Ask The Get Out of Debt Experts Lawsuit

I Have Big Student Loans, Just Had a Baby, Unemployed, and Getting Sued by My Credit Card Company. – Lauren

“Dear Steve,

When your young they tell you to go for your dreams and that you can be anything you want when you grow up. I unfortunately dreamed of being a teacher I couldn’t afford to go to college and took out expensive private loans (about 64,000 total now with interest) and a credit card (5,000) for other expenses. I graduated top of my class with a 3.86 GPA and was sue I would finally achieve my dream. I live in PA and there are no Elementary teaching jobs available in fact schools are being closed and teachers being laid-off. The best I could find was an aide position in an autistic support classroom. I ended up getting pregnant and laid-off and now I am living on unemployment with a 6 week-old baby. I keep having to put my student loans in forbearance and am running out of time. I couldn’t afford living in my apartment,car, and paying my credit card. I am now being sued by my credit card and have 25 days till the court hearing. I can’t afford an attorney because my fiance’ is living with me who makes about $1950 a month (I make 600 a month from unemployment) I called a pro-bono company who told me I am over the income limit to receive free legal help. I can’t even marry my fiance for the fear that my bad debt will hurt him (such as taking his house or garnishing his wages) I do eventually want to go back to work but my baby has medical issues and is still young and I can’t find a teaching job and even if I did the cost of putting her in daycare would probably make it not worthwhile.

What should I do about this credit card lawsuit? Is bankruptcy my best option even though it will be costly? What can I do about my student loans? Please help I feel hopless and scared… so much for dreams.

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Lauren”

Dear Lauren,

Let’s take this in stages. You can get married. Your debt will not impact your new husband as long as it is in your name alone.

At present four U.S. states — North Carolina, Pennsylvania, South Carolina and Texas — do not allow wage garnishment at all except for debts related to taxes, child support, federally guaranteed student loans, and court-ordered fines or restitution. Several other states observe maximum thresholds that are lower than the 25 percent maximum provided by federal law. – Source

It sounds like filing bankruptcy is the best course moving forward but if you can’t afford that right now then I still think you should meet with a local bankruptcy attorney to get educated about what bankruptcy would mean for you.

If you can’t afford to file bankruptcy you might just have to let the lawsuits pile up till you can deal with them. At the very least, try to find a local attorney who can give you some legal advice about your situation.

Since you have private student loans those have to be your first priority and you’ll need to pay them first before you pay any other unsecured debt.

I’m not clear, is your entire debt outside of the student loan only $5,000?

Please post your responses and follow-up messages to me on this in the comments section below.

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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.

7 Comments

  • Thanks Steve. Yes I have the 5,600 credit card and I believe one other credit card that is only $250 so I’m not worried about that one. I am wondering if I should even bother calling the big credit card and explaining my situation and offering them $50 a month because basically that’s about all I can afford at the moment. Would that be a good thing to do? Do you think they would accept that if I explain to them I don;t have an income really and no assets so they probably won’t get anything for awhile since my baby needs me at home due to physical therapy, etc and therefore won’t be returning to work anytime soon.

    • Hum, well in that case while you can always file bankruptcy it may not be worth it. If you can I’d satisfy that $250 and just get that off your back. No need being chased by two creditors when you can eliminate one for $250.

      I think calling your creditor is a great idea. Just be open and ask them what they say they can do to help. If they can’t offer you a payment you can reasonably afford to make month-after-month for the next five years then your choice may be to decline their payment program.

      Paying anything less than you can agree to with them doesn’t ultimately solve the problem.

      And as you observed, all you can do is all you can do.

      • Tried to call the company but they said they can not discuss it and my account has been given to their attorney and would need to call him. I’m not sure if i should call him would he even be able to handle payment plans. I’m afraid that If I talk to him anything I say could be used against me.

        • Just remember, if you don’t communicate with your creditors it already leads accounts in one direction always and does nothing to reach a mutual agreement to avoid being sued.

          If you feel you can call and have a discussion without disclosing information you don’t want to, call.

          •  You were right! I called they dropped the suit and are accepting 185 a month. It’s more than I wanted to pay but better than going to court!
            THANK YOU STEVE!

  • Thanks Steve. Yes I have the 5,600 credit card and I believe one other credit card that is only $250 so I’m not worried about that one. I am wondering if I should even bother calling the big credit card and explaining my situation and offering them $50 a month because basically that’s about all I can afford at the moment. Would that be a good thing to do? Do you think they would accept that if I explain to them I don;t have an income really and no assets so they probably won’t get anything for awhile since my baby needs me at home due to physical therapy, etc and therefore won’t be returning to work anytime soon.

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