Q.  My wife and I have about $10,000 in credit card debt that we struggle to pay each month. Our incomes are very modest and all from Social Security and my work Pension. Is there any way that we can legally avoid paying this debt without dire consequences?

A.  Very likely, yes. Generally speaking, income from Social Security, work pensions, VA Benefits and disability income is protected, by federal law, from collection by non-governmental creditors. If these are your sources of income, you could very well just stop paying and you would still receive your full incomes each month. Indeed, it is not a crime to stop paying a bill, especially if continuing to pay would deprive you of the basic necessities of life. Many seniors are both surprised, and relieved, to learn of this.

Although your creditors may be aware that these source of income are exempt from collection, some may nevertheless attempt, by repeated phone calls, to coerce you into paying these uncollectible bills.  You can easily put a stop to this. Under the federal “Fair Debt Collection Practices Act”, you may send a letter to your creditors demanding that they cease all further efforts to communicate with you by mail or phone. The creditors must then immediately cease all further communication. Such letters should be sent Certified, Return Receipt Requested, so you have proof of mailing. The creditor then has the option of writing off the debt as uncollectible, or filing a lawsuit to obtain a judgment. Unless the debt is large, many creditors just write off the debt and close their file.

What if one of your creditors opts to file a lawsuit and obtain a judgment? Answer: They still will not be able to go after your income if it is from one of the sources mentioned above. True, if you own a home, they could obtain a judgment and record a lien against your home. But, even then, that is usually not as bad as it sounds: attempting to collect a judgment by foreclosing on an individual’s home is a cumbersome and expensive process, and most creditors would prefer to just record the judgment and then let it just sit there, accruing interest, to be paid out of escrow only when you someday sell or transfer your home or borrow against it.

There are some exceptions to the above: if you owe money for unpaid taxes or other obligations to federal agencies, such as unpaid student loans, they may garnish up to 15% of your social security income. But, even here, there are options  to avoid collection, upon a proper showing that you need all of your income for your basic necessities.  Another exception is unpaid child or spousal support.

Before deciding upon the best plan in your case, it would be wise to seek legal advice.  To aid you, there is a very low cost resource available to low income seniors and the disabled. It is a non-profit law firm called ‘Help Eliminate Legal Problems for Seniors’ (“HELPS”).  For a very nominal monthly fee, based on a sliding income scale (which can be as low as $5/month, or even for free), they will counsel you, call creditors on your behalf, and help you write “Cease and Desist Letters”. You may contact them for assistance on line at www.HelpsIsHere.org or by calling 1-855-435-7787.