How to Get Out of Debt With the Get Out of Debt Guy » free legal aid http://getoutofdebt.org Free debt help and debt advice on how to get out of debt, getting out of debt consolidation scams, and inside information on the debt relief and debt help industry. Sat, 26 May 2012 00:15:05 +0000 hourly 1 http://wordpress.org/?v=3.3.2 Deborah Wants to Write Letters to Creditors. But is That a Waste of Time? http://getoutofdebt.org/4552/deborah-wants-to-write-letters-to-creditors-but-is-that-a-waste-of-time http://getoutofdebt.org/4552/deborah-wants-to-write-letters-to-creditors-but-is-that-a-waste-of-time#comments Thu, 25 Mar 2010 17:26:58 +0000 Steve Rhode http://getoutofdebt.org/?p=4552

From How to Get Out of Debt

Deborah “Dear Steve, I have over $30,000 of debt. Most of this is credit card debt but almost as much is medical (doctors, emergency room, ambulance, nursing home, etc.) I thankfully had insurance that paid 80% of those bills. I am disabled now. I have just recently begun getting a disability check ($677.00/month) I have [...]

Read the full article at GetOutOfDebt.org, click here: Deborah Wants to Write Letters to Creditors. But is That a Waste of Time?

]]> From How to Get Out of Debt

Deborah

“Dear Steve,

I have over $30,000 of debt. Most of this is credit card debt but almost as much is medical (doctors, emergency room, ambulance, nursing home, etc.) I thankfully had insurance that paid 80% of those bills.

I am disabled now. I have just recently begun getting a disability check ($677.00/month) I have no job, no savings, no checking account, no property, car, etc. I do not own a house either. I am divorced.

I stay with my sons and their families. I also stay with my ex-husband at times. I do still receive my mail at his house.

I am on some very expensive medications, I still have to go to the doctor every 2 months. I have test done (blood, urine, etc) In other words most of my disability goes to pay for medical needs. I will be eligible for medicare/medicaid, in January ’09.

I do not have money to even see a lawyer about filing bankruptcy much less pay court cost or whatever that is called. I have had three garnishments, even though I haven’t worked in over 2 years. The collection people call my children, my brothers, sisters, ex-husband, and even my ex-brother-in-law. I am 52 years old.

I don’t know what to do. I think I should write letters to the creditors and explain my situation. My son says they don’t care a bit about why I can’t pay. I don’t own anything that can be repossessed. My son says to just forget about it, my credit is already ruined. Can they put me in jail for this? I am so frightened. We do not have a free legal aid here where I live.

Deborah”

The Answer:

 

Dear Deborah,

I am so sorry that you have had to live through this struggle and financial stress. Hopefully by the time you finish reading my answer you’ll feel better about the situation.

Here is what I learned from reading your information; you are homeless and broke. While you have a roof over your head, thanks to the kindness of people that love you, you have nothing for creditors to go after. You did not mention it but I suspect you don’t have loads of stocks or cash in the bank.

In your current financial state, bankruptcy would probably be the best solution since there is no expectation that you will be able to repay these debts. But it isn’t free to go bankrupt, even if a bankruptcy lawyer donated their time to help. You could go down to the local bankruptcy court, get the forms for free and file bankruptcy yourself but you’d still have to pay the court fees. Maybe you can ask for bankruptcy filing fees for the upcoming holidays?

Writing letters to your creditors may be a valuable exercise if it helps you to feel like you have done the responsible thing by being open and honest with them. The reality is that it probably won’t change a thing or stop collection activity, except for maybe a random creditor. Generally it is not effective at all.

Your situation does not prevent you from being pursued by collectors or sued by your creditors. But even if your creditors sued you and won, which they will, you don’t have anything for them to go after. If your financial situation improves you could go bankrupt then and it would kill the financial claims against you, even if you are sued and lose.

You can deal with the collectors in the following ways: