Paralyzed and in debt, is my Social security safe?

[ziggy67]

Hello and thanks much in advance to anyone that is nice enough to respond

I was paralyzed about 18 years ago and have been on Social Security Disability since. I got a Citibank card right before my injury with a 1000 dollar credit limit that rose all the way to a 25,000 dollar limit since i always paid on time over all these years. I now owe nearly 20,000 on it and about 4,000 on a Bank of America card. About half the money has been medical expenses and the rest to get by when my SS check ran out. As my minimum payments on the card have reached nearly 400 a month, it's eating up nearly half my SS check so i end up having to use the credit cards more, it's a vicious cycle.

I was going to hire a bankruptcy lawyer and was told they cost around 1100-1500 dollars, my mom said she'd give me the money. My neighbor is on disability also though and was talking to him. He said he was in a similar situation 4 years ago and he said he simply just stopped paying on his cards because he couldn't afford a lawyer and the card companies bugged him for awhile, but eventually stopped and he never heard from them again. So i had a few questions

1. If i filed bankruptcy, my social security can't be touched right?

2. If instead i just stopped paying on the cards, could the card companies even do anything to me given i have zero assets? I have no home. I can't drive and thus have no car. The most expensive thing i own is a 700 dollar TV. I get 1,000 a month in social security and 100 a month in disability check from my last employer.

3. If it's best to file bankruptcy, could i take out a 1500 dollar cash advance to pay the lawyer without getting in trouble so i don't have to burden my mother for it since she recently lost her job?

Thanks again if anyone responds.

[MSbklawyer]

So i had a few questions

1. If i filed bankruptcy, my social security can't be touched right?

Even if you don't file for bankruptcy, your social security can't be touched. The only exceptions are for certain debts to the government. One caveat though, if you put money in the bank, judgment creditors don't know whether it's social security or something else; Nor does your banker. The funds can get snagged and it's a bear to get them back.

2. If instead i just stopped paying on the cards, could the card companies even do anything to me given i have zero assets? I have no home. I can't drive and thus have no car. The most expensive thing i own is a 700 dollar TV. I get 1,000 a month in social security and 100 a month in disability check from my last employer.

They may bug the $hit out of you, threaten to "turn you over to legal" (they like that one because it really does scare a lot of people). But if things are as you say they are, you are the proverbial 'turnip'.

3. If it's best to file bankruptcy, could i take out a 1500 dollar cash advance to pay the lawyer without getting in trouble so i don't have to burden my mother for it since she recently lost her job?

Yes, you could get a cash advance to pay for your lawyer, but that debt won't be dischargeable. I don't recommend this though. It puts you lawyer in an ethical dilema.

Thanks again if anyone responds.

You can thank me when you get my bill. PM me the address to mail it. ;)

[WhatMoney]

2. If instead i just stopped paying on the cards, could the card companies even do anything to me given i have zero assets? I have no home. I can't drive and thus have no car. The most expensive thing i own is a 700 dollar TV. I get 1,000 a month in social security and 100 a month in disability check from my last employer.

You are pretty much collection proof. Your state exemptions should cover any property you own, and your SSDI and disablility check are exempt income.

You didn't say whether you have a checking account for deposit of your checks. You can protect yourself from an SS bank levy by having your SSDI deposited on the SS Direct Express debit card.

There are a few states that are finally passing laws that force a bank to recognize exempt funds deposited in a bank account. It reduces the likelyhood the bank will allow that account to be levied, when the bank has on file an affidavit that your account is exempt in their records, as required by state law. What is your state?

Most creditors, if informed of your financial status will not be interested in a lawsuit anyway, since they will get nothing. Bankruptcy seems an unnecessary expense in your situation.

(Unlike MSbklawyer, my advice is free, and worth every penny of it.)

