Hi, I posted here before and got some good advice. I'm now looking for some help for a client of mine. She is a single mother, disabled (mental illness). Two children under the age of five. She receives Social Security Disability payment totaling $589/mo. She also gets $220/mo in food stamps. Was formerly homeless but now living in the home of a friend with her kids. Has a $135 car payment and insurance payments each month. She's taking classes at a community college to do office work. I started working with her because she couldn't send her disabled child to school because she didn't have diapers for him. Turns out that she is in credit card debt (at least 4-6 cards, owes about $1,500). After being hounded by one credit card company she gave them her bank account info. They overdrew her account (cleaning out everything she had). Now in addition to having no money, the bank is charging her a $35 fee every five days for the overdraft (about $150 in overdraft). So she's getting deeper in debt every day. First, I can't understand how someone in her situation was given credit cards (no earned income other than the social security). She lives in MA. I went to the state consumer department and got the name of two reputable credit counseling agencies. Is this the best way to go? Will they actually help someone who can't afford to pay any fees? This woman is very limited mentally. I'm going to have to walk her through this process. Does having a disability provide her any protection from creditors? Any ideas of how to help her out? Thanks so much for any advice you can offer.
Wow, this is a heartbreaking story, and I'll help however I can. I assume the goal here is to stop the bank charges, and somehow handle the debt situation. First, the bank overdraft has to be handled, call the bank and ask to freeze this transaction, state possible fraud due to collection agency taking funds. Do the SS checks go direct deposit to this account? So, we need to stop the NSF charges. I think dealing with a supervisor at the bank will take care of this. Next, an assessment of the debt situation needs to be done, ensure you have ALL the debts accounted for, and you have all the statements. If these are going into collections, then details on the collection agencies is needed. I am certain a work out can be reached with the creditors given the circumstances. Having a disability does not readily give protection from creditors, though it can be used as a negotiating tool. I would have to investigate some laws, especially in MA. Action steps: 1) Please post, or private message me the names of the credit counseling services given to you, so as to verify if they could help. 2) Please update on the bank overdraft situation (latest balance, amount overdrawn, anything else of information) 3) Detail credit card companies, and degree(s) of late statuses, We can stop the harrassing via documents to "Cease and Desist", and hold off the "scare tactics". We can probably advise on the bank situation and help negotiate the fees, and maintaining the account. Considering her state, she may have to go to a "cash only" method, or use "gift cards" that do not allow overdraft. Is there anyone who can help her on day to day activities? Let us know, it burns me to hear of a company taking advantage of a challenged person like this, I'd love to deal with them myself!
Thanks so much, Bizwiz. Consumer Credit Counseling Service of Southern New England is recommended at state gov't websites for both MA and CT. Here's the link: http://www.creditcounseling.org/AboutCCCS/Default.asp I have an appointment with this woman Monday. She will be bringing her bank statements and credit card statements. I will get all the other information you requested. The first thing we will then do is contact a supervisor at the bank about the NFS charges, per your suggestion. I will also let them know that I am working with her to get her credit counseling to get the debt situation under control. I agree that it is sickening how the weak and vulnerable in our society are preyed upon by the financial industry. I see it all the time--from check cashing "services" to rent-to-own loansharking. I'll post after my meeting with her. Thanks again!
I would "alert" the bank that this may have been a "fraudulent" transaction (and requires investigation). My suggestion is to keep "elevating" this request if you do not make any progress with the first person you speak to.
How is it "fraudelent" if she gave the credit card company her banking information?? That was her mistake there.
First, it may be "possibly" fraudelent; if she gave her bank account information based upon tactics used that were in violation of the FDCPA. Also, I don't mean this to be taken the wrong way, but I have a strong feeling there were indications that this person was challenged. Hence, the consumer may have been taken advantage of by not being able to comprehend the situation as presented, or consequences of their actions. There are a myriad of other details that may be in play here; we do not know all of them, but my "gut" tells me the CC company pushed their advantage here. My further take on this situation is that the CC company would not like to stand in front of a judge and recant their actions, and reasons why for the actions!
Bizwiz, I met with this woman today. She told me that her social security check is directly deposited into her bank account. She gave her account number to Chase and Best Buy because they had really been harrassing her and she was scared. She brought in the notice from the bank and she is being charged $35 every five days in overdraft fees. Best Buy and Chase are going to withdraw from her account every month (again, I think she agreed to that). I told her the first thing she should do to open another bank account and have her social security check deposited to the new account. We then went online and started the process for credit counseling. She didn't have enough paperwork with her so we are going to continue tomorrow. Basically, this woman is about $8,000+ in credit card debt. She also has a $125 monthly car loan. I asked her how she was able to obtain so much credit with only $598 monthly income, and she said she didn't know. She said that once she got her car loan and made her payments for about a year she started getting lots of offers for credit. She is well aware that she made a big mistake by using the credit. I thought we'd wait until she gets assigned a credit counselor before going to the bank. I'm thinking the bank might be more willing to waive/negotiate the overdraft fees if they know she is serious about cleaning up her debt problems. I don't know much about what credit counseling services do for people, but I'm wondering how anyone with so little income/assets can get out of this kind of debt. Yes, she is limited. Multiple mental illness diagnoses. Difficulty effectively communicating/advocating for herself. Was telling her to change her direct deposit to a different bank good advice, or could she authorize the bank not to allow those creditors access to her account? Thanks!
First, it was good advice to open a new account, and change her direct deposit of SS checks. But..she will need to move fast to open a new account, as the bank will report this NSF incident, which could prevent opening a new account! Second, I wouldn't wait to speak to the bank, you need to stop the NSF charges ASAP. Find out the exact amount required to bring the checking account out of negative (including fees), and date of last NSF charge posting. Perhaps there is a local resource to borrow the funds from (i.e church, local welfare office, etc.) until the next SS check. Third, I would STOP authorization of "autowithdrawal payments", pending the credit counseling. She can do this, and it may get a bit messy with Chase and Best Buy, but there is probably time before the next withdrawal. Fourth, a monthly budget needs to be set up for this woman. The credit counseling firm will look at this also. A financial review of her condition needs to be done. Please PM me with the details, I would like to see what I can do to help her (and you).
