I am getting calls from a collection firm inn PA in regards to a state workers insurance audit from '08 for about $35k and another separate audit from '10 for about $7,800. The collection firm has started to call me to collect on these audits. I no longer operate the construction business anymore due to housing crisis. I am turning 60 in a few days, have severe back issues to work long hours, have a home foreclosing ($600k mortgage), 2 car Repo's w/ deficiency balances, have nothing saved in the bank, wife demanding divorce, daughter that needs financial help, and close to $100k in student loan debt. I put student loan in forebearance, stopped paying my mortgage and living rent-free. I can't afford to pay these State Workers payments, will I just keep getting collection calls? Thoughts pls
I think you need to speak to a bankruptcy attorney to see whether a bankruptcy makes sense for you. Student loans may or may not be dischargeable, but even if they are not, it will get rid of most of the other debt.
I am not sure about the dischargeability of state worker's insurance. I know things like fines and penalties may not be. Also, certain tax debts may or may not be dischargeable. And if this is for funds owed to a state agency, they have tools at their disposal that ordinary creditors do not have in that they can intercept state/federal tax refunds and may even be able to garnish Social Security or disability. To prevent that, you should file bankruptcy if the debt is dischargeable.
Many bankruptcy attorneys give free consults. What I would do is educate yourself about the process and see whether you can file a chapter 7 based on your reduced income. Also, find out whether all or most of your debts are dischargeable. As for your house, living rent free is good. Bankruptcy will stop any foreclosure which will resume once you get out of bankruptcy unless the lender seeks to lift the automatic stay. However, bankruptcy will prevent the lender from coming after you for any deficiency.
I agree with my colleague that the state has enforcement mechanisms not available to other creditors. Therefore, you should try to address the issue. Just based upon the information you provided, the worker's compensation debt may be dischargeable in bankruptcy. You would benefit from discussing the matter with a bankruptcy attorney.
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