I’m Disabled and in Debt: Can I be Sued for the Money I Owe?

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Maybe you were plugging along with a solid debt-snowball plan that was going swimmingly, effectively reducing your overall debt bit by bit before you became disabled. Disability can happen to anyone, at any time, and can come in an endless number of forms. Whether you were in a vehicular accident, had a serious fall, or if you have been diagnosed with a serious illness or disease, the effect on your finances can be simply devastating.

Regardless of the cause of your disability, if you also have a large amount of debt you can’t repay, you may be feeling helpless and afraid of what will happen next. Will the credit card company sue you? Will you go to jail? Will your family be responsible for your debts?

The bad news is that you can be sued for unpaid debts, however, it’s the best kind of bad news you can get. If your disability has caused you to be unable to work, you probably don’t have very much money in your bank account. The good news, then, is that you have no money for your creditors to take, even if they do sue you. You don’t have to worry about going to jail, either, unless your creditor is your ex-spouse and the unpaid debt is child support. Even then, a change in life circumstance (your disability) can be entered into your family court case, which will reduce your support payments while you are disabled. And your family will not be responsible for debts taken out in your name only.

What if I collect Social Security disability benefits?

If your creditor sues you for a debt you owe them, they can have your bank account levied if you refuse to pay the judgement amount (your refusal would make sense if you actually can’t pay it due to lack of money.) However, some debtors do find themselves with at least some money in their bank accounts if they receive payments from Social Security due to their disability. The good news here is that disability funds are exempt from collection by creditors or collection agencies.

For those of you who are receiving disability benefits, it is of the utmost importance that you keep your disability money distinctly separated from any other monies you may receive. It is best to open a new bank account that will only receive deposits from Social Security. If you commingle your Social Security funds with any other funds that may trickle in while you are not working (gifts from family, yard sale money, proceeds from selling stuff on eBay) – you can risk losing some of your Social Security money if a levy is placed upon your bank account(s).

While many disabilities are short-lived, some are not, and still others are difficult to predict. Because of the unpredictable nature of so many disabilities, illnesses and injuries, your best bet is to file a Chapter 7 bankruptcy. This will rid you of the debt that is currently hanging over your head like a dark cloud and will release you from worrying about it. Your ability to focus on healing physically will undoubtedly improve with the weight of your debts lifted.

Your credit rating will take a hit if you decide to file for Chapter 7 bankruptcy in New Jersey. The same is true if you file for Chapter 13 bankruptcy. However, the benefits of wiping out your extensive debts while you’re disabled are much greater than the effects of a lower credit score at this time. Your bankruptcy attorney will be able to help you improve your credit score after your bankruptcy discharge, so that you can get it moving back in the right direction, just as you will be able to improve your mental and physical health without the stress of owing so much money.

Image credit: Alexander Edward

I’m Permanently Disabled: Can My Landlord Evict Me?

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Although the housing market has recently become more attractive due to lower interest rates and down payments, millions of Americans still live in rental properties. Many renters say that they prefer to rent rather than own a property. In fact, Americans paid more than $441 billion last year in rent. Some younger renters say they enjoy renting because of the flexibility it affords them. They can move relatively easily for work or family without the added worry of needing to sell a home first.

There is a subset of renters, however, who would own a home if they could. They may be held back by a low income, bad credit, unemployment or underemployment due to a disability.

As a renter living on a small income or disability check, making rent every month can sometimes be touch and go. There may be months where the rent gets paid a few days late. Some landlords say they are ok with receiving rent payments several days late as long as no month’s rent goes completely unpaid. Tenants who start missing whole months of rent payments run the risk of being evicted.

A landlord has every right to evict a non-paying tenant with only a few exceptions, as long as he does so legally and properly through the court system. If you are a renter and you feel you have been wrongly evicted, there are several defenses you may be able to use against your landlord when fighting the eviction:

  • Landlord changed the locks – If you one day find yourself locked out of your rental with no prior legal notification of being evicted, chances are good that your landlord carried out a “self-help” eviction, which is illegal. NJ landlords must go to court and win their eviction lawsuit with a court judgement before eviction can occur.
  • Landlord missed utility payment(s) – If you are being evicted for non-payment of rent because your landlord did not pay the utility bills and you chose to pay them yourself (while deducting the amount from your rent payment) – you have an eviction defense. If your landlord is required, according to your lease, to pay all utility bills, and fails to make good on that part of the agreement, you may be contacted by a utility company. If you choose to pay the utility bill in order to avoid having utilities shut off, your landlord can’t evict you for deducting the charges from the amount you pay him in rent.
  • Landlord didn’t make necessary repairs – NJ landlords are required by law to provide their tenants with heat, running water, electricity, and functioning sewage disposal. They must also meet all NJ state (and local) housing/health codes. If your landlord has failed to meet these requirements, you can make the repairs yourself or pay to have the repairs completed and deduct the cost from your monthly rent payment. To do this though, you must have evidence that you provided your landlord with sufficient notice that the repair(s) were necessary.
  • Landlord is evicting based on discrimination or retaliation – If you have recently exercised your legal rights against your landlord, he is not permitted to evict you within 90 days of your actions. If your landlord attempts to evict you immediately after you have enforced your rights as a tenant under your lease or under NJ state law, it will be considered a retaliatory act, and is illegal.It is also unlawful and illegal for any landlord to evict you based on discrimination. If you are disabled, and feel you have been evicted solely because of your disability, you may have a claim against your landlord.

If you have received notice that your landlord is already in the process of trying to evict you via the court system, it is time for you to hire an experienced NJ attorney who specializes in real estate matters.

Image credit: Warrnambool City Council