Relief from Debt Collections
by: MLSC Pohnpei
Relief from Debt Collections
What can I do if I don't have enough money to pay all I owe?
- First, pay for what is most necessary for your family. Food, clothing, shelter and utilities.
- Rent payments usually come next, along with paying enough to make sure your gas, electricity, and water are not shut off.
- Next, pay your car payments for a car you need, especially for work.
- After that, if you have enough money, pay your loans for furniture or other household goods.
- If you have money after paying for these things you need, pay on credit card debts, unsecured accounts and medical bills.
Shouldn't I pay someone who threatens to sue me?
- Do not let harassment or threats from creditors make you pay low priority debts before more important debts.
- Do not worry about threats to bring a lawsuit to take your household goods or garnish your wages unless you are positive that the creditor will file suit. If you cannot afford to pay that creditor the court will not force you to pay that creditor -but the court will look very closely at your income and assets and expenses and possibly other liabilities.
- You may want to explain to your creditors why you cannot pay debts now and say when you will be able to pay them.
- If the creditors or collectors are rude, you are not required to talk with them at all.
- You cannot be put in jail for not paying your debts
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What can the creditor do if I cannot pay?
- If you have used some of your property as collateral (a secured debt), the creditor can try to take it.
- If the collateral is furniture or household goods, the creditor cannot come into your house without your permission.
- A creditor can take you to court (sue you) to try to get you to pay the debt. If you answer, you get a trial. Court can be complicated, so it is very important that you call a lawyer right away if you get court papers.
- A creditor can try to take your wages or property only after getting a judgment and then waiting at least another 14 days.
- What if my bill is turned over to a debt collector?
The only bill collectors on Pohnpei as of 2006 are lawyers and paralegals.
If you are contacted by one of these you should seek legal advice unless you can handle the negotiations by yourself without danger.
What else can I do?
- You can call your creditors to see if they will work out reasonable repayment plans. Be realistic. It does no good to agree to pay amounts you cannot afford.
- You may want to call a non-profit consumer credit counseling service. They may be able to help you work out a repayment plan.
- As a last resort, you may want to consider filing for bankruptcy. Filing bankruptcy will quickly stop all debt collection efforts of any kind, at least temporarily. If you are thinking about bankruptcy, call a lawyer to find out about your rights and responsibilities.
- Finally, you may not need to pay anything. If you have little property and little or no wages, you may be judgment-proof.
- No one can make you use your Social Security payments to pay a debt.
- If your Social Security is deposited directly into a bank account, make sure no other money goes into the account and make sure your bank knows that all the money is exempt.
- You can protect some of your personal property from execution. Call a lawyer about whether your property is protected.
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