[ziggy67]

Big thanks MSbklawyer for responding

I'm permanently paralyzed and highly likely won't ever be buying a home or car anytime soon unless someone gives me a bunch of money, so if my credit gets wrecked, it's not really going to hurt me. Obviously i won't be offered a credit card anytime soon, but even if eventually i was offered one, the limit will be very low given i'm on Social Security and paralyzed. As i said before, i only have a 25,000 limit on one card because i had it for over 15 years and always paid on time so they gradually would raise my credit limit.

So if you were in my position, would you borrow the 1000-1500 and file bankruptcy or just stop paying on the cards since i have nothing they can take from me? I just know that since my biggest card is being stopped at the end of this month after refusing to let them double my interest rate, i can't afford the 400 a month payments and still pay my bills/buy food if i can't use the card also.

BTW, i have a teenage daughter and long have had a savings account in her name and my name besides my checking account on so i could decide when she could take money out of her savings account. Whenever she gets say chunks of money for a birthday, it gets put in that account and it's at about 2000 dollars. She turned 18 in April but i'm not letting her have it unless it goes for something important. Could the credit card companies take her money since my name is also on the account? Could they also get the 100 a month i get from my old employer who had disability insurance because i've got the 100 each month since i got paralyzed?

[catleg]

I love the logic of banks increasing one's credit line from $1k to $25k based on good payments alone.

When my mother-in-law passed away she was getting $900 a month from social security and living in low-income housing (in Manhattan). I found out she had a $25k limit card from MBNA.

It's pretty shady to extend credit well beyond one's ability to pay, that's what makes it so easy to default on them with a clear conscience.

[ziggy67]

You are pretty much collection proof. Your state exemptions should cover any property you own, and your SSDI and disablility check are exempt income.

You didn't say whether you have a checking account for deposit of your checks. You can protect yourself from an SS bank levy by having your SSDI deposited on the SS Direct Express debit card.

There are a few states that are finally passing laws that force a bank to recognize exempt funds deposited in a bank account. It reduces the likelyhood the bank will allow that account to be levied, when the bank has on file an affidavit that your account is exempt in their records, as required by state law. What is your state?

Most creditors, if informed of your financial status will not be interested in a lawsuit anyway, since they will get nothing. Bankruptcy seems an unnecessary expense in your situation.

(Unlike MSbklawyer, my advice is free, and worth every penny of it.)

I'm in Wisconsin

I have a checking account where my SS check is direct deposited at 1,014 dollars a month. I also get a check in the mail for 100 a month from a disability policy my old employer had when i got hurt. I forget how they came up with 100 a month, but it's been that amount since getting paralyzed. Finally, i've also had for many years a savings account under my daughter's name where my name is on it also so i can decide when she can take money out. I've allowed her to when she went to prom and to buy a car for 700 dollars, i believe it has 1,900 dollars left in it. She turned 18 last month, would it be smart to take the money out and just give it to her since my name is on the account also?

What got this started is about 7-8 months ago Citibank sent a letter saying they were raising my interest rate from 9.99 percent to 18.99 percent. If i refused, my card would close when it expired at the end of this month. They wouldn't issue a new one. I refused and forgot my card was closing until a few weeks ago. Now i'm in a bind, a 400 a month payment, but won't be able to use the card. Between medical stuff, rent, heat, food, and everyday expenses, 1100 won't cover it if i pay the 400 a month for the cards and can't use them.

So if say i just stopped paying instead of filing bankruptcy and they start calling/sending threatening letters, should i respond and tell them the situation vs ignoring them? If Citibank did still file a lawsuit even though i have no assets, would i have to show up in court or not bother?

I was going to consult with a lawyer, but i assume he'd automatically steer me towards bankruptcy so he can get paid and like you said, maybe it's not worth it and just a waste of money. I know nothing about this stuff though so i'm worried about not doing something that gets me in trouble, but i really do have no assets to get confiscated so i can see your point that they may not want to bother with a lawsuit.

