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Need advice ASAP as my parents need to respond to the summons! Please refrain from personal attacks as this is extremely emotional for us.

My elderly parents (mid-late-60's) are being sued in California state by a creditor for $10K credit card balance that they are delinquent on. The credit card was used for living expenses. The card is in my mother's name.

My mother is a homemaker with ~$250/month income from SS
My father is unemployed after being laid off from his maintenance job and his unemployment runs out this month. His only income will then be ~$800/month from SS.

Total income: ~$1050/month, rent $600/month

They have no assets ($0 savings), no automobiles in their name, no house, or other assets. They will soon be relocating to live with me so that I can help them with living expenses.

My understanding is that SS wages cannot be garnished. They have no need for credit. From what I've read, it seems like there wouldn't be any recourse. For this reason (only SS income and no assets), it doesn't seem beneficial for them to incur the costs of bankruptcy, especially considering they can't afford it.

They can't afford a lawyer and they're both immigrants who speak little English. I am trying to help them as best as I can, but I am a recent college graduate who is trying to get my own post-grad affairs in order. I am also ~2000 miles away and so unable to help them in person thus am trying to do everything remotely.


What should they do? What is their best course of action? Should we contact the CC company and tell them there's nothing to go after and no income coming in? Should we respond to the summons and if so, how? Or should we simply ignore the notice and let it go into default?

Thank you so much in advance for your advice!

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Dont have any advice on your question. But wouldnt your mother qualify for full spousal benefit from SS --- is she of full retirement age?

If they have no assets then the judgment the creditor obtains will be essentially worthless

If you have some funds to settle this debt and want to make an offer , you should do so before trial . Contact the law firm listed on the summons , tell them they have no assets and will obtain a worthless judgment if they proceed , and that to avoid troubling your parents you are willing to help settle the debt . Offer 5-15%, whatever you can afford , on the condition the suit is dismissed with prejudice and the entire debt is extinguished

If they don't take it, they waste their time getting a worthless judgment

SS benefits can only be garnished by the govt, so assuming the creditor is private, there is really nothing for them to go after. Since there are no assets or income subject to garnishment, hiring a lawyer seems like a waste. With enough time the creditor might settle for 20-40% but they couldn't pay that either, plus they don't need their credit so don't care if there are derogatory marks on it. And creditors and debt collectors hear sob stories all day long so likely wouldn't care much about this one.

To summarize, seems like this is just going to go to collections and you all will have to deal with the hassle of debt collectors for a few years...

ETA: Sorry for lack of clarity. I didn't mean to just ignore the lawsuit, I just don't see the money there to hire a lawyer and I wouldn't be terribly optimistic that the creditor will care about your parent's situation. That being said, per crabbing, best plan at this points is to try to find free legal counsel or per SIS, otherwise convince the lawyers that there's no benefit in pursuing your parents...

There can be other results besides just having judgment collectirs trying to enforce the judgment . Generally you can simply write to any collector and tell them to cease contact , and they must honor that , or else you can turn around and sue the collectors !!

However - Note that after a judgment is Obtained, they can haul the parents in for a debtors exam, to verify whether they really have assets or income . In CA If they fail to attend this , a warrant for their arrest can issue

This is how some civil matters become criminal ones .

So while generally you can ignore the civil lawsuit , you need to carefully carefully read the documents sent to the parents to make sure they don't ignore something with a criminal penalty . The documents will clearly specify this , but you can't just give then the blanket suggestion to ignore everything .

never, ever, ignore a lawsuit. if they don't answer the summons (which i presume was mailed to them and asks them to waive service), then a process server will come and your parents will feel like they are being harassed.

judgment proof isn't limited to bankruptcy. think carefully about whether your family can afford to offer a settlement along the lines that SUCKISSTAPLES suggested, but also make sure that you don't put yourself on the hook for anything. but don't assume that you have to offer to settle anything. if you can talk to the creditor's lawyer, you can honestly tell them what kind of assets your parents have, and they will see there is no point in pursuing the lawsuit, at which point they might drop it (without prejudice, meaning they can always try again, but that's fine if you or your parents aren't paying anything).

this isn't without risk, though. don't trust what random people on the internet tell you about the inability of creditors to garnish SS or other benefits. get in touch with a legal aid service in california to help your parents. there are many places that offer free legal aid, particularly to low income and seniors.

