She is 88. Due to poor decision making and the rising costs of her everyday living expenses she got behind on rent and utilities while trying to make the minimum credit card payments. So she finally had to stop paying the cc payments and is starting to catch up on the rent and utilities. But of course the cc companies are threatening collections unless she comes up with hundreds to get caught up. These are all unsecured debts. Can they do anything to her since she only has Social security and no assets? What should she do?
I think we r going to see a lot more of this if prices continue to rise.
It's best if she tries to settle with them for a lesser amount. This way it's paid off. Her credit will be ruined for seven years, but at 88 I don't see how that would be such a problem.
Be warned though. Your mother will not have credit cards anymore. She will have to learn to live within her means and that could mean moving into low-income senior housing.
CC's are the very devil, yet a great way to build up your credit rating-but Mom doesn't need to be doing that. And she absolutely doesn't need them for anything at this stage of the game.
If you want to 'make good', then call the CC co's. Explain the situation, and make a plan to pay back what you can. CC's would rather have something than nothing. If you want to try to get out of paying completely--well, good luck. They cannot attach her 'income' as it is all SS based, so that's something.
Likely they'll give you some grief and then have to write it off as a bad debt, It will ruin mom's credit history, but she doesn't need to worry about that at this date.
And don't let her have any more CC's! Mom was so faithful in paying off her bills monthly, I am glad she was frugal and the $$ she gave to sketchy charities was minimal.
The credit card company will settle with her for a lump sum and it will be far less than what she actually owes.
It's shocking to me that a person would behave like this. Run up credit cards and just default on them. Being elderly is no excuse.
Can Social Security Be Garnished? (aarp.org)
They can not touch SS check. Do not pay, they will likely get a judgement, but that judgement will be unenforceable. Do not have her pay 1 cent, her credit is ruined anyway, and she will need her money to pay for her living expenses.
I guess the best thing to do is wait on a judgement and say she is on SS with no other means of support.
My GFs daughter teaches a daily living course to teens. I told her she needs to cover how a credit card works. Me, I only charge what I can pay off monthly. Its more for convenience. If you run a total, most Credit cards do finance charges before they take off the payment. If your late, an extra charge. In an amount owed like 10k, Moms minimum payment is not even covering the principle just interest. You have to pay more than what is owed to make a difference and you have to stop charging. This is how you get into this kind of debt because you don't know how it all works,
If collection agencies call, tell them not to call anymore. By law they're supposed to stop once you've told them, so keep a log of times and dates every time someone calls and the date and time you told them to stop.