My Financial Problems - Advice & Support?

Discussion in 'Suicidal Thoughts and Feelings' started by Tim., Dec 5, 2009.

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  1. Tim.

    Tim. SF Emoti-King

    For months I really haven't been able to do much of anything. A good day I would get into work for a few hours or see a family member.

    The good news is that I am feeling a little better than I was. I'm starting to get a bit of motivation and energy back. The bad news is that financial problems have mounted up as I have largely ignored the bills and calls that I have received.

    This morning I took the step of actually sorting all the mail that I hadn't opened for what must be 6-8 months. There is a lot, and it is quite intimidating. I simply don't have the money to pay everything off. I'm hoping I can get on reasonable plans, stop the calls, and have some hope of paying everything off... someday.

    So I guess what I'm asking for here is if anyone has any advice on dealing with creditors and/or collection agencies.

    Also, I know everyone here has their own problems, but I would appreciate any support as I go through this... I have a feeling that as I try to deal with these things it will test my very limited resolve.
  2. lawstudentindebt

    lawstudentindebt Active Member

    First, you should contest any debts that you might have a good reason for not owing. After you do that, there are five traditional options, in descending order of preference: 1) consolidate or refinance your debts , 2) pay the debts directly, 3) declare some form of bankruptcy, 4) hide and avoid being found until the statute of limitations for all your debt is up (determining the appropriate statute of limitations can be complex though), 5) flee the country.

    I happen to know an awful lot about the complex legal consequences of option number 5 due to a course I just took, so if you're considering it, PM me. Obviously, though, that's probably the last thing you want to do.
    Last edited by a moderator: Dec 5, 2009
  3. Tim.

    Tim. SF Emoti-King

    Thanks for the help.

    I think I'm hoping for option #1. I just know it's going to be a bear facing up to the problems I've gotten myself into. I probably could have paid most of these (the payments, not the balance) if I had been able to get myself together. We'll see where they are now. I think I should be able to make payments with my current job if I can buckle down and get it figured out.

    I'm hoping to avoid option #3. The vast majority of my debts are student loans anyway, so those probably aren't going away in bankruptcy anyway.

    I'm going to really try and avoid options #4 and #5. I do want to pay off my debts. It's good to know that I have someone to ask if I need to go down that road, though.

    Thanks again for taking the time to help.
  4. lawstudentindebt

    lawstudentindebt Active Member

    Regarding option no. 1: Do you have any major assets like a home, undeveloped land, significant government bonds, etc? If so, you could potentially borrow against the equity of your asset, using the asset as collateral and get a much lower interest rate (the creditors see you as a much lower risk if they can take your property when you don't pay--with lower risk perception comes lower interest rate).
  5. WildCherry

    WildCherry Staff Member ADMIN

    There isn't much I can add to the above post when it comes to the financial aspect of things (I just spent several years getting out of debt myself). But if you ever need to talk or vent, or just need some support, feel free to PM me anytime!
  6. lawstudentindebt

    lawstudentindebt Active Member

    Also, I should mention that tort/contract claims are among the things that might count as "major assets"--so if you got badly hurt by someone else's fault, or someone breached a big contract with you, you could potentially assign the right to sue to your creditors, in exchange for partial debt forgiveness. This gets complicated though, especially if there's a chance of you eventually declaring bankruptcy, which changes everything. If you think this might apply to you, pm me.
  7. stormfront

    stormfront Member

    First of all, there is no debtors prison. You won't go to jail if you don't pay your bills.

    Having been in similar circumstances, you can contest the debts, as law student says. During my deepest, darkest days, I actually found that learning the debt laws was enough distraction to help me work THROUGH my depression and actually fight the credit card companies. It went so far as to actually land in court, to which I won my case against the company suing me - they had no proof of debt. Long story short, the debt collection agency bought the debt for pennies on the dollar and went collecting for the full amount. They had no paperwork, nothing on me, they were counting me on not showing and winning by default.

