Legal Question in Credit and Debt Law in Pennsylvania
Credit Debt
My mother is 69 years old and has racked up over $40,000. in credit card and personal loan debt. She also has thousands of dollars in medical bills. She is at the point where she has no money to buy food. She wants to declare bankruptcy but doesn't have the attonery fees. I told her to stop paying the creditors and concentrate on the medical bills because the doctors are harassing her for bigger payments and she needs the medical care because she has many medical problems. We live in PA. and she is afraid if she stops paying her bills she will be put in jail. What can she do?
2 Answers from Attorneys
Re: Credit Debt
Pennsylvania doesn't have debtors' prisons. With the medical bills she should qualify for Medicare or Medicaid. If she is paying on $40,000 in credit card bills and other unsecured debt she may want to stop paying on those for a month and pay an attorney to file a bankruptcy instead. Many attorneys will take payments and some will even take payments under a Chapter 13 Plan.
Re: Credit Debt
You asked about bankruptcy.
First, no one can put someone in jail for failure to pay their bill. That practice completely ended in the U.S. by 1912. (It can happen for certain debts in certain states such debts arising from fraud, in child support or alimony, but these aren't applicable here.)
An easy way to accumulate the money to pay a lawyer is to stop paying her bills, all of her bills and save those for a month or two to accumulate the fees. She can also file for in forma pauperis status either by herself of through the attorney to avoid the bankruptcy filing fees. It is easy to deal with those annoying creditors and you can teach her how by looking on the Internet or reading about the Fair Debt Collection Practices Act (FDCPA).
Bankruptcy will generally get rid of all debts existing as of the date of filing (chapter 7) or at least reorganize debts so they are paid at a fixed rate over the next 3 to 5 years and any residual amount is then discharged (chapter 13).
You should find an attorney that will offer a fair price for a fairly simple bankruptcy. There is no reason that someone else can't pay the bankruptcy fees for her and then she can pay them back after the bankruptcy. Technically, such a loan would be discharged by the bankruptcy, but most such familial are paid after bankruptcy out of obligation. There is no law preventing any discharged debts from being repaid but rather the creditors cannot collect or report on the debts. Moreover, the medical creditors must continue care so long as the current payments are paid. Any debts must be completely ignored as of the date of filing.
Regards,
Roger
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