Get Out of Debt Guy

Help Available for Seniors and Disabled Persons With Old Debt They Cannot Afford to Pay

Posted February 2

It has been hard to find resources to assist senior citizens who are struggling with debt. Not only are they scared and confused about what to do, they just don’t have the money to pay for the right help.

Well along come this non-profit law firm to assist seniors and I’ve heard a lot of good things about the, so I asked Eric Olsen to write the piece below and help explain what they do.

Steve Rhode "Get Out of Debt Guy"

What You Need to Know About HELPS

By Eric Olsen Executive Director, HELPS Nonprofit Law Firm

Not long ago a senior couple explained to me that the wife had secretly been cutting her medicines in half until she became ill. She finally admitted to her husband what she had been doing after she got sick.  They needed that extra money to pay old debt they owed. They described in detail their struggle to be able to purchase enough food, how they had learned where to buy the cheapest cans of beans.

A widow I spoke with recently, explained that when her husband passed away she was only left with his social security income of around $1100 per month.  She was paying $300 to a debt consolidation company in order to pay old credit cards.  With rent of nearly $600, she was left with only around $200 per month. These seniors were scared, couldn’t afford to pay their old debt and didn’t know what to do.

They are not alone. The Kaiser Family Foundation recently reported that nearly half of American seniors have incomes within 200% of the poverty line. “It is increasingly common for older Americans to carry debts into their retirement years, and consumers living on fixed incomes often struggle to pay off these debts,” said Consumer Financial Protection Bureau Director Richard Cordray, in a report issued by the CFPB in November 2014. The CFPB also reported debt collection was the top complaint for older Americans, many of whom said they struggled with debt in retirement.

I am the Executive Director, of HELPS, a nonprofit law firm that assists seniors, who have debt they can’t afford to pay. Many go without basics struggling to keep up with their old debt.  Others stop paying and are harassed unmercifully by collectors.  Then there are others who seek out the internet wild west of debt settlement companies.  When they enroll with one of these companies, they are never told, “by the way, all your income is protected and doesn’t need to be used to pay your old debt.”  Instead like the widow I spoke with, many are saddled with payments that place them in utter poverty.  

There is one very important fact that all seniors need to know. That is, that their social security, pensions, personal retirement, disability, VA benefits and even  income from a little job ($217.50 net per week),  is protected from collection by federal law.  It can’t be garnished or taken by collectors.  Their income can be used for its intended purposes –meeting seniors’ basic needs such as food, housing and medication.  Society does want seniors going without their basic needs.  That is why this income is protected.

Even when they understand their income is protected, when seniors stop paying their old debt, collectors call and send demand letters. Seniors sometimes try to ignore the collection calls and letters.  However, the stress caused by constant collector contact make can make their lives miserable.  Seniors sometimes consider filing bankruptcy.  However bankruptcy is often an unaffordable and unnecessary option for a senior, who has income already protected by federal law.  As an attorney for nearly 40 years, who filed tens of thousands of bankruptcies, sometimes I have likened filing bankruptcy for many seniors, to like using a sledge hammer to kill a gnat.

Seniors have other options. The federal Fair Debt Collection Practices Act provides that a consumer may request, in writing, for a third party collection agency to stop further contact by phone or mail. This request is commonly referred to as a “cease and desist” letter. The law applies to collectors, not original creditors.  However even original creditors normally stop phone contact when they get this letter. Cease and desist letters can be found on the internet.  HELPS, a nonprofit law firm, has a cease and desist letter available for free download on its website, www.helpsishere.org.

Even knowing this, many seniors are simply unable to deal with their creditors themselves. Federal law also provides that when a person is represented by an attorney, collectors can no longer contact that person, but can only communicate with the attorney.   That is what HELPS does.  HELPS is a nationwide 501 c nonprofit law firm that represents seniors and disabled persons,  in order to receive collector communication.    HELPS sends letters to collectors instructing them to stop contacting the senior and contact HELPS instead.  HELPS represents seniors on an ongoing basis, years into the future, so they never have to deal with collectors again.  HELPS never turns away any senior or disabled person that needs this help.   More information is available at www.helpsishere.org or by calling toll free 855-435-7787.

Seniors want to pay their old debt. However sometimes they simply are not able.  When seniors learn that their income is protected and are given the means to stop collector harassment, they can elect to use their income for the food and medicines they need.  And like the couple and widow I spoke with, peace can return to their lives.

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About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.