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AZ Collections Moore Law Group - but judgement proof?


scarab
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2 hours ago, WhoCares1000 said:

They might go to arbitration for that amount, it is hard to say. I would first make sure that arbitration is in the contract. If not, then that is not an option.

To answer your question, I do not expect M to pay on these account. Unfortunately, the decision to sue M is being made by computers and those who follow what the computer says rather than actually thinking because any thinking human being would realize that suing M would be a fruitless endeavor. I have been dealing with collectors for 12+ years now in regards to another person in a similar situation as M (although in her case, she used a couple of different names which suggests some fraud). She is in section 8 housing and only has SS for her income. Just now her judgements expired (In Minnesota, the creditor has to file a new case in order to renew a judgement) but I bet I still get the calls. They will never collect from this lady either.

My plan is to inform More (sic) Law Group of the risks they incur if they sue, along with the most likely result (nothing collected, even if they win a judgement).  I will write a letter.

Risks to them will be: I will hire a consumer attorney that I will pay for (they are aware we have used one) to look for FDCPA and FRCA violations, we will elect arbitration at a cost of $950 filing fees to them plus around $5k starting fees, and so on.

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2 hours ago, WhoCares1000 said: "

I know we get jaded on this board because we see more than our fair share of fraudsters and people who refuse to pay their bills not because they don't have the resources but because they don't want to. A few names come up instantly. However, most people do not go out with the intent to defraud the bank. I would put the percentage of applicants trying to commit fraud at about 5%. Also, based on the description of M, I doubt he could have pulled off such a fraud.

That said, M will be in his own personal hell from this. The constant calls, the constant financial disclosures, and even some of the "service process" fraudsters will call him, all looking for a payday. This does not absolve the responsibility of the bank to understand the risk they were taking. Let's say that the total credit extended was only $20K (or about 1/2 of what is owed). It still would have taken M more than his lifetime to pay that off with minimum payments and the banks certainly have M's birth date, even if they did not get an accurate picture of his income. The banks have access to more data on us than we would ever think. Due diligence would have told any bank to not extend more than $500 - $1000 in credit to M. Again, banks are using computers to make these decisions and no thinking person can intercede and ask what why we are doing that.

So is M responsible for what happened, yes. Is the bank responsible for what happened, yes. The bank made a gamble and although it does not happen too often, the house lost this time."

 

 

Thank you for this.

 

M did not intend to create this mess.  You are right, M does not have the where-with-all to pull off fraud, and is not within their character anyway.  I've kown M for over 40 years.

Like so many people who get caught in the debt trap (myself included, in a younger, dumber phase of my life), M fell into psychological trap of thinking he/she could just keep borrowing to pay prior credit.  The bamnks make this easy to do, and actively encourage it.

I can assure everyone here, though you may not believe me, that M did not do this intentionally.  As a matter of fact, when I first explained to M that they are likely to be sued, they thought that meant jail time.  Believe me, they have been freaking out now ever since defaulting, in spite of my asurrances that they will not go to jail.  Just the idea of being sued strikes terror into M.

I realize many people come to this forum for the purpose of defrauding banks, but at the same time, banks are VERY keen to give too much credit to Subprime borrowers.  You all recall MBS's and whatnot?  The banks have shown recently that they have forgotten all about the 2008 Subprome debacle, and they are at it again, though the form may be different.  History may not repeat exactly, but it often rhymes.

If it makes anyone feel any better, M is well in their 70's with completely destroyed credit.  M gets collection letters constantly and freaks out every time he/she gets one.  Given M's health history and ancestor health history, M will probably not live much past 80, so will never recover their credit from this. 

 

 

 

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3 minutes ago, scarab said:

I can assure everyone here, though you may not believe me, that M did not do this intentionally.

Let me be perfectly clear. I don't think for a second this started out as intentional fraud.

But let me also be clear that the bank is not at fault for where this person ended up. 

