After 6 months or so they'll stop collecting. The medical might get re sold though. Yea, another negative trade line on her report. I'd save the $1500 at this point.
After 6 months or so they'll stop collecting. The medical might get re sold though. Yea, another negative trade line on her report. I'd save the $1500 at this point.But if her financial situation does improve sometime in the relatively near future isn't it possible that her creditors can basically put her right back in her current situation with garnishments at which time she would then have to file for bankruptcy? Frankly it doesn't sound like it's going to get good enough in the next 5-10 years to be able to reasonably pay off these debts even if she does start making more money. Why not just get a clean slate right now, especially since she has help to navigate her through it, keep her on the right track and start building up her credit. It will definitely be a faster way for her to rebuild her credit imho.
After 6 months or so they'll stop collecting. The medical might get re sold though. Yea, another negative trade line on her report. I'd save the $1500 at this point.
^ What Jeeebus said. All I can add is always pay a creditor something, even a minimum amount. Pay $10.00 a month to the funeral home. They can't get blood from a stone. Time to step up and not work for minimum wage (literally). She'll also feel better about herself with a better job. Especially with a college education.
As someone who does a fair bit of bankruptcy litigation in addition to being familiar enough with Florida's asset protection laws (which in fairness is far more debtor friendly than most states), I'm just not seeing the real benefit to her filing a bankruptcy petition now. It might make sense 6 months from now, 2 years from now, etc., but the rush to file now seems tied to this one creditor (funeral home) threatening a lawsuit. She's not getting thrown in jail because someone threatens or pursues a lawsuit. Worst case scenario is they make good on their threat, sue her, and get a default judgment. She's looking at a minimum of 3 months for that to play out before they have a piece of paper saying she owes money. If she's got nothing to collect (or more importantly, nothing they know which is available to collect), then it remains a piece of paper and either the funeral home or whichever debt collection company they sell the debt to can spend whatever they want in fees/costs spinning their wheels trying to collect nothing.
Bankruptcy is not a magic cure in all situations. She could spend $2,000 to file and if the funeral home is super aggressive, they can sue her in the bankruptcy court to stop/avoid her bankruptcy discharge (on the basis that her promise to pay was fraud or that she didn't disclose assets on her petition). That $2,000 doesn't cover any adversary proceedings, so now she needs to hire someone to defend otherwise the bankruptcy was a waste. So now she's looking at minimum of $10,000 to get out from under $16,000 of debt. There are many reasons why bankruptcy might not be her best solution today.
As I said above, and a lot of this is Florida-specific, but a judgment is just a piece of paper. I had an opponent get a $110,000 judgment against one of my clients in July 2017 (they were suing for $3 million and there were 10 defendants, including the client's wife). After the trial the other side asked me when they could expect payment. I laughed at him and wished him good luck. The husband/wife own 3 rental properties together (untouchable), they own 2 restaurants which probably bring in $200,000/mo (untouchable). So long as he's not stupid enough to open a personal bank account with only his name, stick $100,000 in there, and tell the other side about the account - they will never recover a penny. Unless you're suing a huge corporation or someone with an insurance policy, the chances of recovering anything are generally minimal if the person being sued has half a brain.
As I said above, and a lot of this is Florida-specific, but a judgment is just a piece of paper. I had an opponent get a $110,000 judgment against one of my clients in July 2017 (they were suing for $3 million and there were 10 defendants, including the client's wife). After the trial the other side asked me when they could expect payment. I laughed at him and wished him good luck. The husband/wife own 3 rental properties together (untouchable), they own 2 restaurants which probably bring in $200,000/mo (untouchable). So long as he's not stupid enough to open a personal bank account with only his name, stick $100,000 in there, and tell the other side about the account - they will never recover a penny. Unless you're suing a huge corporation or someone with an insurance policy, the chances of recovering anything are generally minimal if the person being sued has half a brain.
Welcome to what should be H.S. "life skills" class.True but it stays on her credit report for at least 7 years and most debt usually gets sold off to collection agencies so she could get calls for years to come on all of it. Even worse is any account activity starts that 7 year clock again so if they talk her into making a single payment in 3 or 4 years and can't make any more then it stays on her report for 7 years. Even worse is that judgments last 10 years and can be extended twice so they can theoretically last for 30 years, if she does start doing better and gains any assets during that time they can go after them.
Welcome to what should be H.S. "life skills" class.
