Question about charge off vs bankruptcy when you have nothing

[isis297]

What is the name of your state (only U.S. law)? NY

My mom's medical bills have increased greatly in the last couple of months. She has asked me my opinion about bankruptcy for her credit card debt and I don't know what to tell her to do. I told her I knew if she just stopped making payments, the cards would eventually get charged off, but then collection companies would try to collect the funds from her. She lives with me because of her health, so she doesn't have anything of value that anyone can go after. We had to sell her car and she doesn't have savings. She gets social security so she doesn't file taxes. With bankruptcy, wouldn't she have to pay a lawyer a percentage of what gets charged off?

I hate that she has to worry about this, but I am not in a position to do any more financially.

 

[FlyingRon]

Charge off means nothing to the borrower or their attorney. It's an accounting term to the lender than means they can stop counting the debt as something they will eventually get and write it off for tax purposes. As pointed out, it doesn't forestall the original creditor or a collection agency from trying to collect it as long as the debt is still within SOL.

You can't take bankruptcy just on some of your debts. It's an all or nothing affair.

You're mistake on how the attorney is paid. The attorney does not get a percentage of the debt. Talk to an attorney. They'll tell you what it will cost. The attorney can educate her on what the implications/benefits of the process are.

 

[isis297]

What is SOL? I know what it usually stands for...

Do you mean that if she lets the balances be charged off, they will just keep calling constantly until a certain number of years pass? Is that all they can do though is keep calling since she doesn't have anything or could they sue her or do anything to her social security?

I don't know that bankruptcy would work for her because she has medical bills she owes for and is making small payments on. She can't do anything to possibly jeopardize her future care.

 

[Proserpina]

What is SOL? I know what it usually stands for...

Do you mean that if she lets the balances be charged off, they will just keep calling constantly until a certain number of years pass? Is that all they can do though is keep calling since she doesn't have anything or could they sue her or do anything to her social security?

I don't know that bankruptcy would work for her because she has medical bills she owes for and is making small payments on. She can't do anything to possibly jeopardize her future care.

Nobody can take SSI. Certain creditors (IRS, child support etc.) can garnish SSDI.

If she is sued, she needs to raise the SOL as a defense. Generally the SOL starts to run the last date there was any action she makes on the account.

In all honesty though, if she's on SSI there's little point in going down the path to bankruptcy.

 

[Proserpina]

What is SOL? I know what it usually stands for...

Do you mean that if she lets the balances be charged off, they will just keep calling constantly until a certain number of years pass? Is that all they can do though is keep calling since she doesn't have anything or could they sue her or do anything to her social security?

I don't know that bankruptcy would work for her because she has medical bills she owes for and is making small payments on. She can't do anything to possibly jeopardize her future care.

Sorry, ... SOL = statute of limitations but I like your version must better (since they both apply in some situations )

She can tell them to stop calling her. Read here: http://www.consumer.ftc.gov/articles/0149-debt-collection