Every one of us here has fallen on hard times and had a mess to clean up - I do not pass judgment on that. I've helped people here get out of paying hundreds of thousands of $$$ in debt.  You will notice I didn't say a word here until someone first tried to shift the blame to the bank. That's when I don't hold my tongue. 

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I agree that M deserves blame.  At the same time, so does the bank.  They KYC (knew their customer), etc. 

A very long tim ago, I underwrote loans for Subprime consumers (not in real estate though), and we always looked at a consumer's ability to pay back our loan, and other loans they had.  We often reduced or denied the amount of credit they wanted.  It's up to lenders to lend responsibly.  Banks no longer don't want to do this.  Things have changed since I worked in that industry (2005).

I've seen reports on the Internet going back years, that banks are ok with high default rates because, overall, they make more money, especially since they got BK laws changed very much in their favor back in 2005.  With the current methods of collecting (i.e. file thousands of debtor suits, getting thousands of default judgements), they have gotten bolder.  Hedge funds and private investor groups have gotten into the junk debt game as well, during the past 15 years.

If you wonder about why the divide between the top 0.1% and the rest of us "unwashed masses) has been accelerating lately, it's because we haven't been trained to resist getting unproductive credit.  We have been brainwashed into buying crap we don't need that is counterproductive to our financial health.  We are financially sick, while the top 0.1% know better.

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1 hour ago, scarab said:

banks bear equal, if greater, responsibilty.

They bear responsibility for other things. Not debtors that don't pay their debts. The longer you look at these to things under the same microscope, the easier is it to swirl them into one thing, and justify one with the other.

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1 hour ago, Harry Seaward said:

Let me be perfectly clear. I don't think for a second this started out as intentional fraud.

But let me also be clear that the bank is not at fault for where this person ended up. 

Every one of us here has fallen on hard times and had a mess to clean up - I do not pass judgment on that. I've helped people here get out of paying hundreds of thousands of $$$ in debt.  You will notice I didn't say a word here until someone first tried to shift the blame to the bank. That's when I don't hold my tongue. 

So the bank is totally blameless in loaning money to a person who had no assets or attachable income? M does deserve some of the blame for accepting the loan but the bank also deserves part of the blame for making the loan. In the case of debt, it takes 2 to tango. M was certainly not forced to take the money the bank offered but the bank was not forced to offer M the money in the first place either.

I am fine with putting part of the blame on the debtor. I am not fine with not putting part of the blame on the creditor. Especially when there are at minimum, thousands of M's out there, many still making their payments and the banks making millions in profits off of them. That is why the banks do not change their procedures to make sure that they do not loan money to someone in a similar position to M. In fact, I would not be surprised if the bank made way more money off of M than what their real loss is going to be once this settles out.

M has a responsibility to pay back his debt and if he could, I would say that. The bank also has a responsibility to make sure they are not loaning out the shareholders moneys to people like M who will never be able to repay it.

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What you fail to mention is what was “m’s” situation when he opened the card? How long ago was this? You mentioned started really accruing debt 3-4 years ago, but were the accounts opened before that? I imagine ms situation at the time of opening the card was different than what it is now. It does take two to tango for cards or loans but the individual has to apply long gone are the days where cards are just sent unsolicited in the mail. It takes a proactive step from the customer. Did M reach out to the banks and update their income to $16k and the banks said let’s raise your credit limit?  I sympathize with M and definitely would stop paying my bills if I was on ssi only with no assets and that mountain of debt. But to blame a bank for someone using the card voluntarily and using the checks is not right. It actually is quite beneficial for M they did that, especially if m used it to survive. If the banks closed every credit card that posed a risk that would be a PR nightmare. Almost seems impossible for them to win. 

Anyways enough of my rant. Hope it works out for M. I think a more friendly toned letter to them will bear greater results.  It’s nice M has you there to help. 