SUCKISSTAPLES said:   If they have no assets then the judgment the creditor obtains will be essentially worthless

If you have some funds to settle this debt and want to make an offer , you should do so before trial . Contact the law firm listed on the summons , tell them they have no assets and will obtain a worthless judgment if they proceed , and that to avoid troubling your parents you are willing to help settle the debt . Offer 5-15%, whatever you can afford , on the condition the suit is dismissed with prejudice and the entire debt is extinguished

If they don't take it, they waste their time getting a worthless judgment


Hello SuckIt
Just curious.
Would your suggestion of having the son offer to pay the debts in exchange of settling it with the credit companies, just a good will measure? Basically living by the "Pay your bills deadbeat? Fatwalleters generally like to give?

I Mmean if the parents only have SSI that cannot be garnished? What is wrong with just having them making a worthless judgement? That is what I would suggest. The parents are basically "protected" and will never get the money. In essence wouldnt just ignoring things resolve the issue?
Is there something I am overlooking?

crabbing said:   never, ever, ignore a lawsuit. if they don't answer the summons (which i presume was mailed to them and asks them to waive service), then a process server will come and your parents will feel like they are being harassed.

judgment proof isn't limited to bankruptcy. think carefully about whether your family can afford to offer a settlement along the lines that SUCKISSTAPLES suggested, but also make sure that you don't put yourself on the hook for anything. but don't assume that you have to offer to settle anything. if you can talk to the creditor's lawyer, you can honestly tell them what kind of assets your parents have, and they will see there is no point in pursuing the lawsuit, at which point they might drop it (without prejudice, meaning they can always try again, but that's fine if you or your parents aren't paying anything).

this isn't without risk, though. don't trust what random people on the internet tell you about the inability of creditors to garnish SS or other benefits. get in touch with a legal aid service in california to help your parents. there are many places that offer free legal aid, particularly to low income and seniors.

Sometimes specific immigrant communities as well.

walt99 said:   My elderly parents (mid-late-60's)

So 65 is elderly now? Tell'em to get a job.

Can they come after your roth ira in collection of a judgement?

poese said:   SUCKISSTAPLES said:   If they have no assets then the judgment the creditor obtains will be essentially worthless

If you have some funds to settle this debt and want to make an offer , you should do so before trial . Contact the law firm listed on the summons , tell them they have no assets and will obtain a worthless judgment if they proceed , and that to avoid troubling your parents you are willing to help settle the debt . Offer 5-15%, whatever you can afford , on the condition the suit is dismissed with prejudice and the entire debt is extinguished

If they don't take it, they waste their time getting a worthless judgment


Hello SuckIt
Just curious.
Would your suggestion of having the son offer to pay the debts in exchange of settling it with the credit companies, just a good will measure? Basically living by the "Pay your bills deadbeat? Fatwalleters generally like to give?

I Mmean if the parents only have SSI that cannot be garnished? What is wrong with just having them making a worthless judgement? That is what I would suggest. The parents are basically "protected" and will never get the money. In essence wouldnt just ignoring things resolve the issue?
Is there something I am overlooking?

Some people wouldn't be able to sleep at night knowing there were active court cases and judgements against them, even if it won't affect them directly. It all depends on the type of people they are, but giving his elderly parents piece of mind could be well worth a couple thousand dollars.

Judgement will be worthless. But there is karma Kramer.

mastroadam said:   Can they come after your roth ira in collection of a judgement?
Depends on the state law. For many, smaller IRAs are protected but larger ones are fair game. Certainly if you take the money out and don't spend it, it can be taken or seized, but why would you do that?

can't get blood out of a turnip, but, they could have been paying $50/mo all along and that would have likely kept it from going this far

Check and see if there is an arbitration agreement on the card. If so, invoking the arbitration clause may help significantly, as it usually requires the credit card company to pay a large sum of cash up front to proceed to arbitration.

How is your relation with your parents? Do they value and trust your advice? I say this because I think you to take a more active role in their lives. If you negotiate down to 10% or 20% can you afford to pay off for them? Will they rack it up again once they get out of this pickle? I don't consider 65 that old but these people sound like they need your help. Its tough for the elderly to survive out there. There are con-artist, bank fees and hidden charges all over the place. My mom was renting her phone from the telephone company all the way until 2000. These old folks need your help.

I'm missing why they can't work.. Are there kids at home or something, grandkids that need to be taken care of? Your mother is a home maker ..how about cleaning houses or something.

walt99 said:   They're both immigrants who speak little English. I am trying to help them as best as I can

Didn't seem to hinder them from getting a CC.

