“Dear Steve,
‘ve been a single parent for the last 19 years of two children who receives SSI and my daughter’s survivor death benefit as our family’s sole source of income for the last 5 years. Before that it was welfare and FS only. I was not always able on my limited income (below poverty level) to make ends meet so out of necessity I ended up making the mistake of obtaining store cards and a couple credit cards to use mostly for emergencies, like health care, paying bills to avoid shut offs, food expense and the like.
I was working with a non profit debt consolidation agency that required one monthly payment from me which I was faithful in paying for four almost five years, the alloted amount of time they indicated with their figuring it would take to pay my total debt off with the new lowered interest rates they obtained.
Unfortunately they regularly didn’t pay the companies in time and late fees accrued for a few years and added to my total debt which they didn’t take responsibility to agree to remedy. They didn’t have an answer when I kept asking the reason for this. I came to the point where I lost faith in them, didn’t know where else to turn and due to the priority of needing to literally feed my children I let them know this lowered monthly amount which was the very lowest they could do for me was more than a hardship for me and that I couldn’t manage making payments to them anymore.
For the last 8 or 9 years I have not done anything. Collection agencies are still tacking on charges and selling my debt to other agencies for whatever price added to my total debt. My attorney father indicated I needed to send letters to these agencies which I did and don’t remember getting any responses back. I don’t really remember the content of what I indicated in these letters. My father doesn’t really know the laws surrounding debt and hasn’t been too helpful in finding out info so I called bankruptcy attorneys which indicated I could apply but this didn’t make sense to me given I don’t really own anything of any value they anyone could take away from me and don’t even have a savings account let alone have the ability to afford the cost of going bankrupt,- pretty pathetic I realize.
I’m still in the dark of what to do. I still get annoying collection agency letters so I am assuming no but I would like any info about options I have to resolve this as I don’t like this hanging over my head. I haven’t done recent calculations but I do know I get rejected when applying for any credit so I must have a lousy credit report. Other than that my best guess is I am 15,000 or 20,000 in debt.
My question is, is there a set period of time of not being able to make any debt collection agency payments due to extreme hardship where one’s debt goes away or is forgiven and you are given an opportunity to get a fresh start? I’ve heard various things such as after 7 or more years of not having any credit cards and or store cards that this can happen, but I have questioned this given I can’t get approval for credit cards( I have done this to find out if anything has improved as far as my credit standing over time since I don’t know my current credit rating and can’t afford getting my credit report); I still get collection agency debt notices, though no longer the harassing phone calls.
I did get approval on two store cards but no credit cards so I don’t know how to interpret this. Is there such thing as what my attorney father thought there might be where you write letters to these agencies explaining your plight and with them never responding within a given time frame, after a certain amount of years your debt is absolved? If not so, please let me know what else can be done and what other options I have if any
Thank you!!!!!!
Dina”
Dear Dina,
Well I owe you a big thank you for giving me so much information. It really helps in answering your question.
Let’s just get straight to the bottom line. There isn’t anything we can do about the past now. It is certainly too bad the debt management plan with that credit counseling program did not work out. But many don’t.
Probably the best thing to do at this point is nothing. Sounds ridiculous right? It is most likely that these very old debts are now beyond the statue of limitations for you to be sued for them. Although, companies can still attempt to collect until you die.
It seems to me that your biggest issue at this point is not to focus on repairing the past, but to turn around and focus on making your future safer. To do that you should probably not send any more funds towards those old debts and take whatever, if any, money you would have used and save it in a boring old savings account.
Again, in my personal opinion, I think you provide a greater benefit and service to yourself and your children by doing the best you can right now to create some financial stability moving forward.
It seems that now is the time for you to think about finding a job, or two in order to start to build up an income stream that is not primarily dependent on SSI. I would also suggest that you avoid the store cards or credit cards until you do. Otherwise, this will be a repeating cycle and I need for you to build up income before you even get tempted to use credit again to help makes ends meet.
The difference in this approach is rather than using credit to bridge you in time when you have needs and no money, the proper use of a credit card is as a convenient financial tool to use when you have the money to pay for it. Credit cards are are a transactional tool, not a life bridge or safety net.
Oh yes, the letters were not a waste of time but probably didn’t change much.
When you can afford to, get a copy of your consolidated credit report and it is time to take a look at what is still on it after all these years. Since it has been longer than seven years, the old stuff should not be reported on it anymore. Don’t confuse not being reported with not being collectible. You can still be chased even if it is not on your consumer credit report.
One place you can get a free copy of one of your credit reports and credit score is at Credit Karma. It’s probably worth even getting a look at that just to get an idea when you stand now.
Please update me on your progress by
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