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35 minutes ago, Debtguy393939 said:

What you fail to mention is what was “m’s” situation when he opened the card? How long ago was this? You mentioned started really accruing debt 3-4 years ago, but were the accounts opened before that? I imagine ms situation at the time of opening the card was different than what it is now. It does take two to tango for cards or loans but the individual has to apply long gone are the days where cards are just sent unsolicited in the mail. It takes a proactive step from the customer. Did M reach out to the banks and update their income to $16k and the banks said let’s raise your credit limit?  I sympathize with M and definitely would stop paying my bills if I was on ssi only with no assets and that mountain of debt. But to blame a bank for someone using the card voluntarily and using the checks is not right. It actually is quite beneficial for M they did that, especially if m used it to survive. If the banks closed every credit card that posed a risk that would be a PR nightmare. Almost seems impossible for them to win. 

Anyways enough of my rant. Hope it works out for M. I think a more friendly toned letter to them will bear greater results.  It’s nice M has you there to help. 

These credit cards were opened quite a while back, around 2010 or 2012 I believe.  I will check on that and report back here.  I am certain the cards were opened at least a year or two before M really racked up the debt.  Also, there are other cards/accounts in default with other lenders, but no one else  has hired attorneys.

M's income has been the same for the past 9 years: social security only.  I believe there have been some Cost of Living adjustments over time (not sure about that part), so 9 years ago, M got less from SS than today.

Before that, M got by from payments from a house sold in the late 70's or early 80's (seller financing, a deal another family member who is now dead, set up for M so that M would have some income).  That house was paid off around the time M qualified for SS. 

Note that the income from that house was less than the SS M receives now.

 M used to do some min wage work back before that, but it was sporadic, and not regular.  Please understand that M has some real emotional issues and refuses medication from psychiatrists.  I've tried in the past to help M with the emotional issues, but was unable to get anywhere.  M is a fairly dysfunctional person.  I may need to put M in an assisted care living facility sometime in the next couple of years.

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2 hours ago, WhoCares1000 said:

So the bank is totally blameless in loaning money to a person who had no assets or attachable income?

There are only two possibilities here. Either A.) M did not provide an accurate picture of their financial status when BoA opened this account for him/her, or B.) this account was opened during a time in M's life when he/she did have the means to repay, but then M's financial status changed and M continued to use the account after he/she no longer had the means to repay it. 

There is no way BoA opened a $33k line of credit for someone they knew had $16k/yr SS as their only income. It goes against every "for profit" business model known to man. 

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4 hours ago, scarab said:

They KYC (knew their customer), etc.

1 hour ago, scarab said:

M's income has been the same for the past 9 years: social security only. 

Please understand that M has some real emotional issues and refuses medication from psychiatrists. 

First one issue that everyone is over looking is that the credit card division of ANY bank and the checking/savings are two entirely separate divisions. Take a good look at any credit card application and it ask IF the consumer applying has a checking and savings account but does not get account numbers to verify balances.  Even if it does ask for a balance it is self reported by the consumer.  It also only asks the consumer to disclose annual income except for any that the consumer does not want considered for establishing credit limit purposes such as child support or disability.  

The ONLY creditor I have ever heard of requesting proof of income is AMEX.  Even then that is only when they suspect there is a potential fraud or that they have reason to believe the amount of credit the person is seeking exceeds their ability to pay.  No cards (including AMEX) that I have ever applied for have asked for poof of income.

That said if M truly has the emotional issues then my educated guess is that they very likely inflated their annual income to ensure that credit was granted.  In that case the bank is not the major offender the consumer is.  AND if M is truly that compromised then family should have stepped in YEARS ago to intervene before a situation like this could develop.  

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1 hour ago, Harry Seaward said:

There are only two possibilities here. Either A.) M did not provide an accurate picture of their financial status when BoA opened this account for him/her, or B.) this account was opened during a time in M's life when he/she did have the means to repay, but then M's financial status changed and M continued to use the account after he/she no longer had the means to repay it. 

