How do I inform Creditors (attorney threat now) that I am on SSDI (collection proof?)

[JJDog]

Just wondering, because I can't afford to even file right now, how to inform my CC company that I am 'collection proof'? I have a $2500.00 car that needs a clutch, which I can't afford), and I get about $680 SSDI all combined.

Says: on April 30th account will be forwarded to attorney to obtain judgement against you". This is on a $3500.00 account. Others have not been so snappy (5 months now no payments)

I've actually read the credit report, they are really willing to work with you if you can't afford it, and dropping interest rates, etc. But $680.00 a month is kinda tight.

[justbroke]

A creditor really does not care if you are collection proof. (Others may say differently, but you must look at it from a business angle; through the eyes of the creditor.) First, they can just flat sell the debt. In fact, most creditors just sell the debt and charge it off (their books) as a loss.

The new "junk" debt buyer, or JDB as we call them, will then pursue legal means to collect. They probably purchased the debt for pennies on the dollars. By pennies, I mean less than $0.10 on the dollar! They can then employ collection tactics including dunning and even use legal resources (such as a lawsuit). Even if you are "collect proof" the creditor may still pursue and obtain a "judgment lien". In most States, a judgment lasts for 10 years and can even been renewed for another 10 years. That gives the JDB 20 years to collect. They may even resell the junk debt and could make a profit or break even!

So, telling a creditor, to whom you owe money, that you are collection proof, carries no more weight than telling the creditor that you are going to file bankruptcy or hire an attorney. Unless and until those things happen, the creditor is likely to continue to pursue the debt. In fact, most creditors (and especially JDBs) have various computer algorithms which look at you from a total viewpoint on whether they are likely to collect. Depending on what they find, assets, cars, etc, they can decide to continue the pursuit in earnest, or back off. They may even just resell the debt to a less aggressive collector who likes to sit and wait.

Remember, the statute of limitations (SOL) is running as well. The smart collectors will realize this and obtain a judgment regardless of collect-ability. That secures at least a 10 year window to continue pursuing the debt, with most States allowing a renewal of the judgment for an additional 10 years.

If you have a number of creditors in serious delinquency I do not understand why you would take a chance and not file bankruptcy? If you are truly non-collectable, and I can't determine that, then you may be able to sit around and watch as the judgments come in. However, I see that you have a vehicle, and unless your State has the means to exempt the vehicle, that is one asset that they may be able to attach.

[JJDog]

The vehicle exemption is for about $3000.00 - $6000.00 for disabled, so I am clear, I just need the time to save the $$ to file, even though its only $250 or so. So yea, I guess its time to file before it goes to the attorney. Thanks