    Its good to see you want to pay off your debts. If you can't, however, you can't. Circumstances happen, stuff comes up. However, unless you own property, there's not really a lot that a collector can do. There is wage garnishment potential, but you'll have to check the laws in your state - some states don't allow it. Also bank account seizure, provided you actually have a bank account.

    Worrying about this doesn't help. When it comes to debt collecting, the law IS on your side. Debt collectors have a strict set of rules to follow, and if they so much as leave you a threatening voice mail, the law states that you can coutersue them for as much as 1000 per offense. SO, hopefully they'll leave you 10 nasty voice
  8. lawstudentindebt

    lawstudentindebt Active Member

    This is all correct.

    It also points out that it often IS worth contesting debt in many cases--a lot of people assume that they shouldn't bother doing that because they mistakenly assume that their creditors keep perfect records. Also, because you'd be the defendant in a case where the creditor is suing you for payment, they have the burden of proof on all the major issues. The chances of contesting a student loan, however, are slim--also there's no statute of limitations on student loans, so that actually kicks option #4 out of the picture too.

    Regarding debtor's prison--this actually becomes an issue when you're considering option #5. Some countries (notably Australia) still have prison for debtors, and some countries will recognize US debt. If you combine those two groups, you end up in a worse situation than staying here.

    Wage garnishment and bank account attachment are allowed in all federal courts and most state courts, but the above poster is right that there are limits on them. For example, a creditor generally can't garnish more than 15% of your "discretionary income," defined as your gross income minus federal income tax paid minus 150% of poverty level (there are tables available online to determine what poverty level is for your area and household size). Bank account attachment is a little harsher--they can pretty much keep you from withdrawing anything, and can actually do this WITHOUT a hearing (but only under really extreme circumstances--and if the creditor gets the attachment when they didn't really need it, you can sue them for wrongful attachment, and probably get more money than you owe them).

    Also, as an added perk--if you consolidate so that you only have one creditor, and that creditor garnishes your wages, your employer can't fire you on the basis of the garnishment without committing a tax crime (the IRS views this as the employer depriving it of you, a source of tax revenue). This little perk disappears, however, if there is more than one creditor doing the garnishing. So that's an extra reason to consolidate.

    Edit: regarding the prospect of suing for the abusive phone call--this would be a state tort, so that rule could vary significantly from state to state. Also, collection agencies generally have a little more leeway in this regard than say banks or credit card companies. However, if one of your creditors does give you an abusive call, and your state recognizes a right for you to sue them, you should sell that right to one of the other creditors or collection agencies.
    Last edited by a moderator: Dec 5, 2009
  9. lawstudentindebt

    lawstudentindebt Active Member

    Also, how much of your student debt is federal direct loan, and how much is private? Federal loans have some extra safety guards on them, and there's actually a way you can get them all discharged in 10 years making minimum payments if you work in certain public sector jobs for the whole time. You can accomplish this also by working in private sector jobs, but it takes 25 years to get forgiven if you take that route, and it comes with adverse tax consequences too.
  10. Tim.

    Tim. SF Emoti-King

    Thanks for all the help.

    It sounds like I need to do the exact opposite of what I have been doing, which is kind of digging my head in the sand. Can't say that's really a surprise.

    For some of the questions:
    -I really don't have any major assets
    -I think between 50-80% of my loans are federal perkins or stafford loans. With some of my later loans that went through the school, I'm not sure off the top of my head if that was just a program for federal loans or through the school, so that's why the wide range.

    By the way, I'm really, really not planning or desiring anything that invovles me leaving the country. I also remember the discussion about jobs that discharge the federal student loans before I left school. I'll look into it again, but I don't think any thing on that list makes since for me.

    I think I need to spend more time making money as well as trying to get organized. Maybe a second job or something.

    Anyway, thanks for the advice and support. I'm sure I'll follow-up here as I go forward and get things squared away a bit.
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