For many senior citizens in Contra Costa County, living on a fixed income can become unmanageable.  Unexpected medical bills, prescription drugs, and the never-ending increases in the cost of living can stretch a budget to the brink.  Hard choices slowly become the norm.  It’s a modern tragedy to hear that some seniors elect not to purchase prescription medicine in order to pay other debts.  Amidst the turmoil are questions with real answers and meaningful help.

What happens if I just stop paying my credit cards? 

Generally, credit card companies will wait about 30 days from when a payment was due before they send a follow up letter informing you that you’re delinquent.  As the bill gets further and further behind you will receive harsher, more demanding letters as well as phone calls.  Usually after several months the debt is sold to a collection agency and the calls and letters continue.  Eventually, the credit card company or collection agency can file a lawsuit.  The goal of a lawsuit is to give the credit card company the ability to put a lien against your house or garnish your wages or both.   Note: a judgment does not allow a credit card company to force the sale of your home.

If a bill collector calls what do I say?

Many honest people try to explain their situation when they receive a collection call.  If you try that, you’ll soon see that most debt collectors are not interested in your situation.  Typically, debt collectors are paid a percentage of what they collect from people, and for that reason they will limit the discussion to what you will pay and when.  After a few calls you’ll realize there is no point in talking to them, but the calls will keep coming.  The Fair Debt Collection Practices Act (FDCPA) and the California Civil Code create limits on what debt collectors can do.  Debt collectors are prohibited from calling before 8:00 am or after 9:00 pm.  The law also prohibits “harassment.”  Unfortunately the FDCPA and the Civil Code are routinely ignored by bill collectors.  The law gives you the right to sue a bill collector if your rights are being violated.  The debt collection industry relies on people being unable or unwilling to actually file suit against a bill collector.  The Federal Trade Commission has jurisdiction to enforce FDCPA but only deals with a small fraction of the known abuses.

If I die will my kids inherit my debts?

This is a very common misconception, and one that an unscrupulous debt collector may offer as fact.  Generally, a person’s assets are used to satisfy their debts before there is any inheritance.   In most cases, creditors are only allowed to seek payment from the deceased person’s assets.  In some circumstances a surviving spouse can take personal responsibility for all assets and debts of the deceased.

Can they take my Social Security?

Finally some good news.  Federal law protects Social Security from the reach of most non-governmental creditors.  That means credit cards, medical bills and collection agencies will not be able to take your Social Security even if they have filed a lawsuit and obtained a judgment.  Even better, the protection is automatic so you do not need to complete any forms or go to court.

Is Bankruptcy the solution?

Usually.  The bankruptcy laws are the laws society provides to allow a person to have most debts forgiven.  Bankruptcy can wipe out credit cards, medical bills, and collection agency bills.  After bankruptcy the calls, letters, and lawsuits all stop.  Bankruptcy does not forgive student loans, alimony, child support or crime.  Bankruptcy is a viable, long term solution for many people struggling with debts.

At the Law Office of Michael Primus we have helped thousands of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy.  If you live in Contra Costa County and have debt problems, contact us for a free in-office consultation.  We have offices in Walnut Creek, Antioch and Hercules.

Have you ever said, “I thought that was covered by my insurance?”  Most of us have had the rude surprise of getting a medical bill we thought was going to be paid by insurance.  Most simple medical procedures are easily understood and with a few questions and perhaps a couple phone calls the patient will understand what part of the bill, if any, he will be responsible for.  When it comes to complex surgeries, however, most patients, myself included, have little or no idea what was needed or what was actually done.  Often after a hospital stay the patient will receive bills from the hospital, several physicians, various labs and potentially others.  Typically medical or dental bills need to be submitted several times to an insurance company before being paid, or worse not being paid.  The process of bill submission sounds simple but with hundreds of procedures and hundreds of insurance plans, “Medical Billing” has become a legitimate field of study and even a career option.  That’s crazy, but I digress.

During this period of submission and resubmission process, the healthcare provider typically will have been paid for a part of the work with some unpaid balance remaining due.   As time passes, the bill can go to collections where the consumer/patient’s credit is damaged.  Yes, your credit can be damaged while you wait to see if your insurance is going to pay the bill.  If that sounds unfair, it is!  According to the Consumer Financial Protection Bureau medical debt makes up 52 percent of all collections accounts on credit reports so the problem is widespread.  To reduce the risk of medical debts damaging your credit you need to review your medical bills and follow up to make sure the bills are being properly submitted to your insurance.  You should also get a copy of your credit reports using www.annualcreditreport.com to verify the accuracy of what is being reported.

At the Law Office of Michael Primus we have helped hundreds of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy.  If you live in Contra Costa County and have debt problems, contact us for a free in-office consultation.  We have offices in Walnut Creek, Antioch and Hercules.