Question:
Dear Steve,
Dec. 19, 2016 my husband died after a 6 year battle with Stage 4 Colon Cancer. Railroad Retirement did not pay anything close to what my husband told me to expect and since he was so sure it was so good he never considered an Insurance Policy, as he also insisted he would “live to be 110 years old – give or take 10 years.”
Upon his passing “our Family Income” (just me left) dropped by over $3000/mo. When it looked like I would not be able to keep up with all the debt, I went in to speak with my bank, Wells Fargo, about a Debt Consolidation Loan – they were sorry, but the “Board” would not approve the loan, same for Discover. Regardless of what Banks would or would not do I had to sell our 12 yr old home/property in Florida for huge loss, but I was offered to move to my sister and brother-in-law’s property in Tennessee, which I did.
It had taken 5 months to get the house ready and sold, not to mention all the “You MUST Repair this or that – and several projects the Buyers ‘Home Inspector’ said had to be done were found to be erroneous (turns out he was from ALASKA and had not researched “foundations” in FLORIDA) and he was insisting on “corrections” to the foundations of the Deck and Handicap Ramp, which I had already had repaired.
I rented the largest U-Haul truck in March, April and May along with “loaders” and “unloaders” each time. It was trying and outrageously expensive – turns out a Professional Mover would have only cost just over half and all the damage, if any by Professionals, would have been covered.
I knew I would need some time to get settled and planned to get a job to start to whittle down the debts beginning Spring 2018. I recently paid off the last of Virlyn’s few Dr’s Bills and was paying more than the minimum to each creditor, but on August 17th, 2017 I had a fall at home which stopped preparations on the property here. I thought it was only going to be a few weeks, but it was Dec 2017 and after seeing several Drs, it was determined to be an impinged nerve in my neck.
Was told one or two Cortico-Steroid shots into the Cervical Vertebrae would probably fix me up for several years and I would be able to have additional shots in the future if necessary. My daughter took me to the first one on Jan. 17th, as I had been told I would be unable to drive for at least 24 hours, and 22 minutes after leaving the Dr’s Offices we were rear-ended by an 18-wheeler at a light coming off the I-40 in Cookeville, TN.
After the ER, Exam and Xrays, I was sent home with pain relievers and muscle relaxers. The Dr tried another shot 2 weeks later, which did not do any good. The accident had further damaged the neck and moved bone spurs leaving the only alternative ACDF Cervical Surgery on March 6th.
In surgery Dr Cruz found the spurs had changed position, the vertebrae were soft, and the Titanium plate necessary to keep the two cadaver bones in place would be fragile as the screws could be displaced by a fall, sharp knock to my head or back, etc. which would allow movement of the cadaver bones replacing the damaged discs that could sever my spinal column.
I now knew I would not be able to go back to work as I was restricted from being on ladders, needed to use steps as little as possible, stay off uneven ground and avoid walking around obstacles or into anything and not lift or carry more than 20 pounds. No company was going to hire me now as the Liability would not be acceptable. Lowe’s where I had been a Cabinet Project Designer in FL, found me loading In-Stock Cabinets and Counter-tops, even using what we called a “Cherry Picker” to go up and “pull Stock”, which would weigh anywhere from 20 to well over 90 pounds. So, even a job I had loved and would likely have been able to get at one of the stores within 60 miles of Spencer, Tennessee would no longer be one I can do.
I continued to pay more than the minimum on the debts by using the Credit Cards to live on and my income to pay the cards, occasionally taking funds from what little I had in savings. In late January I looked into Bankruptcy, spoke with an attorney who recommended Chapter 7 due to my age and the amount of debt.
I again looked into Debt-Consolidation Loan Companies who wanted instead to do Debt Reduction that would then be impossible to do. I have $973.94 a month to spend on groceries, prescriptions, toiletries, fuel, vehicle maintenance, phone and computer maintenance as needed, plus a little to put away for any emergency, and form my Shih Tzu – food, Vet, medicines, etc., and Salvation Funding ONLY wanted me to pay $721.19/mo. for 52 months to “resolve my debts.” I had to quit paying on the cards in February as I had maxed them out and there was nothing to live on if I continued to pay even the minimum payments.
The Interest Rates are near 30% and that was even when I was paying more and consistently on time – Wells Fargo was the first and worst after telling me originally I could have 0% for 12 months and 12.4% there after – they changed the interest rate to over twice that at the end of the 0% period and raised it again -while I was still under the Credit Line and on time with over the min payments.
I am past due on non-secured debts in excess of $54,000. As a Widow of a Railroader my only income is Railroad Retirement/Social Security plus $32/mo from my husband’s BNSF RR Pension. After paying Rent, Utilities, Health, Life and Auto Insurance, etc., I have blessed little left.
I should be receiving a settlement from a vehicle accident, but it may take 7 to 13 months or more, can I offer to split up to 50% of that with them and have them leave me alone until I receive the payout or just tell them to sue me – who has nothing more than my 2012 car, which I have to keep as my Dr is 65 minutes away, and I live in a rural area where the nearest store, pharmacy, bank, etc. are all 40 plus minutes away? I truly do not know what to do.
K-Lee
Answer:
Dear K-Lee,
Salvation Funding again. Salvation Funding appears to be offering debt consolidation loans but their site is a little light on details. – Source
From everything you’ve described, I would be hard-pressed to recommend any other solution other than bankruptcy. It seems on face value to be the most logical solution given your unfortunate set of misfortunes and circumstances.
Logically the path at this point would be to reset your debt, by eliminating it, and then regroup your finances to fit within your current income. It sounds as if your income would be protected from garnishment because it is benefit income but let’s explore closing the door on the old debt so you can focus on a less stressful future.
You can find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you. Bankruptcy is the fastest way to get a fresh start for the least amount of money.
Steve Rhode
Get Out of Debt Guy – Twitter, G+, Facebook
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This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.
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