Mental illness, debt, and me!

December 27, 2010 10:23 AM

Have bipolar. Getting better. No employer. Debt collectors. Help!

I've been suffering from mental illness for years, with the swings being extreme enough to prevent me from seeking gainful employment. I was fortunate enough this year to finally happen upon the proper combination of medication to stabilize my mood.

In the meantime, I've accumulated debt. About $10,000 of it, often due to irrational spending sprees. I'm willing to own up to my errors, but I've been too overwhelmed to know where to start.

I'm now over two months past due on nearly all of my accounts. Creditors and collectors have been contacting me, but I haven't picked up and have been too anxious to listen to their messages. The one creditor that I did get in touch with asked me to pay a third of the balance on the spot, which I'm presently unable to do.

Prior to this, I was able to stay current by making slightly above minimum payments to the accounts. I've now run out of funds to even continue this approach. I am fortunate enough right now to be financially supported by my family, but they aren't able to help out with this.

I'm starting to look for a job now that I've stabilized, but the stress and pressure of this has dragged me down.

What can I do to get this dealt with? How can I get some breathing room? I've read a bit about consolidation and settlement, but my understanding is that I'd actually need funds to pursue either.

Is there anything I can do in my current position to stop the calls, short of landing a job?

Throwaway: [e-mail]

posted by anonymous to work & money (8 answers total)

You can do what I did - ignore them and they will eventually stop calling you. Seriously, you don't have to answer the phone, nor do you have to listen to their messages. Delete the messages without listening to them. They are not allowed to call you at work (not that this is a problem, but it can be when you start working), after certain hours, or on the weekends. If they're doing that, it's harassment; call them on it and tell them to stop.

If that doesn't work, change your number and don't list it.

Once you have a job, pull your credit report and work out a way to pay them off. Until then, put them out of your mind with the knowledge that you will pay them when you have the wherewithal to do so.
posted by patheral at 10:31 AM on December 27, 2010 [2 favorites]

Assuming you're in the US: You can stop the debt collectors from calling, at least, by sending them certified letters demanding that they contact you only by mail. Instructions on how to do that are here.

Once you've done that, contact the National Foundation for Credit Counseling for leads on legitimate help with addressing your debt issues.

Of course, you may be in Canada or Australia or New Zealand or somewhere else where the currency units are dollars, in which case I got nothing. Maybe clarify that with a mod?
posted by Sidhedevil at 10:34 AM on December 27, 2010 [1 favorite]

As a reality check, $10k in consumer debt is not that big a deal. Once you get a job (and if family continues to support you), you could pay it off in six months.

The best thing to do is to contact each of your actual creditors (as opposed to bill collectors) and let them know what the situation is, and when you might be able to pay them. Figure out what your minimum payment is, and then get some sort of joe job (washing dishes?) that allows you to meet these responsibilities each month until you get a "real" job.

Still, $10k isn't much in the grand scheme of things, although it will be tough to pay it back until you have that job.
posted by KokuRyu at 10:59 AM on December 27, 2010

The one creditor that I did get in touch with asked me to pay a third of the balance on the spot, which I'm presently unable to do.

Just to give you some insight into what is going on, you have been sent to collections at this point, which means that your original creditor (like your credit card company) has basically decided that you are most likely not going to get back to being current on your debt and has probably farmed your debt out to a specialized debt collection business. So if you had a $5,000 balance on a credit card, your credit card company might have sold the right to collect your debt to a debt collection business for $1,000, so that they can just write it off as a loss and avoid spending money trying to collect from you. The debt collectors don't really care about getting the full amount back, they just want to spend as little money as possible to get you to pay them as much as possible. One of the cheapest and most effective ways of doing this is to hound you with phone calls. The reason they like a lump sum for part of the amount rather than coming up with a payment plan for the full amount is that they can make a profit without having to spend any more money on you.

Is there anything I can do in my current position to stop the calls, short of landing a job?

Here's a FAQ from the FTC about what creditors and debt collectors are allowed to do which should give you an idea about your options. For stopping phone calls specifically, you can send them a letter like this (source), as mentioned in the FAQ I linked to.

Your credit rating will have suffered from this, and you will probably have to pay at least part of your debt back for this to be completely resolved, but you will get through it. Obviously getting a job so you can pay off your debt (and be self-sufficient in general) should be a top priority, but don't let this issue prevent you from getting your life back on track.
posted by burnmp3s at 11:07 AM on December 27, 2010

I've just been reading a bunch about debtorboards, which is a resource for people to advocate for themselves against the bullying of collections agencies and the financial industry in general. Here's an article about debtorboards.

In the US, we tend to think of debt as some personal moral failing, and collections agencies prey on the feelings of shame that go along with that. I hope you can get out from under both that feeling and your debt!
posted by rosa at 11:32 AM on December 27, 2010

If your credit is already fucked and you're not interested in fixing it, you could always just not pay them and ignore them. Not the most ethical thing to do, but it's an option. Your credit will end up even more fucked, but if you're prone to wild spending sprees when manic, it might not be such a great idea for you to have access to credit anyway.
posted by Jacqueline at 6:38 PM on December 27, 2010

My boss is a debt collection attorney, however this is not legal advice. Read up on your rights under the Fair Debt Collections Practices Act. Just Google it. They can only call you during certain hours, can't call your family/friends, can't threaten you, etc.

Personally we are the kind of agency that does not make outgoing calls - we do everything by mail unless the debtors call in to make payment arrangements, call in to pay by credit card, or come in in person. We are not mean and do not think badly of you and will not yell at you (unless you yell at us first! Please stay calm and keep your language clean - we're not trying to punish you and in fact are in a position to help you.)

You don't have to answer when they call, but try calling them. They might be willing to work with you. If you have credit card debt, they might be willing to lower your interest rate quite a bit if you allow them to cancel the card.

Sadly, attorneys like my boss can ask a judge to issue a warrant for your arrest if you continue not to pay your bills, and at that point you will owe legal fees as well and most will require a minimum amount (say, half the total) to lift the warrant. They don't *usually* come out to your house specifically to arrest you on a debt bench warrant around here, but if you get pulled over you'll be arrested. Again, please don't let this scare you... try to work with the companies and if you're summoned to court, attend so you don't get charged with contempt of court.

I know that I owe the hospital some money right now for an uninsured ER visit, and if I were to call them to set up payments, they'd ask me to pay no less than a certain percentage of my total each month. That would be like $75 and I can't afford that. So I send them $20 each month. It keeps my account current, they see that I'm making a good faith effort to pay, and it keeps me out of collections. They haven't called me at all.

KokuRyu: "joe job"

I know it's not what you intended, but Joe job is the name of an email spam technique.
posted by IndigoRain at 8:17 PM on December 27, 2010

You may want to try taking cod liver oil pills or 1000 IU of vitamin D daily. With people staying indoor a lot now days it can translate into low vitamin D levels which from what I've read can lead to depression. Also, some sugar metabolism disorders can use up of all the vitamin D in our systems and cause depression. Try eating heat modified sugars like sweet and sour sauce and stay away from straight table sugar. Sugar Metabolism disorders can also cause muscle weakness because they use up all the bodies available potassium to process it so a supplement of Potassium Gluconate (400 mg works for me) may help. I would love to hear if this helps. MiFi email me. Just saying.
posted by LightnKnowledgeQuest at 5:41 PM on January 9, 2011