WRITTEN BY: JOE PYE
From 2000 to 2004, Steve Abraham spent his life savings caring for his dying brother. When Abraham’s brother got sick in 2000, he left his job to take care of him since they were the only family each other had. Fifteen years later, Abraham was saddled with $30,000 in credit card debt, and credit card companies started to call.
“The bills kept mounting up – I couldn’t handle it anymore,” Abraham said. “I was going to file for bankruptcy.”
Abraham began researching bankruptcy attorneys to find it would cost him thousands of dollars that he didn’t have. But by luck, Abraham found another kind of attorney, one with 38 years of experience and with more interest in saving seniors money than selling them on debt management services or bankruptcy they don’t need.
HELPS is here
Eric Olsen is the executive director of a nonprofit law firm called HELPS (Helping Eliminate Legal Problems for Seniors and Disabled) that’s been around eight years. A consumer protection law called the Fair Debt Collection Practices Act states it’s illegal for a collector to contact someone knowing they have attorney representation. HELPS provides that legal shield for seniors for a small, affordable fee based on their income.
More than 3 in 10 seniors have credit card debt, typically adding up to anywhere between $1,150 and $2,300, according to a 2016 report from nonprofit organization The National Council on Aging. Research published from the National Bureau of Economic Research shows the 65-and-up demographic is the fastest-growing population segment in terms of bankruptcy filings. The number of people over the age 65 filing for bankruptcy has increased more than 200% since 1991. The main reason for those filings is credit card interest rates and fees.
Many of those seniors don’t need to – and likely can’t afford to – file bankruptcy. Abraham said it would’ve cost him $1,000 to $2,000 that he didn’t have. The cost to file Ch. 7 bankruptcy can range from $500 to $3,500 and Ch. 13 can cost up to $6,000.
Certain retirement, disability and Veteran benefit incomes, and assets are legally protected from creditors under the Fair Debt Collection Practices Act. While practicing bankruptcy law for nearly four decades, Olsen advised impoverished senior clients not to file because most of their income is protected from debt collectors.
“I’d tell them creditors can’t do anything to you,” Olsen said. “But when they got home the creditors would call and make their lives miserable.”
How to keep a creditor quiet
Most seniors don’t know certain income and assets are protected or that affordable legal aid is available. Abraham owed $30,000 spread over 14 different credit cards, some with interest rates as high as 24-30%. The 76-year-old is living off of $1,739 in Social Security and pension every month with $1,000 rent. To keep himself fed, there’s no way he could afford the credit card payments. Abraham was proactive when his creditors began calling and sending letters for payment. By doing so, he was never contacted by a single debt collector.
“HELPS sent letters telling them I was judgment proof and don’t have the income to pay the debt and to not contact me,” Abraham said. “It avoided me from getting any harassing calls or letters.”
HELPS’ clients have lifelong legal representation in all 50 states from its team of four consumer debt attorneys and a team of paralegals. It’s been nearly a year since Abraham contacted HELPS. He rests easy at night knowing five figures worth of debt is no longer haunting him.
“I can tell from my credit report that all of my credit card accounts have been charged off,” Abraham said. “I haven’t heard a peep from a creditor or their agencies.”