AdvancingSmartly

Enormous medical bills and the undisciplined use of easily available credit results in many people becoming debt-ridden.  If you have substantial debt but little in the way of assets and funds, you probably are not vulnerable to collection because there is nothing a creditor can get from you.  Under federal law, your Social Security benefit and pension are protected from being taken from you by garnishment.  (Note: If these benefits are deposited directly into your bank account they are at risk of being taken; if you are sued, or if a judgment has been rendered against you, it is best to have your checks sent directly to you and keep as little as possible in the account.)  If you have some assets, or simply want a halt to harassment by your creditors, you may want to consider bankruptcy.  Because it can be complicated, and involves a specialized area of the law, it’s best to see a bankruptcy lawyer to assist you.

Here are a few common sense suggestions to help you deal with bill collectors:

• If you owe a bill, rather than ignore it, it is usually better to write the collector (with a copy to the creditor) a letter explaining your situation and why you are unable to pay, emphasizing your circumstances (e.g. meager income; other, more important requirements such as medicine; etc.).  Tell the collector that you will do what you can, and keep a copy of the letter for your records.

 

• If you feel that you don’t owe the bill, it’s just as important to write the collector a letter, stating your position.  Again, it’s advisable to emphasize any reasons you are unable to pay, if this is also the case.  Whether you owe the bill or not, you can request that the collector stop contacting you.

• Avoid talking with bill collectors on the phone.  Use an answering machine, refer them to the letter you wrote them or tell them that you do not want to discuss the matter and hang up.

 

• Be aware that there are protections against creditor harassment under state and federal law.  Both laws contain lengthy lists of specific prohibited acts, e.g. calling you after 9 pm in the evening, making physical threats, using obscene language, etc.  If you feel that you are being harassed, you need to begin documenting what the bill collector is doing.  Make notes of dates, times of day, and what was said and see a lawyer.  The laws allow you to recover damages as well as reasonable attorney fees.

• Know also that if a creditor threatens to report the debt to a credit reporting organization, you have the right, under federal law, to write up and file a response, in 100 words or less, explaining the reasons why you dispute the bill.  You may need to contact your local credit reporting agency or the three national credit reporting firms; this way anyone reviewing your credit record at least gets to hear your side of the story.  The national reporting companies are:

 

Equifax        (800) 685-1111

Transunion  (800) 888-4213

Experian      (888) 397-3742

If you are being hounded by a bill collector (instead of the creditor) you can send the collector a “cease” letter demanding that they stop contacting you.  If the collector continues, and you have proof, you may be able to recover damages in a lawsuit against them. 

 

Many older women, upon the death of their husband, find themselves being hounded by his creditors.  The debts often result from unpaid credit card accounts or medical bills in connection with a last illness.  Bill collectors sometimes pressure the surviving spouse into payment of these debts, occasionally misrepresenting the law.  In May of 1998, the Michigan Supreme Court overruled existing case law which had provided that spouses were liable for certain kinds of debts, specifically necessities, (food, clothing, shelter, and medical treatment).  In this important decision, the Court held that neither a husband nor a wife is liable, absent express agreement, for necessities supplied to the other or for any of the debts of the other.  Thus, if the surviving spouse is not a party to the credit card agreement, or didn’t agree in writing to pay the medical bills, then that spouse is not liable for the other’s debts.  If a creditor tries coaxing you into signing a promise to pay the debts of your deceased spouse, don’t do it because you have no legal liability for those debts.

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