Question:
Dear Steve,
I have been disabled for 10 years now collecting only SSDI. I am over my head with credit card and student loan debt. My medical expenses and rent have gone up significantly in the past 2 years. My federal student loan is on an income-based repayment of $0/month. My private student loan will no longer work with me on lowering my payment. They have advised me to try for a disability discharge. I don’t feel like I will be approved.
I was advised by a lawyer at a free helpline to send in a request for verification letter and a copy of my SSDI statement and state that is my only income. He said chances are they will write off the debt and leave me alone since they cannot collect from SSDI.
If the credit card companies write off my debt due to SSDI is that final or can they come after me if I get a part-time job in the future? If they do, and I cannot afford to pay can I file bankruptcy on a written off debt?
Michelle
Answer:
Dear Michelle,
When it comes to private student loans and disability forgiveness, it’s not a given outcome. It’s worth a shot, you’ve got nothing to lose.
Your credit card companies are not going to just write off your debt because you are on SSDI.
The process for both the private student loan and credit card debt is the same.
If you stop making payments on the debt and default, they will attempt to collect on the debt and they might sue you but if they do sue you, you will probably lose. But you can fight any attempt to garnish income or levy your bank account because you are on public benefits.
If you do get a job and earn non-exempt money in the future they can attempt to garnish those wages if their judgment is still in force.
The most complete way to deal with the credit card debt, depending on how much you owe, is to file bankruptcy and have that debt eliminated forever. No further collection activity should occur.
If the private student loan is in default and the statute of limitations has expired in your state then it can be eliminated in a bankruptcy as well.
You may want to contact this group and have them run interference for you with your creditors. They are a low-cost nonprofit law firm that specializes in assisting seniors and disabled people.
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