Fearful and having anxiety re: debt

[FrugalChick]

Due to suddenly being unable to pay the majority of my bills, I now find myself afraid to answer my own phone. I've actually turned my ringer off just due to the sheer amount of calls I get per day (10-20). This causes so much anxiety that I have considered changing my number---though I've had this number for over 10 years and fear a loved one I haven't heard from in years may try to contact me eventually.

I had a couple of creditors from payday loan companies call and threaten me with fraud, jail, etc. I always planned to repay the money borrowed within a couple of months--when I was healthier and working more. I hadnt had any late payment in years and never had to use a pay day loan or go without washing clothes due to lack of money.

I tried to talk to creditors, some are nice, some have threatened me----these are the ones that made me turn off my ringer.

I will need to save up money for about 6 months to afford filing bankruptcy---but have a few questions:

Would bankruptcy prevent getting federal loans for college?

Can I opt to no file for bankruptcy and just leave the debt on my credit report until it gets too old?

My current goal to reduce the anxiety is to focus on necessities and saving $$ for emergency savings.

Before these problems, my credit score was about 565 due to volume of debt and accounts not being old enough.

[jpg7n16]

Please see the following government site about illegal collection practices:

Debt Collection FAQs: A Guide for Consumers

Specifically under federal law:

From: Debt Collection FAQs: A Guide for Consumers


What practices are off limits for debt collectors?

Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:

• use threats of violence or harm;
• publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
• use obscene or profane language; or
• repeatedly use the phone to annoy someone

False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:

• falsely claim that they are attorneys or government representatives;
• falsely claim that you have committed a crime;
• falsely represent that they operate or work for a credit reporting company;
• misrepresent the amount you owe;
• indicate that papers they send you are legal forms if they aren’t; or
• indicate that papers they send to you aren’t legal forms if they are.

Debt collectors also are prohibited from saying that:

• you will be arrested if you don’t pay your debt;
• they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
• legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action

--------------------------------

Do I have any recourse if I think a debt collector has violated the law?

You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.

Under federal law, the companies contacting you are behaving illegally. There is info on the site about what to do if companies do so. Who to contact, how to file a complaint and so forth.

I would also recommend taping the phone conversations, and documenting both time of call, name of rep and any threats made against you. You will likely be able to sue them for damages if you do.

Yes you owe money, and yes you should repay it, but it is illegal to treat you this way about your debts.

[FrugalChick]

Thank you.

I know it may not sound real, but I really do want to repay this. I often find myself crunching the numbers again and again, but right now it doesn't look possible. I feel like in a couple of months I will be in a better position, but a lot of the collector's don't (and rightly so) want to hear my request for a delay.

I am trying to not let the stress get too much...it is hard because right now I am worried that this debt will prevent me from being able to be a mom (too broke to be a mom or get married) or from going back to school and getting an advanced degree, etc. I know that may be an irrational way to think, especially since I came from a very poor background, but right now, I'm just feeling a bit despondent.

[vitalogist]

Due to suddenly being unable to pay the majority of my bills, I now find myself afraid to answer my own phone. I've actually turned my ringer off just due to the sheer amount of calls I get per day (10-20). This causes so much anxiety that I have considered changing my number---though I've had this number for over 10 years and fear a loved one I haven't heard from in years may try to contact me eventually.

I had a couple of creditors from payday loan companies call and threaten me with fraud, jail, etc. I always planned to repay the money borrowed within a couple of months--when I was healthier and working more. I hadnt had any late payment in years and never had to use a pay day loan or go without washing clothes due to lack of money.

I tried to talk to creditors, some are nice, some have threatened me----these are the ones that made me turn off my ringer.

I will need to save up money for about 6 months to afford filing bankruptcy---but have a few questions:

Would bankruptcy prevent getting federal loans for college?

Can I opt to no file for bankruptcy and just leave the debt on my credit report until it gets too old?

My current goal to reduce the anxiety is to focus on necessities and saving $$ for emergency savings.

Before these problems, my credit score was about 565 due to volume of debt and accounts not being old enough.

I don't think bankruptcy can prevent getting you federal loans for college. You might want to look at Chapter 7.

[jpg7n16]

I will need to save up money for about 6 months to afford filing bankruptcy---but have a few questions:

Would bankruptcy prevent getting federal loans for college?

I'd recommend reading this web page.

FinAid | Answering Your Questions | Bankruptcy and Financial Aid

"Generally speaking, a bankruptcy should have no impact on eligibility for federal student aid... Private loans are an entirely different matter. Because of the many different types of bankruptcies, this is a very complex issue."

However you should be aware that filing bankruptcy may prevent you from getting certain jobs.

Can I opt to no file for bankruptcy and just leave the debt on my credit report until it gets too old?

Of course you can, though I'd recommend working to change your budget and get them paid off so that it doesn't come to that.

My current goal to reduce the anxiety is to focus on necessities and saving $$ for emergency savings.

Well a main source of your anxiety is from collection agencies engaging in illegal behaviors. So fix that when you can and get help from the gov to do so.

The other source of anxiety is a lack of excess in your budget at the end of the month. Here, you'll need to make some real changes to how youre doing things. But just think, how would your stress level change if you had an extra $500-1500/month left over to make some real progress on these debts?

There are a number of things you can do to help make that a reality. And we can help.

Before these problems, my credit score was about 565 due to volume of debt and accounts not being old enough.

Don't worry about your credit score. Worry about getting back to a healthy financial position. As you do that, your score will naturally improve.

A good credit score is a natural byproduct of a healthy financial picture and a responsible use of credit.

[FrugalChick]

Thank you so much for all of the good advice.

I'm worried about filing for bankruptcy because of how it could impact future jobs, etc.

I do want to repay my debt, so far the amount I can pay initially is too little for some of my creditors, etc.

I have a repayment plan with a payday loan company, but due to being ill and having a paycheck lower than normal, I won't be able to make the next payment on time.

There is so much debt, I'm not sure who should get paid first? Payday loan companies or regular credit cards?

So far I'm paying my rent, car payment, car insurance, gas, tolls, light & gas, food, cell, home Internet (necessary), toiletries and household necessities, medical stuff. I'm trying to get some things on my car fixed, pay some parking fines from when I was sick, and save up enough for at least 3 months. because of the pressure and stress at work, and because I feel I don't have many people in my life who would let me sleep on their couch, the anxiety around money has left me bedridden at times. I don't know how my parents were able to be do strong during times like this.

I'm even worried that my current financial problems will make me never be able to have kids. I know that might be irrational, but it's one of my main dreams/wants in my life. I would hate myself if I ruined my chances of having kids because I had to file bankruptcy. :/