There are currently 73+ stories on notalwaysright.com with the title "This is why we're in a recession" and 196 with the "money" tag. People are dumb.No shit. It always amazed me that they didn't even teach how to balance a checkbook in H.S. I had a few friends right after H.S. that had the mindset of "I can't be out of money yet, I still have checks!"
I never balanced a checkbook, but that's cause I'm lazy. I kept most of it in my head, and trusted the credit union. It all worked out, especially cause I preferred not writing checks when possible. It's not conceptually hard though. It's about the simplest math an adult(ish) could expect to do. If you aren't qualified to balance a checkbook, I'm not sure what use you are for anything.
To clarify, her student loans are for beauty school - she's a hairdresser. The good news is her loans are much smaller than most people think of for student loans. The bad news is it qualifies her to do exactly the job she's doing.
Viper GTS
Every once in a blue moon I run across someone who's illiterate. It's always a little shocking. I don't really have a memory of not being able to read, and in my middle class circle, being illiterate was unheard of.When I worked retail, I had coworkers who were very obviously functionally illiterate.
So... stocking shelves and sweeping things?
No shit. It always amazed me that they didn't even teach how to balance a checkbook in H.S. I had a few friends right after H.S. that had the mindset of "I can't be out of money yet, I still have checks!"
She makes essentially nothing (<$17k in North Jersey)
Every once in a blue moon I run across someone who's illiterate. It's always a little shocking. I don't really have a memory of not being able to read, and in my middle class circle, being illiterate was unheard of.
The one thing I will say positively about the smartphone generation is that at least it encourages people to learn how to read, because texting is apparently pretty addicting...I'd be curious to know how that has impacted general literacy as well.
I have a close family friend that is in a tough situation, I'm trying to come up with ideas.
She (26) was the primary caretaker of her only remaining parent for the last year, her mom died in November. Despite having siblings she was the only one around at the end, and ended up being the one to do all funeral arrangements. Only her name on any of the paperwork ($8k and change). Her siblings had a loose agreement to split it into thirds, but of course now they have no money. The funeral home is now threatening lawsuits if she doesn't have a check for them by the end of the week.
She makes essentially nothing (<$17k in North Jersey), has very little cash, has nothing of any value to sell, and has existing charged off debt totaling $7k or so. Without the funeral bill I think her situation was salvageable - She has no history of excess spending or credit card use (chargeoffs are medical and vet) so it's not a fundamental problem with her. She simply has no money. Creditors have tried and failed to have her wages garnished, even the courts here in NJ agree there is nothing to be had.
The Gofundme she set up grossed $50. My wife and I are already providing substantial ongoing financial assistance with her housing/utilities/groceries/etc and I'm vehemently opposed to subsidizing her deadbeat family so paying it myself is likely not going to happen. I am willing to fund and guide her through the bankruptcy process.
Although I'd ideally like to see her avoid the bankruptcy I'm really not seeing a huge downside here. Her credit is already screwed (ish at least). She makes so little that it would be a clear shot to chapter 7 as far as I can see, and very simple - Three or four creditors total with approximately one year's gross pay for her.
My thinking is that this is precisely the kind of situation that bankruptcy is designed for. She wipes everything but her school loans which she has recently gotten back to good standing, keeps those current, has my help for the next few years, and in 2-3 years likely has better credit than she has today.
She will basically do whatever I recommend here, what's her best move? Any value in going to the funeral home and saying look if you play nice her intent is to pay you in full, but if you go nuclear and get a judgment you'll end up with literally nothing?
Viper GTS
At $15/hr...When I worked retail, I had coworkers who were very obviously functionally illiterate.
So... stocking shelves and sweeping things?
I've got a 60ish customer that is. He grew up in the country and poor so work trumped school. But he's been at the same manufacturing job for 40+ years making ~$30/hr, every day after work he'll do a couple of yards for extra $$. Damned hard worker. Guess his kids took the hint. 1 son works at a research park in NC. 1 daughter works for the IRS. 1 just started as a cardiologist in Charleston. Impressive parenting.Every once in a blue moon I run across someone who's illiterate. It's always a little shocking. I don't really have a memory of not being able to read, and in my middle class circle, being illiterate was unheard of.
I've got a 60ish customer that is. He grew up in the country and poor so work trumped school. But he's been at the same manufacturing job for 40+ years making ~$30/hr, every day after work he'll do a couple of yards for extra $$. Damned hard worker. Guess his kids took the hint. 1 son works at a research park in NC. 1 daughter works for the IRS. 1 just started as a cardiologist in Charleston. Impressive parenting.
Doesn't sound like hes doing that good for himself if hes going to you for a loan.