Collection agency, is the home and SS income safe?

[RedTelephone]

What is the name of your state?What is the name of your state?I live in Massachsetts.

My father just recently was approved for Social Security disability benefits. He has outstanding debt, American Express credit card, which has gone to collections. The balance is about $10,000.00.

I would like to know if his home and SS income will be exempt from the collection agency.

The home ownerhsip is his and his brother's name. Currently they have an equity line of credit, with a balance of about $25,000.00. The equity line is in good standing, and paid every month, and will continue to be paid.

Seeing as they both *own* the home, what can the collection agency do about the credit card debt? Also, if they can put a lien (win a judgement) on his "share" of the home, how does that affect the equity line? Would'nt they have to wait until that line was paid off? Effectivley, you could keep it open so it never is paid? Doesn't the bank actually own the home, at this point, with the equity line?

He will have enough to pay the equity loan each month, but not any of his credit card debt. All his debt is unsecured with credit cards. He doesn't want to file bankruptcy, and may try to settle with the agency, but he cannot ever pay the full balance.

If they don't want to settle on a small payment, what is the use of even making payments, since the interest is more than the payment he could make.

Any help will be really appreciated!

Thanks,
BL

[Debt Guy]

A judgment creditor cannot garnish social security.

Massachusetts has a $500,000 exemption for real property. I think your dad should be OK.

[debtcollector`]

Originally Posted by Debt Guy

A judgment creditor cannot garnish social security.

Massachusetts has a $500,000 exemption for real property. I think your dad should be OK.

While they can't garnish or go after the house, they will continue collections actions. I would suggest making a settlement offer. Use the line of credit to fund it and pay off the LOC (which has deductable interest).

DC

[RedTelephone]

Thanks Debt Guy. I did some checking, and yes, the Social Security cannot be garnished. It's a federal law. The only thing the collection agency could do, if they got a settlement, would be to cease the bank account. However, once you show the funds within the account are exempted, the money must be returned. There won't be too much in that account anyway, so I don't see a problem there.

The Equity line only has about $6000.00 avialable on it, after home repairs, etc. So paying off the debt that way won't work. I may end up offerent to settle, but if they don't take the offer, then I guess they are out of luck. The only real property he has is the home and a year 2000 Truck, besides the normal stuff one would have. No priceless paintings, gold sculptures, or anything like that.

At this point, with the late fees and interest, it's almost not worth paying, as any payment he could make won't cover those. If the collector won't be reasonable, he'll end up with his hand in the breeze.

BL

[Debt Guy]

Ignore Debt Collector. His bias is not in your best interest.

The only thing a judgment creditor could go after is the bank account and the vehicle.

You are right that the SS funds in the bank account are exempt. But, once they have their gubby hands on it, you will have to prove it is exempt, petition the court to order it returned, etc. Takes time and in the meanwhile they got your money. Just keep the balance low.

They may go after the truck if he has equity in it. Usually they will ignore vehicles unless the equity is sizeable -- otherwise there is not much left after cost of seizure, sale, etc.

I would save the equity line for a real emergency. Paying off a credit card is not an emergency.

You can stop the collection calls with a simple cease and desist letter.

Like I say, I think he is going to be OK. Good luck.