Legal Question in Credit and Debt Law in Massachusetts

repayment options

Thank you for your response to my posting (below). I want to avoid bankruptcy. I feel obligatedand have made progress. Are there other ways I can repay this debt? Can I consolidate into a student loan I currently have?

I went through a difficult period 5 years ago, resulting in some substantial credit card debt. I had a very traumatic experience on the phone with a debt collector at the beginning of this ordeal and have avoided all contact with them since. I have been fortunate enough to have been offered some settlements which I have paid. There is one particular company that has not offered me a settlement that I can afford to date. I just recieved mail from them indicating a pending law suit. What does this mean? Will I literally be ased to appear in court? Could I potentially have my wages garnished? What about the statute of limitations? I also received notification from The National Arbitration Forum regarding a seperate credit debt, stating an award has been made in favor of the claimant and that the case is closed. What does this mean? I do believe I have a moral and financial obligation to attempt to make some payment of these debts. But I do not have a substantial salary and support myself as a single person.


Asked on 10/05/05, 2:12 pm

1 Answer from Attorneys
Raymond P. Bilodeau Law Office of Raymond P. Bilodeau

Re: repayment options

Yes, you can consolidate the student loans, although you just missed avoiding an increase in the interest rate, it was not a huge increase. There are several consolidators, but the consolidator of last resort is the William D. Ford Foundation established by the (federal) Dept. of Education. One plan will allow you to pay according to your income. http://loanconsolidation.ed.gov/borrower/borrower.shtml

I gave you all the options. If the remaining debt is all credit card debt, and you have enough income, you can go to a debt counseling service. They are all created and funded by the credit card industry, and can sometimes get a decrease in late fees and interest rates, but every company can allow different amounts. If you wind up not being able to finish the plan, you will have created "preferences" in bankruptcy terms, and the trustee may be able to get that money back and redistribute it equally (after taking his or her fee, of course). The agencies are supposed to charge only a small fee, as they get paid by the credit card companies for whatever they send on account.

Bankruptcy is included in the US Constitution and comes from Deuteronomy in the Old Testament, which requires the Hebrew people to forgive their debtors every 7 years. It is legal and moral. Your plan may cause you to have a bad credit score for 7-12 years after you have made the last payment. Bankruptcy stops that and the bankruptcy has to be removed from your report after 10 years. You will get credit card offers as soon as you get your discharge (about 3 months after filing), and can start rebuilding your credit almost immediately.

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Answered on 10/05/05, 3:20 pm


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