Protect your<br />income & Assets<br />“Don’t Get Caught Singing the Blues”<br />An assortment of brief articles on relevant topics for those concerned about losing their social security, other retirement benefits and assets.<br />Compiled by Paul Shipp<br />Managing Attorney<br />of the Flint Hills Offices of Kansas Legal Services<br />Table of Contents<br /> TOC o "
h z u Elderly Americans Increase Use of Credit Debt PAGEREF _Toc241306790 h 4the statistics PAGEREF _Toc241306791 h 4Chapter 13 Bankruptcy PAGEREF _Toc241306792 h 5Chapter 7 Bankruptcy PAGEREF _Toc241306793 h 5The Fair Debt Collection Practices Act PAGEREF _Toc241306794 h 6What debts are covered? PAGEREF _Toc241306795 h 6How may a debt collector contact you? PAGEREF _Toc241306796 h 6Can you stop a collector from contacting you? PAGEREF _Toc241306797 h 6May a debt collector contact third parties? PAGEREF _Toc241306798 h 6What must the collector tell you about the debt? PAGEREF _Toc241306799 h 7May a debt collector continue to contact you if you believe you do not owe money? PAGEREF _Toc241306800 h 7What types of debt collection practices are prohibited under the Act? PAGEREF _Toc241306801 h 7Protect Your Social Security PAGEREF _Toc241306802 h 8A sad story PAGEREF _Toc241306803 h 9Federal law protects your social security income PAGEREF _Toc241306804 h 9What can I do? PAGEREF _Toc241306805 h 9Kansas Law protects other assets from creditors PAGEREF _Toc241306806 h 10Real Estate PAGEREF _Toc241306807 h 10Personal Property PAGEREF _Toc241306808 h 10Insurance & Annuities PAGEREF _Toc241306809 h 10Pensions & Retirement Plans PAGEREF _Toc241306810 h 11Public Benefits & Entitlements PAGEREF _Toc241306811 h 11Beware of Financial Exploitation PAGEREF _Toc241306812 h 11Who are the exploiters? PAGEREF _Toc241306813 h 11Banks sometimes don’t report exploitation for fear of being sued PAGEREF _Toc241306814 h 11If it sounds too good to be true, it’s not PAGEREF _Toc241306815 h 12Protect your identity check your credit report PAGEREF _Toc241306816 h 13Elder Abuse; More Likely to Occur In the Home PAGEREF _Toc241306817 h 13Institutional abuse is rare PAGEREF _Toc241306818 h 14Abuse in the home is more common PAGEREF _Toc241306819 h 14An example of abuse in the home PAGEREF _Toc241306820 h 14Your Remedies! PAGEREF _Toc241306821 h 15APPENDIX PAGEREF _Toc241306822 h 17Letter to Creditor PAGEREF _Toc241306823 h 18AFFIDAVIT AND NOTICE TO JUDGEMENT CREDITORTHAT ONLY INCOME IS SOCIAL SECURITY PAGEREF _Toc241306825 h 19<br />Elderly Americans Increase Use of Credit Debt<br />According to AARP, there has been and will continue to be a dramatic increase in the number of elderly filing for bankruptcy. A reason for the increase in bankruptcy filing among the elderly revolves around the standard of living and how much longer the elderly are living. In other words, even though the physical well being of most elderly Americans has improved, one of the direct results has been a significant decrease in the overall financial health of older Americans, as more money is needed over a longer period of time.<br />the statistics<br />Most elderly who file for bankruptcy have two main characteristics: 1) very low incomes and 2) substantial credit card debt. Many who fit into the category are widows living alone whose main source of income is Social Security; about 50% of those described own their homes. The most shocking statistic is that only about five percent reported medical bills as part of their debt. This means that the elderly are taking on more and more unsecured debt to make ends meet. One study illustrated that in the previous decade there was a 217% increase in the amount of credit card debt in the elder population, thus an increase in bankruptcy filings. Some have speculated that with the change in financial regulations requiring credit card companies to require its clients to pay at least 4% of the balance owed on their debt instead of the usual 2% means that some Americans will have credit card minimum payments double. If a widow is living on a fixed income and can only afford to pay $40 (2%) per month on a $2,000 balance, she will soon find herself in financial straits when the minimum payment increases to 4% of $2,000, or $80 per month. Fortunately, the new requirement to pay 4% instead of 2% of unsecured, outstanding balances will cause balances to go down more quickly and the doubled payment will decrease over time, so long as it is paid on time for a few months. Some fear that with the changes in minimum payments, that bankruptcy filing will continue to increase, and coupling that with the recent changes in bankruptcy law that it will be more difficult for the elderly to file for bankruptcy, and get out of the quagmire.<br />The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 changed bankruptcy law. The act went into effect on October 17, 2005. Before the act was signed into law many criticized the Bush administration, arguing that low-income, elderly persons with high medical costs would be hard hit by the new means test required under the new law. The AARP provided a publication for Elder Advocates and concluded that the criticisms were unfounded after a "