[tigergem]

I'm on SSDI too and I am just happy to have taken some finally positive direction to get out from under the mountain of debt I had. I was just fed up with all of that debt just sitting there unresolved. Yeah for a while it was cool enough that I was (mostly) collection proof, and for a while I was way too sick to deal with it anyway, so just being collection proof was good enough. But when I got to where I could actually think about it, I wanted it dealt with, so I filed.

[WhatMoney]

She turned 18 last month, would it be smart to take the money out and just give it to her since my name is on the account also?

That's up to you - she's 18, so I assume she has access to the money.
Any joint account can be seized if one of the account holders is the judgment debtor. So if your daughter wants her money entirely safe from your financial troubles it should be an account in her name only.

Now i'm in a bind, a 400 a month payment, but won't be able to use the card. Between medical stuff, rent, heat, food, and everyday expenses, 1100 won't cover it if i pay the 400 a month for the cards and can't use them.

Your and your family always come first. You have no reason to keep paying on the card if you cannot afford to.

So if say i just stopped paying instead of filing bankruptcy and they start calling/sending threatening letters, should i respond and tell them the situation vs ignoring them? If Citibank did still file a lawsuit even though i have no assets, would i have to show up in court or not bother?

You can send them a DV and a cease and desist letter and also explain why you have NO non-exempt assets if they choose to sue you. In your case you should be able to convince them they are wasting their time and money going after you for the debt in court.

If they did sue, other then reminding them how they are wasting their time and money, I'd do nothing, unless you decided to file CH.7 after they sued you and you needed to delay the judgment until you filed. Then you file an answer and you might delay it a few months - or not - depends on the court.

I was going to consult with a lawyer, but i assume he'd automatically steer me towards bankruptcy so he can get paid and like you said, maybe it's not worth it and just a waste of money. I know nothing about this stuff though so i'm worried about not doing something that gets me in trouble, but i really do have no assets to get confiscated so i can see your point that they may not want to bother with a lawsuit.

Any ETHICAL lawyer would tell you what I am telling you - there is no reason for you to file for bankruptcy. And any lawyer that allowed you to go further in debt to pay his fee, when he knows you do NOT need any asset protection definitely has ethical problems. You'll have to find a real scumball attorney to take your money, IMO.

The ONLY reason you may still file for BK is strictly emotional: you want to relieve the stress of having a debt. Yes, once you stop paying your CC they will call you all day and send a collection letter once a month. (But once a debt collector gets the C&D letter and they still call you, they are violating the law. And if you can prove it's them calling, you can get a $1000 bonus from the FDCPA laws.) There are many ways to handle phone calls so you never even hear them if its from a debt collector or OC.
And collection letters are simple - you file them in a folder and forget about them.

I'm in Wisconsin

You are lucky - Wisconsin is a debtor friendly state. They have just upgraded their judgment exemption allowances as well. Your SSDI is exempt. Your pension payment is exempt. Any property you have is very likely exempt, unless you have an original Rembrandt or Picasso on the wall.

In fact, ANY funds up to $5000 in a bank or credit union account is exempt from any collection efforts in WI. It doesn't matter what the source of the money is. It used to be $1000, but as of Dec. 3, 2009 the "depository exemption" was increased to $5000 - as long as the money is for your own use. If you were sued, received a judgment, and they attempted to seize your bank account without checking that it had over $5000 in it, the collector would be in trouble, and so might the bank. Worst case you file an exemption to stop any seizure. But since the law is so clear - that would be the time to hire a consumer attorney - to counter sue the collector for violation of Wisconsin's Depository Exemption law. My guess is most collectors are crossing WI off their easy target list about now. Just be glad you don't live in North Carolina.

See:
http://www.wisbar.org/AM/Template.cf...ONTENTID=88373
and
http://www.badgerlaw.net/Home/Public...mer/exemptions
and
http://www.legalconsumer.com/bankrup...law.php?&ST=WI

[ziggy67]

Wow WhatMoney, all i can say is thank you so very much for being kind enough to take your time to respond to my post multiple times in such detail and to look up those Wisconsin laws.

