.  

Check with a bankruptcy attorney to get understand your options.

Now you know "WHY" the "HOW TO STOP" a garnishment.

But, taking action is still too much for most people.......

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