If you want to settle and pay a small percentage tell the cc company your parents have no assets and that they if they pursue it they will claim bankruptcy. IF they wont reduce the amount to something you are willing to pay and you parents have no assetts as you state then have her claim bankruptcy. they wont be able to garnish ss benefits if you claim bankrupcy

He is NOT SUCKIT! You really offended FW Community here!

poese said:   SUCKISSTAPLES said:   If they have no assets then the judgment the creditor obtains will be essentially worthless

If you have some funds to settle this debt and want to make an offer , you should do so before trial . Contact the law firm listed on the summons , tell them they have no assets and will obtain a worthless judgment if they proceed , and that to avoid troubling your parents you are willing to help settle the debt . Offer 5-15%, whatever you can afford , on the condition the suit is dismissed with prejudice and the entire debt is extinguished

If they don't take it, they waste their time getting a worthless judgment


Hello SuckIt
Just curious.
Would your suggestion of having the son offer to pay the debts in exchange of settling it with the credit companies, just a good will measure? Basically living by the "Pay your bills deadbeat? Fatwalleters generally like to give?

I Mmean if the parents only have SSI that cannot be garnished? What is wrong with just having them making a worthless judgement? That is what I would suggest. The parents are basically "protected" and will never get the money. In essence wouldnt just ignoring things resolve the issue?
Is there something I am overlooking?

do178b said:   Its tough for the elderly to survive out there.

Age 65? Again with the elderly remark. When I get that age, I hope I'll be kickin ass, I'm not going to be sitting in a rocking chair all day. OP never mentioned they were disabled so why can't they bring in income? Down in Florida you see 80 and 90 year olds working at MacDonalds a few days a week.

Defaulted on debt with sub poverty cash flow sounds like time for
The FlyingIFR Method.

Respond to the summons. Why make it easy for them? Every time they have to go to court it costs them money!

Just for clarification: Is the credit card company suing them or a junk debt buyer (JBD)? A Junk Debt Buyer will be someone like Midland, Arrow Financial, or Sherman Acquisitions. If Original Creditor, it will be a Law firm directly Representing Capital One, etc filing suite. (There is no need to list dollar amounts or who is suing your parents.)

I would also look into getting a copy of the cardholder agreement. Contact the Original Creditor (OC)

I might know someone 'Wink' 'Wink', that proceeded Pro-Se in a similar situation, and elected arbitration against a Junk Debt Buyer. The attorney's tried at every point to violate said person's rights. Said person then had a lawyer represent them on contingency and collected a 4-digit settlement from them. (Including attorney's fees, they nearly paid a 5-digit settlement.). Of course said person could not disclose specifics of such things, do to non-disclosure agreements.

http://www.debtorboards.com

Your Parents may not want to take the time/willpower to fight, but if you educate them in what is Illegal and to carefully note (Or record if legal in your state) any infractions you could greatly help them. Once they have solid infractions a lawyer can takeover and relieve them of the stress.

I personally wouldn't pay a penny over $500 to settle. Contacting other side to let them know they are essentially judgement proof wouldn't hurt, but expect the lawyers to try every trick in the book to get them to pay up, cease making any defense, and make them feel bad. "This is a delay tactic, your just putting off the inevitable." "So this is your debt and you just don't want to pay?"

Advice:
Respond to the Summons. Attend any court dates. Ignore everything else.
(In my area, you schedule a hearing if you have a Motion to dismiss, Compell, Etc.)
I would copy the headers and formatting from the document you already have.
* I personally like arbitration, because it is expensive for the other side to pursue, takes the case out of court, and in California they are responsible for a much higher amount of the Arbitration fees (All of them I believe?). - Of course any good lawyer (For either side) would advise you to keep the case in court.

They will probably settle for $3K or less, but I would deal with them before they get the judgement. Offer $500 and go from there.

Better pay it in full or it will hurt their credit!! /sarcasm

Had a similar situation with my in-laws. Lived in Cali forever, couldn't afford it, wouldn't leave, never caught up on income vs expenses, constantly being hounded by one creditor or another. Real issue came when I sold them my truck, basically for free. FIL didn't register it when he got title transfer because he had judgements against him and was afraid it would get taken. Fast forward 2 years now his son has it and wants to get it titled, and what a mess it is. Anyway they finally moved to Phoenix and can afford a place on SS plus some income, so spend as much or more time getting them into a situation within their means and not repeating this cycle over and over.

valueinvestor said:   Check and see if there is an arbitration agreement on the card. If so, invoking the arbitration clause may help significantly, as it usually requires the credit card company to pay a large sum of cash up front to proceed to arbitration.