This whole situation has had me incredibly stressed the last few weeks. I've tried to not be all wasteful and spend crazy with my credit cards since i got paralyzed, but while Medicare covers many of the things i've needed for my paralysis, there have been a number of expensive things i've still had to pay for which i put on the card as my credit limit would get raised. I never bought a bunch of fancy stuff on credit over these 15 plus years, never say took a vacation on credit, or even took out one single cash advance until three weeks ago i took out 1000 to pay back a good friend who has helped me out financially over the years when needed. The only expensive thing i ever bought myself on credit in these 15 plus years is a 700 dollar plasma TV around two years ago. My Citibank card still has 5000 in credit left and i didn't go out spending to max it out before it closed at the end of this month.

So i've been thinking about filing bankruptcy over the last week or so. My cousin said to just take out a cash advance to pay the lawyer, but after reading stuff online the last few days, that could be deemed as fraud which it really is i guess and i certainly don't need that problem. I hated asking my mom if i could borrow the 1000-1500 for a lawyer because she is very worried she might be losing her job at any point since others around her have been laid off. I'd really prefer to not burden her anymore than i already have which made me go to google and i found this place.

One last question if you don't mind. I looked in the local yellow pages under bankruptcy lawyers and saw many offered free consultations. Do you think i should just call one or two with the advice you and MSbklawyer have given me? Or is that a waste because they'll either try to talk me into bankruptcy so they'll get paid the 1000-1500 or once they see i know this stuff you two offered, they'll make the conversation come to a quick end because they aren't in the business of offering free legal advice as to how best quit paying the cards which gets them no money?

[WhatMoney]

I still have no idea why you think you should file for bankruptcy, since you have no assets to protect. Bankruptcy is for wage, property, and financial asset protection. Everything you have is already protected. Are you expecting to win the lottery? Are you going back to work? An inheritance? Are you buying a new car? You do realize if you file for BK you will lose your credit card don't you? And your credit will be trashed with a BK just as with a default on your card.

Sure, talk to BK attorneys with a free consultation if you want. Be sure to explain that you already know you have NO non-exempt assets or wages, now or in the future, and the only way you could afford to pay him would be to borrow money from your mother, who can't afford it since she may lose her job. He will probably think you are a State AG plant trying to find unethical attorneys to disbar.

Most people who can't afford their BK attorney stop paying on all their credit cards, and use the extra money to save up to pay the attorney. So if you must file for no reason but "peace of mind", you should take the attorneys fee out of the extra $400 you no longer pay to the CC banks each month. You have NO reason to be in a hurry. It may take you 10 months to save up $1500 to file, during which you will not pay on your card and it will be canceled. It makes no difference whether you are sued while you are waiting to file, as they will get nothing from you. Once you are discharged you can have your attorney vacate the judgment, for more fees. So you may spend $1800 or more all for peace of mind. Your choice. I think you would be wasting your money. People who do this usually don't use exempt government benefits to pay an attorney. And free legal aid agencies will not help you because they know you have no valid reason to file.

[ziggy67]

I still have no idea why you think you should file for bankruptcy, since you have no assets to protect. Bankruptcy is for wage, property, and financial asset protection. Everything you have is already protected. Are you expecting to win the lottery? Are you going back to work? An inheritance? Are you buying a new car? You do realize if you file for BK you will lose your credit card don't you? And your credit will be trashed with a BK just as with a default on your card.

Sure, talk to BK attorneys with a free consultation if you want. Be sure to explain that you already know you have NO non-exempt assets or wages, now or in the future, and the only way you could afford to pay him would be to borrow money from your mother, who can't afford it since she may lose her job. He will probably think you are a State AG plant trying to find unethical attorneys to disbar.

That made me laugh

Ok you have me convinced. Thanks again and your advice is appreciated more than you can imagine because without it, i probably would have allowed a lawyer to tell me to file if i hadn't come here and thus wasted the money.