Dealing with Debt

questions & answers

Question: My senior friend cannot pay her credit card debts (her son ran them up and then abandoned her). Her only income is Social Security and her home was inheirited (already paid off when it was inheirited). She cannot afford to file bankruptcy. She quit paying her debts over a year ago- sent them a letter stating that she cannot pay, fixed income etc. One of of the creditors recently sent a letter regarding arbitration. If she does not respond it means she agrees to their terms. I suggested to her that she respond by sending the original letter. Is there a better way to respond? Also, is her home safe from a judgement? I know her income is. I thought I read her home could not be taken. If true, would it require a lengthy court battle?

Answer: This is a serious matter for which your friend needs immediate legal assistance.If an out-of-court payment arrangement cannot be negotiated, your friend should be represented in the Arbitration proceeding. Apparently, the Creditor (credit card company) has rejected your friend's written explanation and is moving to an Arbitration proceeding, rather than a trial, in order to establish a “Judgment”(assuming the Arbitration is “binding”).The Judgment will then allow the Creditor to file a Judgment Lien against the judgment debtor (your friend).in the amount of the Judgment. An Arizona “Judgment Lien” creates a lien against all of the real property then owned or later acquired The judgment creditor can foreclose on its judgment lien and force the sale of the judgment debtor’s property to satisfy the judgment

QUESTIONS

  • My senior friend cannot pay her credit card debts (her son ran them up and then abandoned her). Her only income is Social Security and her home was inheirited (already paid off when it was inheirited). She cannot afford to file bankruptcy. She quit paying her debts over a year ago- sent them a letter stating that she cannot pay, fixed income etc. One of of the creditors recently sent a letter regarding arbitration. If she does not respond it means she agrees to their terms. I suggested to her that she respond by sending the original letter. Is there a better way to respond? Also, is her home safe from a judgement? I know her income is. I thought I read her home could not be taken. If true, would it require a lengthy court battle?

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