There is no way BoA opened a $33k line of credit for someone they knew had $16k/yr SS as their only income. It goes against every "for profit" business model known to man. 

There's a lot more than 2 possibilities here.  One that I can think of right off the bat is that as long as M made payments great than the minimum - by using cash advances from the other 2 accounts or another credit card outside of these 3 accounts, in other words, rob Peter to pay Paul, then rob Paul to pay Mary, then rob Mary to pay Peter, ad nauseam, then the bank's automated systems would keep increasing the credit limits.  I've seen this with my own credit cards in the past - if I kept paying them down, they kept increasing my credit limits.

So, yes, banks can and will (and are very willing) to give credit to people far beyond what that debtor can pay back.   I'm not sure why this is news to anyone on this forum.  As I stated before, banks, in general, decided that its more profitable overall to keep extending more credit to consumers and increase the overall rates of defaults.

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40 minutes ago, Clydesmom said:
 

First one issue that everyone is over looking is that the credit card division of ANY bank and the checking/savings are two entirely separate divisions. Take a good look at any credit card application and it ask IF the consumer applying has a checking and savings account but does not get account numbers to verify balances.  Even if it does ask for a balance it is self reported by the consumer.  It also only asks the consumer to disclose annual income except for any that the consumer does not want considered for establishing credit limit purposes such as child support or disability.  

The ONLY creditor I have ever heard of requesting proof of income is AMEX.  Even then that is only when they suspect there is a potential fraud or that they have reason to believe the amount of credit the person is seeking exceeds their ability to pay.  No cards (including AMEX) that I have ever applied for have asked for poof of income.

That said if M truly has the emotional issues then my educated guess is that they very likely inflated their annual income to ensure that credit was granted.  In that case the bank is not the major offender the consumer is.  AND if M is truly that compromised then family should have stepped in YEARS ago to intervene before a situation like this could develop.  

I wish we could have stepped in years ago.  M absolutely flat-out refused to let me know their financial situation until they finally realized they were in way over their head.  This is why I spent a couple of hours yelling at M once they did let me know.  I finally had the true picture of M's situation. Until this point, I did not even know how much M got from Social Security.   You cannot force an adult to disclose stuff like this unless you can prove they are incompetent, incapacitated, or similar.  As for family, as I mentioned in my first post, M has no one else besides me.

I know M fairly well.  M is unlikely to exaggerate or lie about income.  The emotional issues I refer to are more about having huge amounts of anxiety dealing with people, such as in the work place or just dealing with people in general.  M is nearly a shut-in, and would rather avoid people altogether.    In essence, M is afraid of most people, and suffers from paranoia.  For example, M thinks his/her neighbors sneak into M's apartment when M is not home and steal stuff (I've never found this to be true). 

It has nothing to do with lying or fraud or similar.

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New info:  I just received another letter forwarded from M:  This letter is from Gurstel Law Firm out of Scottsdale AZ, and is a demand to collect on one of the other BofA debts.  $8 to 9K for this one.  So this explains why More Law Group is not asking about the other 2 credit cards.   It appears that BofA is using at least 2 (and my guess, 3) law firms.

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1 hour ago, scarab said:

by using cash advances from the other 2 accounts or another credit card outside of these 3 accounts, in other words, rob Peter to pay Paul, then rob Paul to pay Mary, then rob Mary to pay Peter, ad nauseam, then the bank's automated systems would keep increasing the credit limits.

Ok, again, there is no way BoA opened a $33k credit line on this person.  Your scenario (which is highly unlikely for a variety of reasons) doesn't controvert that.  All it does is make an even stronger case that the person got in over their head all by themselves.  A bank increasing a person's credit limit is no more the cause of the person using that limit beyond their means than a casino offering free drinks to lure customers in to gamble is the cause of a gambling addict loosing the family farm.  People have to know their own limits.

If it is in fact the case that M is incapable of knowing his/her own limits, this is not the fault of the bank.

