Legal Question in Credit and Debt Law in Pennsylvania
credit card debt
I have a 60 year old disabled family member who is retired.They have over $20,000 in credit card debt from several credit card accounts. Many of the accounts have been closed for several years. They are still recieving collections phone calls regarding these accounts which doubled because of interest & fees. My family member is on a low fixed income. Do they still have to pay these creditor? Their home is paid for, but don't have any other assets. Can a lien be put on the home?
2 Answers from Attorneys
Re: credit card debt
The credit card debt can result in a lien if there is a law suit and a judgment entered. I suggest that you seek legal counsel. Your relatives may want to put the property in someone elses name to protect them from collection. If I can be any assistence, let me know. Gerald Hershenson 215-579-9390
Re: credit card debt
When someone is in a situation in which it is difficult or impossible to repay debts, there are several options. One is to negotiate with the creditors. However, that is time consuming, uncertain and possibly pointless if you do not have the ability to pay them. The second option is to ignore the debt. The creditors will hassle you, possibly sue you and could seize your assets and bank accounts. The third option is bankruptcy.
There are two types of bankruptcies for consumers, Chapter 7 and 13. The former is generally for those who simply require the elimination of unsecured debt such as credit cards. The latter is generally for those who have fallen behind in secured debt such as a mortgage. Chapter 13 allows you to repay any arrears over five years.
In each case, the filing of the bankruptcy creates what is known as an automatic stay. That prevents any creditor from taking any action whatsoever. They cannot call you, write you or sue you. Moreover, once a lawyer is retained, you can tell anyone who contacts you to contact the lawyer and that should provide you with some relief. Ultimately, when you receive a discharge order, the automatic stay becomes permanent.
There are exemptions which protect certain assets. There is a $17,000.00 homestead exemption. If the house is worth much more than that, Chapter 7 would be problematic. In that event, Chapter 13 may be the only viable option.
If the creditors are not paid, they can sue and obtain a judgment. A judgment will in turn create a lien. That may be the worst that happens.
Please feel free to contact me via e-mail or by phone at your convenience so that I can learn more and properly advise you.
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