Dear Joe,
The debt collectors won't stop calling my phone number. Fortunately, the calls aren't for me, but for someone who USED to have my phone number. My usual response is to tell them that I'm not the person who they seek, and that if I knew who she was, I'd turn her in so quick it would make her head spin. The list of companies looking for "Jessica" is impressive: everything from car loans to credit cards to payday loan places. I've even started getting calls for debt reduction services. They drop me pretty quickly because I don't have at least $4,000 in credit card debt.
This gives me a view of most people's economic reality that I didn't have before. My mother explained how to write hot checks when I was four, and that shaped my view on money: live within my means. Of the four apartments on my floor, one neighbor has been evicted and the other two have gotten late rent notices at least once since July. I know this only because the management tapes the notices to the door of the apartment.
There is a widespread perception that people cannot file for bankruptcy anymore as a way of having their debts discharged. It is harder to get a "fresh start", but not impossible. I tell people that if they make more than the median income for their state, they will have to go to a payment plan rather than having the debt discharged outright. If they make less, they can have the debt discharged outright (subject to some exceptions). The limits are higher than people think. The range is $48,929 to $89,608 (from one to four or more people) in Maryland and $45,143 to $77,430 in Virginia. Add $6,300 for each person in the household in excess of four. A friend of mine who is a bankruptcy lawyer usually has his customers charge his fee to the credit card of their choice.
I expect debt collectors to get more aggressive as time goes on. I'm learning about my protections under the law not because I owe money, but because I expect Jessica's debt to be sold for cents on the dollar to some other collection agency. Most people don't understand that filing for bankruptcy STOPS the collection actions, so it's worthwhile for the debt issuers to allow people to continue to believe that they can't have the debt discharged or terms modified.
Elizabeth Warren, a co-author of The Two-Income Trap, pointed out to bankers that if they didn't lend to the 20% most risky borrowers, they would eliminate their loan losses. Unfortunately, those high-interest, high-default risk borrowers is where their profits are.
Sincerly yours,
Joanne
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Joanne,
Regarding: "My mother explained how to write hot checks when I was four ... "
You wouldn't be willing to share your mama's phone number would you? I'm leaving for Belize, Central America in January, and I need a cast iron reason not to come back.
Joe