1 hour ago, scarab said:

As I stated before, banks, in general, decided that its more profitable overall to keep extending more credit to consumers and increase the overall rates of defaults.

You stating it twice (or a hundred times) doesn't make it so.  If you've ever taken a business course, or used common sense, you know that you make more money lending to borrowers that repay the money than those that don't.  Now, of course banks make more money when they can charge interest which only happens if someone doesn't pay their credit cards in full every month, but that's not what we're talking about here.  You're claiming banks make more money when people default.  This is preposterous.

1 hour ago, scarab said:

You cannot force an adult to disclose stuff like this unless you can prove they are incompetent, incapacitated, or similar.

But somehow the bank was supposed to know and cut him/her off?  Then we would be having a whole different conversation about how M was doing just fine robbing Peter to pay Paul until the banks closed his/her accounts and forced him/her into default by demanding payment in full.  There's no shortage of reasons to make it someone else's fault if you want it that way.

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29 minutes ago, Harry Seaward said:
 

Ok, again, there is no way BoA opened a $33k credit line on this person.  Your scenario (which is highly unlikely for a variety of reasons) doesn't controvert that.  All it does is make an even stronger case that the person got in over their head all by themselves.  A bank increasing a person's credit limit is no more the cause of the person using that limit beyond their means than a casino offering free drinks to lure customers in to gamble is the cause of a gambling addict loosing the family farm.  People have to know their own limits.

If it is in fact the case that M is incapable of knowing his/her own limits, this is not the fault of the bank.

You stating it twice (or a hundred times) doesn't make it so.  If you've ever taken a business course, or used common sense, you know that you make more money lending to borrowers that repay the money than those that don't.  Now, of course banks make more money when they can charge interest which only happens if someone doesn't pay their credit cards in full every month, but that's not what we're talking about here.  You're claiming banks make more money when people default.  This is preposterous.

But somehow the bank was supposed to know and cut him/her off?  Then we would be having a whole different conversation about how M was doing just fine robbing Peter to pay Paul until the banks closed his/her accounts and forced him/her into default by demanding payment in full.  There's no shortage of reasons to make it someone else's fault if you want it that way.

1) I agree that M was/is incapable of knowing his/her own limits.  I'd like to know why you think this scenario is unlikely.  Your statement: "there is no way BoA opened a $33k credit line on this person.  Your scenario (which is highly unlikely for a variety of reasons) doesn't controvert that." is not backed up by anything.  Back in the days when I used a lot more credit cards, I noticed they kept increasing my limits everytime I paid more than the minimum.  I don't see why its so hard to believe the same thing happened with M.  Should M have stopped? Yes of course they should have.  Unfortunately they did not and now they are in this predicament, and I have to deal with it because I cannot just abandon M in disgust (much as I want to).  I'm also guilty of getting in over my head in the past (see my old threads on this forum), so I cannot claim that I don't live in a glass house and throw stones at others.

2) I can only say that I disagree.  I've seen it with my own eyes when I worked in the industry, and I've read stories about bank executives saying they want to over lend to consumers.  The part you may not fully appreciate is that defaults do not automatically equal more monetary losses for the banks.   They are playing the probabilities game.  In my first hand experience, over 97% of people do not default.  So the bank spreads their risks.  You just have to run the numbers.  Additionally, banks found a way to socialize their losses, by taxpayer bailout.   In the specific business I worked in, we were proud that our default rate was less than 1/2 percent.  However, we noticed our competitors were more than happy with a 3-5% default rate.  Why? because they did a LOT more dollar volume than we did.  So they made up the losses with profits from more loans.  Additionally, in the past 10-15 years, they changed the way they collect defaulted loans.  They hire attorneys to do collections, so they are more successful in recovering defaults.  Talk about preposterous.  If you don't agree, that's your right.  I will believe what I've seen.  So far, you haven't backed up your claims with anything

3) Again, when I was a lender, I can and did cut people off when I saw they were trying to get in over their heads. Our competitors had a different model:  lend more money anyway.