of the act. The only persons affected under the new bankruptcy law will be those who have incomes above their state's median income, and they will be required to pass a means test before being allowed to declare bankruptcy; otherwise bankruptcy continues to be a viable option. <br />There are primarily two types of bankruptcy available to consumers, Chapter 13 and Chapter 7; Chapter 11 bankruptcy is usually used only for businesses.<br />Chapter 13 Bankruptcy<br />Chapter 13, which has also been known as a wage earner's plan, is used by about 25% of consumers. In Chapter 13 consumers work out a periodic payment plan with their creditors to pay off their debts, or at least substantial portions of the debt. Generally the creditors expect to get more than they would have received from the debtor's estate if the debtor had sought a complete liquidation under Chapter 7 Bankruptcy. One of the important benefits of Chapter 13 is that the debtor generally can continue to live in his or her home so long as the debtor complies with the terms of the Chapter 13 arrangement. If the debtor fails to comply, the Court treats the matter as Chapter 7 liquidation. The disadvantage of Chapter 13 to the debtor is that the debts can linger for years, burdening future income.<br />Chapter 7 Bankruptcy<br />Chapter 7 is the bankruptcy provision most frequently used by individuals. It involves the complete liquidation of a debtor's property, with the proceeds used to pay off the debts. However, the debtor can retain certain property that is specifically "
under his choice of Federal law or her State's law, such as tools of one's trade, limited equity in a car and house, and some personal effects. If you use Chapter 7, you may lose your home (depending on your state) but it does enable you to get out from under the burden of debt more quickly. <br />The secret is to beware of the pitfall of unsecured debt and avoid it like the plague, however, if you find yourself in financial straits, be aware that bankruptcy is still an option.<br />The Fair Debt Collection Practices Act<br />If you have bad debts you still have rights. Your creditors must still treat you with dignity and respect. Your creditors are required to follow the rule of law in collecting any debt that is owed. The Fair Debt Collection Practices Act prohibits debt collectors and collection attorneys from using undue harassment and other unethical practices when collecting a bad debt. <br />What debts are covered?<br />Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for credit cards. The Act does not cover debts owed to the government, such as taxes. It also does not apply to spousal or child support in family law cases.<br />How may a debt collector contact you?<br />A collector may contact you in person, by mail, telephone, or fax. However, a debt collector may not contact you at unreasonable times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves.<br />Can you stop a collector from contacting you?<br />You can stop a collector from contacting you by writing a letter (example is included in this packet in the appendix) to the collection agency telling them to stop. Once the agency receives your letter, they may not contact you again except to say there will be no further contact. The agency may notify you if the debt collector or the creditor intends to take some specific action, like selling the debt or bringing a law suit to seek a legal judgment against you.<br />May a debt collector contact third parties?<br />If you have an attorney, the debt collector may not contact anyone other than your attorney. If you do not have an attorney, a collector may contact other people, but only to find out where you live and work. Collectors usually are prohibited from contacting such permissible third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.<br />What must the collector tell you about the debt?<br />Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.<br />May a debt collector continue to contact you if you believe you do not owe money?<br />A collector may not contact you if, within 30 days after you are first contacted, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.<br />What types of debt collection practices are prohibited under the Act?<br /><ul><li>Use of threats of violence or harm against the person, property, or reputation
Publishing a list of consumers who refuse to pay their debts or advertise your debt (except to a credit bureau) or give false information about you to anyone
Repeatedly using the telephone to annoy someone or telephone people without identifying themselves
Falsely implying that they are attorneys or government representatives or misrepresent the involvement of an attorney in collecting a debt
Falsely implying that you have committed a crime and will be arrested if you do not pay your debt
Giving a false name when they contact you or falsely represent that they operate or work for a credit bureau
Misrepresenting the amount of your debt or claim they will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so
Indicating that papers being sent to you are legal forms when they are not or indicate that papers being sent to you are not legal forms when they are or send you anything that looks like an official document from a court or government agency when it is not
Claiming that actions, such as a lawsuit, will be taken against you, which legally may not be taken, or which they do not intend to take.
Collecting any amount greater than your debt, unless allowed by law