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Accredited Debt Relief Says I Will Need to Default on My Debt. I’m On a Fixed Income. – Vicki

“Dear Steve,

I’m living on a limited income. Social Security $1060. and a small pension of $160. I lost my Long Term Disabiltiy when I turned 66 which was $549 so I lost a lot of money. I have a credit card with Wells Fargo that use to be 11% until they received the money from the government. Then my interest rate jumped to 25%. I finally got them to lower my rate to 21% fixed. Payments are $253 and I owe approx. $8500. I also have a Captial One credit card at 17.85%. Owe $2700. and payments are $71.00. The last card I have is interest free for another 6 months. It’s a Discover Card my balance is $2800. Before Wells Fargo raised the interest rate I was making large payments to Discovery. Now I can’t do that so I send $200.

I pay on time and have never been late. I talked to Accredited Debt Relief and they told me to stop making payments and go into default. I can’t do that. I wish to have my interest rate lowered so I can make the payments. Right now it’s been very hard to keep things going since I lost my LTD. Can you please tell me which way to go and who would be the best company to go with. I’m in Calif. Thank you so much for your help.

Vicki”

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The Answer

Dear Vicki,

If you feel the monthly payments are affordable but the interest rates are just to high then a credit counseling solution sounds like a solution to investigate. You can use the link for more information on credit counseling or to request assistance.

Like every debt relief solution, credit counseling has some risks as well. Most prominently, unless you can make all of your payments, even at a greatly reduced or eliminated interest rate, the debt will not be permanently eliminated. You have to project you can make all five or six years of payments.

I do agree that based on the fact you have a limited income and it is comprised of potentially exempt income from potential wage garnishments that a debt settlement solution as allegedly proposed by Accredited Debt Relief, seems to not be beneficial.

If the credit counseling approach was not feasible or sustainable, and you had no other assets for creditors to go after, like investment accounts or equity on a house, then the most logical options would be to do nothing and let the creditors sue you but not be able to collect on any judgments they may win, or to pursue bankruptcy and eliminate the debt for good and avoid the entire getting sued phase.

I understand your desire to not default on the debt but at this point, with your limited income, it is my opinion that we need to prioritize your financial safety first and make sure they you do not enter any repayment program where you are spending all the money you have leftover each month. It’s tough enough to live on a fixed income and make ends meet as it is.

I would suggest we start this journey by having you read How to Get Out of Debt. The Honest and Unvarnished Truth. After you read that, come back here and post an update in the comments below and let me know what your current thoughts are about what I’ve shared with you here and we will take it from there.

Big Hug!

Accredited Debt Relief Says I Will Need to Default on My Debt. Im On a Fixed Income.   Vicki
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Accredited Debt Relief Says I Will Need to Default on My Debt. I'm On a Fixed Income. - Vicki by

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Anzavic

    Hi Steve, thank you for your reply.  I read the article and I fall into the trap of feeling bad not being able to keep up with my bills.   I’m still paying on time but it’s getting tougher now that food and gas prices have gone up.  I have land that I’m putting a manuf home on through the government.  They will make part of my house payments since I’m low income.  I’ve had to wait to get everything cleared and papers signed before I started on this project.  I also own my own car so I can’t have them take that.  It seems no matter what I do I could be sued by them to collect the debt.   Another thing, I don’t have the up front money to pay a lawyer to go bankrupt.   Any suggestions?  Vicki

    • http://GetOutOfDebt.org Steve Rhode

      Here is a list of low cost bankruptcy resources that you might just qualify for sine you have already qualified for some benefits.

      The car thing is typically not an issue. Not to assume, but I’m assuming you don’t have a recent expensive car you own free and clear.

      Talking to a bankruptcy attorney or one of those pro bono clinics at http://probono.abiworld.org/index.html does not mean you are going to file bankruptcy, just check into it and report back on what you learn.

      It’s time for a better future.

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