My mom needs help with this she has been paying U.S. Legal Services Group for more then 3 years now.
Now they are switching to Global Client Solutions and sent her a check and told her the accounts haven’t been paid for 3 months.
She has been paying them $500 a month all this time. What should she do? She’s older and just pays out of social security each month and she thinks she has to borrow thousands from me to pay them off. What do we do?
Well obviously I don’t know what her situation was when she enrolled but from what you’ve shared, I think you might want to evaluate her situation anew.
If she is living just on public benefits, Social Security, then if she just stopped paying her unaffordable debts she could be sued but her Social Security would not be garnished, unless she owed the government.
Hopefully, when she enrolled in the program she is in they went over all of her options, including bankruptcy. For someone who is heading into a limited income, retirement, and living primarily on benefits, bankruptcy is the fastest way to deal with debt for the least amount of money.
Even U.S. Legal Services Group talks about bankruptcy on their site:
Chapter 7 is called straight or liquidation bankruptcy. The court appoints a Trustee who may liquidate or sell some things that the client owns to pay their creditors. Most of their debt will be canceled, but they may choose to pay some creditors, usually to keep a car or home in which the creditor has a lien. Chapter 7 may eliminate most kinds of unsecured debt. Some examples of unsecured debts Chapter 7 may eliminate are credit cards; medical bills, personal loans, judgments resulting from car accidents; and deficiencies on repossessed vehicles. – Source
The only part of their statement that I wish was clearer is that the Trustee is most often not going to sell anything. What the Trustee is looking for are big assets, not somebody’s household goods.
They also say:
There have been recent changes to the qualification process which have made it much more difficult to qualify for a Chapter 7.
– And –
USLS Group always makes its clients aware that it is much more difficult to declare bankruptcy than it used to be. In addition, bankruptcy is highly regulated with requirements that could be an imposition on the debtor. Some lawyers who handle bankruptcy will not accept cases unless the amount of debt is at least $45,000. Bankruptcy, whether Chapter 7 or 13, will stay on the debtors credit report for 10 years from the date discharged, and becomes a public record for life. – Source
I find those two statements a bit misleading. There were changes to the bankruptcy laws in 2005, hardly recent. And those changes did not make it “much more difficult” to qualify for a Chapter 7 bankruptcy. Even today about 70%-75% of bankruptcies filed are Chapter 7.
I also don’t think it is more difficult in the past decade to file bankruptcy. In fact the U.S. Court has just released new easier forms for consumers to file bankruptcy themselves if they wanted to take that route. The mention of a dollar limit to file is news to me. Attorneys get paid to file, not paid on how much debt you have. First time I’ve heard that statement. And then there is the statement bankruptcy will stay on the credit report for up to ten years. While that is true, it’s not mentioned that other solutions, like “Debt Resolution” where a consumer falls behind on their payments can be reported for up to 7.5 years.
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Here is what I think is a logical and commonsense approach at this point. I would suggest that you and your Mom should visit with a couple of local bankruptcy attorneys who are licensed in her state. Just go and get a second opinion and see what they say. That is certainly not something even U.S. Legal Services Group can take issue with if they are putting your needs first.
As a complete aside, when you talk to U.S. Legal Services Group, you might want to ask them why their law firm with a number of different attorneys appears to be located in a rented virtual office space. They say they are at 1 Sansome Street, Suite 3500,
San Francisco, CA 94104. – Source
That’s the office of Premier Business Centers. How big is the firm if they are using a virtual office?
It is kind of odd that U.S. Legal Service Group was formed by Mandip S. Purewal who is a “Litigation, General Practice, Real Estate, Tax” attorney who is located in Pleasanton, California. – Source
The State Bar of California says he actually associated with The Purewal Law Group and his web address is nationalconsumerlaw.com which is for the National Consumer Law Group at the same virtual office address.
All of this doesn’t necessarily mean a whole lot except why are there three law firms?
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