I believe nearly every Citibank card has this arbitration clause. Usually, if you want to opt for arbitration it needs to be done before filing your answer to the initial complaint. OP, do you know who the original creditor was? Are they being sued by the original creditor or a junk debt buyer?

My parents are both 65 and are nowhere near "elderly" status...aside from the fact my Dad takes advantage of every "senior discount" he can get his hands on - and he's not even on FW!

Sand.

Go Pound It.

Signed Parents

stiltner said:   Sand.

Go Pound It.

Signed Parents


Yep, stick it to the big corporations. They'll just jack everybodies rates up to make up for it.

On a serious note, OP's parents spent money that wasn't theirs, that they didn't have to pay back and screwed the card issuer. This indirectly, effectively hurts MY interest rates and ability to borrow money.

So platitudes like "go pound sand" and "stick it to the man", while good intention in nature, I think are misguided.

Granted, we try and help every OP in whatever situation they're in, regardless of what is right/wrong often. In this case, as SIS and others have said, ignoring this, especially when it could be going to court, would be a very unwise decision.

robby69 said:   walt99 said:   They're both immigrants who speak little English. I am trying to help them as best as I can

Didn't seem to hinder them from getting a CC.

back in 2001, CC issuers would give a CC to my cat and dog or whatever feels warm to touch and has a address in US.

fwuser12 said:   Dont have any advice on your question. But wouldnt your mother qualify for full spousal benefit from SS --- is she of full retirement age?

Right. A spouse is entitled to the higher of their own benefit or 50% of their spouses benefit. So mom in this case is getting $250 and would be entitled to that or 50% of dad's $800. She should claim the 50% of dads to get $400 (assuming mom is eligible).

videogamesaremylife said:   Respond to the summons. Why make it easy for them? Every time they have to go to court it costs them money!


While you're at it, request to have an interpreter provided for them. When the creditors see that they can barely speak English, they'll be a lot less motivated to collect. (Unless the language is Spanish, which is becoming ubiquitous.)

Al3xK said:   On a serious note, OP's parents spent money that wasn't theirs, that they didn't have to pay back and screwed the card issuer. This indirectly, effectively hurts MY interest rates and ability to borrow money.

So platitudes like "go pound sand" and "stick it to the man", while good intention in nature, I think are misguided.

Granted, we try and help every OP in whatever situation they're in, regardless of what is right/wrong often. In this case, as SIS and others have said, ignoring this, especially when it could be going to court, would be a very unwise decision.


Flat out ignore how business is run these days. They charge what the market will bear (bere??) not x plus my costs. They get every last penny from us i say "sand go pound it" is great. CC arent going to up rates next year because of these ppl... if they go up its because issuers have decided we are stupid enough to pay it. :education over:

I have seen multiple SS accounts be garnished and it then becomes the responsibility of the debtor to show that all the money in the account is from SS. It's a fairly easy thing to show, but can make finances extremely tight while the company drags its legs reviewing the documentation. I vote for calling the law firm and settle the debt at a fraction of the cost.

I hear Poland is nice this time of year.....

Table83 said:   I have seen multiple SS accounts be garnished and it then becomes the responsibility of the debtor to show that all the money in the account is from SS. It's a fairly easy thing to show, but can make finances extremely tight while the company drags its legs reviewing the documentation. I vote for calling the law firm and settle the debt at a fraction of the cost.

When you talk about the "money in the account is from SS" I assume you mean a creditor getting money from a bank account.

If the parents take their SS checks then deposit it into a bank then it may be possible for the debt collectors to get the money thats simply held in cash. The parents should be careful about not depositing their SS checks into bank accounts for this reason.

I tried to settle my daughter's credit card past due debt over the phone - idiot's refused to talk to me even though I said I was willing to pay the original debt minus all the junk penalties they added (which doubled the amount "owed"). I ended up telling them "good luck getting anything out of her" and hung up.

Skipping 37 Messages...
vipercon said:   coolcat said:   Karma is a bitch. You will get bitten when you least expect it.

Your parents spent the money pay back what was owed. The credit card company loaned the money with good faith. You need to repay.


Don't know the situation, but they may have already paid back what was loaned several times over. Most money owed to credit card companies is not money loaned out but amounts just added to bill by computer (interest, late fees, etc.).

Edit: If I loaned you $1,000 and over the course of 2 years you paid me back $2,000 and still owed $1,000 from interest and fees, do I REALLY lose money when you don't pay me back the $1,000 you still owe me?


We would need to know the specific facts, but you are right, this could be $2000 in purchases that ballooned into $10k in debt.



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