 

 

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10 hours ago, scarab said:

I'd like to know why you think this scenario is unlikely.

First of all, cash advance limits are no where near the credit limit of the account, and this is to prevent the very scenario you described.  It's also the same reason you cannot make a credit card payment with another credit card.  This means that none of the balances of the accounts would never reach the limits.  The other thing that makes it very unlikely is that interest would kick in around the 2nd or 3rd month snowballing the balances, causing the whole house of cards to collapse almost instantly. I.e., if the cash advance is tapped out on all of the cards, you no longer have enough to repay the cash advance plus interest on at least one of the cards.

Even if a consumer can manage to pay each account in full every month using your merry-go-round, it's obvious to a generally cognizant person that adding any additional debt would result in catastrophe.  It's not a banks fault that a consumer ignores, or just doesn't perceive, the threat.

 

10 hours ago, scarab said:

I've seen it with my own eyes when I worked in the industry, and I've read stories about bank executives saying they want to over lend to consumers.

...in 2005 when the entire country was intoxicated with loose credit.  Those days are long gone.  I bought a house in 2007 and again in 2017.  Completely different experience the second time around.  I don't think you'll find too many company emails that encourage overlending these days.

 

10 hours ago, scarab said:

They are playing the probabilities game.

This is not the same thing as saying banks make more money when people default.

10 hours ago, scarab said:

Our competitors had a different model:  lend more money anyway.

....in 2005.....

10 hours ago, scarab said:

So far, you haven't backed up your claims with anything

Other than common sense, you mean?  Guilty.  With what have you backed up your claims of systemic and widespread predatory lending that's relevant to this decade?

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And in case you missed it earlier, I'm not throwing stones at M.  He/she made whatever mistakes and encountered whatever struggles that brought him/her to where he/she is.  Hopefully he/she has learned a lesson and the rest of their life will be filled with happiness once this saga is behind him/her.

The problem I am having with this thread is the attempt to shift the blame to BoA for doing the same thing they do with every one of their other customers (that we as consumers celebrate by the way), but somehow they were supposed to know M was teetering on the verge of financial collapse, when M's own family and closest friends had no idea.

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@Harry Seaward At this point I do not want to argue about who is to blame anymore. We will have to accept that we have differing opinions on this and any more of this will not help the matter at hand. And this point, I call a truce on this debate.

As for the matter at hand, the facts are simple:
 

  1. M has racked up appx. $40k in unsecured credit card charged, interest, and late fees
  2. The accounts are now in default and the bank is to the point of hiring debt collectors and law firms. The debt has probably been charged off at this point. Does not sound like it has been sold to any JDBs
  3. M has an income of $16k/year from a source that is exempt from attachment and no assets that can be attached and no reasonable expectation short of winning the lottery that M will ever have any attachable assets.
  4. Since there are no assets and all this debt, if M were to die tomorrow, the estate would be insolvent.

Based on this, no matter what the creditors decide to do, they will not get paid. That is regardless of any blame.

So at this point, what should happen is thing:

  1. M should send the 2 law firms a DV letter first, before anything else. It is easy to validate but he might as well make them follow the law.
  2. M should check into the account agreements to see if arbitration is an option
  3. M should notify his bank immediately that his checking account contains only exempt income and M will need to make sure to spend that entire income monthly

Anything beyond that will depend on what the law firms decide to do. If they answer the DV, you could send a letter explaining the situation and see if they are willing to throw good money after bad. If arbitration is an option, you could request that and if they file suit, get a judge to possibly demand they use the arbitration route. That again might convince them not to throw good money after bad.

A final option would be to get together the funds to do a chapter 7 bankruptcy. That would stop everything in its tracks and make the banks realize that they are getting nothing back. I am loath to do that with a 70 year old however because there might be some huge medical bills in the future. Then again, I don't know how it works for someone whose only income is SS so that would be something to look into. I would not take this option off the table but consider when it would be the best time to pull the trigger.

