I have three different credit card debts. It totals about $6000. Currently, I receive social security income which is $889. I barely have work experience and I still go to school. I have tried to find a job and no one seems to want to hire me. Is there any classes you recommend on money management or credit counseling? I need it.
Sorry to say, with what little income you have, no amount of counseling is going to help. You simply can't pay what you don't have. On the other hand, filing bankruptcy over $6,000 is like shooting a fly with an elephant gun. It is too early to go that route. The other reason is that if you file a Chapter 7 bankruptcy, you are shooting your one "magic bullet" and you will not get that ability to file a new Chapter 7 straight bankruptcy for 8 years.
Right now, you are what is called "judgment proof" meaning you cannot be forced to pay anything due to the small amount of income and because it is Social Security.
Take a deep breath and relax. The world is not going to end if you cannot pay the debt right now. I know that is hard to do but you need to. When you get contacted by the creditor simply tell them that the only income you have right now is Social Security which you need for luxuries like... of for instance food, clothes, rent, utilities. They know that at this time they are not going to get a cent from you.
Even if the creditor were to sue you and get a judgment, as I tell my clients, that Judgment plus $2.95 + tax and tip will get them a cup of coffee at IHOP or Dennys.
If and when you get more income you can try to get them to settle for less or often let you pay reasonable payments.
Happy new year.
This response does not constitute legal advice nor is the attorney providing this advice in any way liable for the providing of this information. It is provided for general information only. No attorney client relationship in made by the answering of this question. Any reader of this response is recommended to seek the advice of a competent attorney in your area.
Only attorneys are licensed to practice law. To properly answer your questions and address your concerns, the best way to handle this is with an in person consultation with an experienced Bankruptcy attorney. Use AVVO's Find a Lawyer tool to select a qualified attorney. You need to retain an attorney. If you can't afford an attorney you need to contact legal services and the local law school legal clinics. Good luck.
If you found this Answer helpful, please mark it as "Best Answer" Please be advised that the answer above is only general in nature cannot be construed as legal advice, given that not enough facts are known. It is your responsibility to retain a lawyer to analyze the facts specific to your particular situation in order to give you specific advice. Specific answers will require cognizance of all pertinent facts about your case. Any answers offered on Avvo are of a general nature only, and are not meant to create an attorney-client relationship.
You don't need bankruptcy, which helps people with serious debt problems. Unless you own some valuable property, you may be invincible even if your creditors obtain a court judgment against you. If you want credit education, a local nonprofit credit counseling service would be happy to meet with you or sign you up for classes. Nonprofit does not mean it is fire, so expect to pay.
I doubt a paralegal would ever say 'you don't need my services,' but a paralegal can only by law type papers as you instruct. Not give you any advice. Most bankruptcy attorneys will tell you why you don't need to file and will refuse your money. Hope this perspective helps.
If you file BK thru a lawyer or any other helper, you have to take two financial management courses: one before filing and one after filing. However, if your total debt is only$6K, and your income is based on SS, you may be judgment proof, meaning that even if you are sued by your creditors and have judgments against you, the judgments will probably be uncollectible. Consult with a BK lawyer in your area. Some offer a free consultation. Good luck to you.
You are not my client and I am not your attorney. This advice is given in the spirit of the AVVO platform and is based on general legal principles. You become a client when you enter into a formal retainer agreement with me.
The decision to file bankruptcy is a serious decision that will have a great influence on your life. I highly suggest you speak with a professional and discuss your options. They will have access to credit counseling courses that you can take as well.
Its tough to say whether you should make such a large decision based on the quick facts provided. What are your expenses? Do you own a house, rent, car payments, insurance payments, food, disposable income? Every expense should be compared against your income when making the decision.
Most attorneys will provide a free consultation for bankruptcy. Paralegals will likely provide a free consultation as well, but they're not permitted to provide legal advice.
