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SS income only. I Stopped paying OC. Now what?

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I have a credit card debt with Bank of America for approximately 14k. My rental property (2-family house) was recently purchased through a short sale and has left me with nothing, no more rental income, NO assets. My only income now is Social Security. I was paying the OC on-time every month, but can no longer pay them. Should I write a hardship letter telling them I can't pay? Even if they sue, they can't collect, right? What to do? :confused:

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If a creditor other than the federal government tries to garnish your Social Security benefits, inform them that such an action violates Section 207 of the Social Security Act (42 U.S.C. 407).

Section 207 bars garnishment of your benefits. It can also be used as a defense if your benefits are incorrectly garnished. Our responsibility for protecting benefits against garnishment, assignments and other legal processes usually ends when the beneficiary is paid. However, once paid, benefits continue to be protected under section 207 of Act as long as they are identifiable as Social Security benefits.

Edited by racecar
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First off, they will start to call you, alternating between threats of what can happen if you do not pay and offers for settlement. After about 3 - 6 months, the debt will probably be charged off and sold to a debt collector who will probably threaten you if you do not pay (and might break federal law in the process). After about 1 year, they will probably sue you. You can fight the lawsuit or let a judgement be granted be because at this point, you are what they call judgement proof. I would fight it just on general principle.

The time frames are relative. It depends on the OC and the JDB and what path they decide.

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Well if they DO sue you, as of January 1, 2009 thanks to a New York State law called the Exempt Income Protection Act, (EIPA), funds totalling under $2500, ($2,625 for people sued on or after April 1, 2012), in a bank account that receives electronic deposits such as social security or pension income are immune to unsecured debt collection; funds totalling under $1740 in ANY bank account are also immune to unsecured debt collection.xdancex

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