Whatever happens here, M must be told that they should not borrow any more money. To do so would be akin to stealing because at this point, M know he cannot pay it back. Make sure you ingrain that into him. The damage to his reports might help but that depends on how the banks view such events.

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2 hours ago, WhoCares1000 said:

@Harry Seaward At this point I do not want to argue about who is to blame anymore. We will have to accept that we have differing opinions on this and any more of this will not help the matter at hand. And this point, I call a truce on this debate.

As for the matter at hand, the facts are simple:
 

  1. M has racked up appx. $40k in unsecured credit card charged, interest, and late fees
  2. The accounts are now in default and the bank is to the point of hiring debt collectors and law firms. The debt has probably been charged off at this point. Does not sound like it has been sold to any JDBs
  3. M has an income of $16k/year from a source that is exempt from attachment and no assets that can be attached and no reasonable expectation short of winning the lottery that M will ever have any attachable assets.
  4. Since there are no assets and all this debt, if M were to die tomorrow, the estate would be insolvent.

Based on this, no matter what the creditors decide to do, they will not get paid. That is regardless of any blame.

So at this point, what should happen is thing:

  1. M should send the 2 law firms a DV letter first, before anything else. It is easy to validate but he might as well make them follow the law.
  2. M should check into the account agreements to see if arbitration is an option
  3. M should notify his bank immediately that his checking account contains only exempt income and M will need to make sure to spend that entire income monthly

Anything beyond that will depend on what the law firms decide to do. If they answer the DV, you could send a letter explaining the situation and see if they are willing to throw good money after bad. If arbitration is an option, you could request that and if they file suit, get a judge to possibly demand they use the arbitration route. That again might convince them not to throw good money after bad.

A final option would be to get together the funds to do a chapter 7 bankruptcy. That would stop everything in its tracks and make the banks realize that they are getting nothing back. I am loath to do that with a 70 year old however because there might be some huge medical bills in the future. Then again, I don't know how it works for someone whose only income is SS so that would be something to look into. I would not take this option off the table but consider when it would be the best time to pull the trigger.

Whatever happens here, M must be told that they should not borrow any more money. To do so would be akin to stealing because at this point, M know he cannot pay it back. Make sure you ingrain that into him. The damage to his reports might help but that depends on how the banks view such events.

Thank you for this. I'm happy to call a truce.

Yes, you've stated the facts as I see them.

M has already promised me that they will not borrow any more money.  I told M that if they need money for medical or something, to let me know.  Now that I know any money I give to M could be seized (non exempt funds), I will just have M send me any bills they need paid, and I will do it directly with the biller.

 

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3 hours ago, WhoCares1000 said:

M should notify his bank immediately that his checking account contains only exempt income and M will need to make sure to spend that entire income monthly

Under the law the bank cannot freeze the account until they verify that the funds in it are not exempt.  There is NO need to spend every penny each month.  As long as there is less than 2 months worth of benefits in the account they cannot be seized.  ANY amount in excess of 2 months worth of SSI is subject to account levy.  Most SSI recipients live month to month so it really does not matter. I would just hate to see someone spending $50 on junk they really don't need out of fear it could be taken when it can't and could be saved for a prescription or food.

55 minutes ago, scarab said:

I will just have M send me any bills they need paid, and I will do it directly with the biller.

 

This is by far the best option.  

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Doing nothing is indeed a viable option too. At some point, M will have to do something however. Most likely fill out a financial disclosure and at that point, the bank will realize that their judgement is fine outhouse paper.

As for setting aside money, M could keep small amounts of cash at home saved up. By the time most necessities are paid, I doubt there is much left over anyways.

As for helping M pay a bill once in a while, that is the best option. Pay the biller directly. This also ensures that the funds reach the right place. I have done that more than once to help various people out.

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