Disclaimer of California Attorney. Laws differ from state to state. Although the above response is believed to be accurate, it should not be relied upon as any type of legal advice because the information provided is incomplete. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. No attorney client relation is formed with me without a written contract. Trevor E. Carson, Attorney-At-Law 900 Howe Ave Suite 230 Sacramento, CA 95825 http://www.carsonkyung.com Office (916) 241-3336
For now, it sounds as if you may not have to file Bankruptcy. Your debt is relatively low, though it seems a lot higher considering your limited income. Here is what I sometimes advise my clients. if they own nothing, and do not believe they will ever own anything of significant value, then they are currently "judgment-proof". That term is used for folks who have nothing to be taken from them following a lawsuit. Let's say you find yourself sued by somebody. If you do not fight the suit, you will lose by "default". At that point, the judgment creditor (the one that sued you and won the default judgment) will try to determine whether they can collect anything from you. They will try to determine if you are working to garnish your wages. You are not, and they are not permitted to garnish your Social Security. Then they will try to determine if you have a bank account that they can levy money from. Your Social Security is probably directly deposited into a bank account. The creditor cannot use his judgment to levy a direct-deposit Social Security bank account unless it consists of mixed funds (something other than Social Security) in an amount greater than $2,425, and he can only take the excess amount above $2,425. If you can demonstrate that every dollar in a bank account was directly deposited by Social Security, the entire amount is exempt, but only to the extent that you can prove that all the funds are exempt because all the funds were directly-deposited Social Security funds. So, if you open a new checking account with a $0 balance (The Golden 1 Credit Union will let you do this if you open a separate share (savings) account with $1.00), then have the U.S. Treasury deposit your funds into that account. The first dollar deposited, and every other dollar in that account will be only Social Security, and as long as you do not deposit any other types of funds, your entire ACCOUNT is exempt, because you can prove that it consists of only directly-deposited Social Security income. It does not matter how much it grows, if you are so blessed to let it grow. It is entirely exempt from collections by levy. Just keep it purely Social Security. If you wish to deposit other monies (like a paycheck or rebate or refund), either deposit it in your savings account, or in a different checking account. You can spend your Social Security money on whatever you wish...just do not add any other kinds of funds to that account!
With regard to assets, be sure you have nothing and that you have no right to anything of value. A car is safe if it is $2,900 or less in value. You can have up to $175,000 of exempt equity in a home. Your wages, when you find work, are exempt for 75% of your net pay. The creditor can garnish 25% of net pay.
With regards to how much you owe, many people underestimate how much they actually owe. If it really is only $6,000, save filing a bankruptcy for something that is devastating, like a car accident or major medical bills for you or a child. I do recommend a consultation with a competent, experienced Bankruptcy attorney, but keep your mind open to not filing at all.
Finally, the best part is there is an excellent source for money management called "Dave Ramsey's Financial Peace University", at www.daveramsey.com. He is an excellent, entertaining teacher who will give you all sorts of ideas, direction and inspiration. Look up his talk show on the local radio. It is good! The company may give discounts or scholarships if your income is low. The entire staff at that place is excellent and friendly. Please check that out. God Bless your New Year and your future!
Please understand that my answer assumes certain things that may not be true. You should seek competent counsel to get the full story and to adjust your exemptions expertly. I cannot be certain that my answer is correct, and neither should you. I ask many questions of my clients before I render a final opinion, so this answer is merely a general guideline to follow. Please seek competent counsel to help you!
My colleagues have provided great information to you regarding your situation. In addition, several bankruptcy attorneys, like myself, offer assistance with understanding budgeting and managing money for little cost and assistance in how to deal with creditors. Once you are on your feet again, this information will be critical to your future success. You might also check with your local bankruptcy clerk's office to see if there is a public law center that provides no cost or very low cost assistance that might be able to answer more of your questions.
I agree with my colleagues that filing right now probably isn't your best option. There is a saying that "bankruptcy is for winners, not losers". Right now you are probably judgment proof and are at very little risk of your creditors going after you. While you are trying to get on your feet, you may incur additional debt. Once you are back on your feet and are looking at a brighter future, that may be the time to file and put all the financial damage behind you... Lastly, I wouldn't file for just $6000 of debt. that is very low.
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