“Dear Steve,
I am currently on fixed income of about $657 amonth. My income comes from SSI and Social Security disability. I have a couple school loans and several past medical and credit card bills that I want to get paid off.
Tell me what I can do to get my credit cards and all my other bills completely paid without having all these creditors calling me everyday several times a day?
Crystal”
Dear Crystal,
I find it hard to believe that you even have any money you can use to spend on debt repayments.
You have a few options.
- Explain The Situation to Your Creditors – You could write to your creditors and explain what your circumstances are and that you are living only on SSI and Social Security, that’s important. In some cases i have seen creditors wipe out the debt at that point. They see that they really can’t go after you and they throw in the towel.
- Stop Making Any Payments – You could simply stop making any payments to your creditors and deal with them as they contact you. If they do decide to sue you they don’t have anything they can go after with your income coming from public benefits. Talk to a lawyer in your area for a definite answer but they will probably tell you that you are judgment proof.
- Go Bankrupt – You can close the door on these past debts with bankruptcy. Speak to a local bankruptcy attorney for free to learn about what bankruptcy would mean for you. You’ll need to get some legal advice about the discharge of the student loan debts with your situation.
It would be unreasonable for you to enter into any sort of debt repayment plan, debt management plan or a credit counseling program at this point. With your limited income I can’t see how those approaches would lead to a successful outcome.
If you feel overwhelmingly compelled to pay back some of the money, I’d suggest that you go bankrupt first and then repay what you can afford. The bankruptcy would stop all collection activity and improve your quality of life while you try to cope with life and disability.
While there is a cost involved in going bankrupt, it might just be a cost worth investing in.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
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