Rachel Zemke LAF GOALS Prioritizing bills and debts Understanding how debts are collected Ordering and reading credit reports What do you think of when you hear the word MONEY If DV is about one person using power and control over another learning about money can be a way to ID: 723392
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Slide1
Consumer Issues for Survivors of Domestic Violence
Rachel ZemkeLAFSlide2
GOALS
Prioritizing bills and debts
Understanding how debts are collectedOrdering and reading credit reportsSlide3
What do you think of when you hear the word
“MONEY”?Slide4
If DV is about one person using power and control over another, learning about money can be a way to
take back control
and have power. Slide5
When have you felt powerful with regard to money?Slide6
Asset-based Assessment
When faced with someone in crisis – we tend to focus on the problems/needs.
What does the survivor bring to the table?Slide7
Asset-based Assessment, cont.
Susie is living in shelter, working part-time, and looking for long-term housing. She has a good community of friends in Chicago, but is not making enough money right now to afford rent every month. She has no idea what her credit report contains, but thinks it is probably “not good.”
Assets:
Steady income
Part-time work means time to lookFriends – a place to move in or a possible roommate.
Needs:
Long-term housing
More incomeSlide8
Why does money matter?
Start with two framing questions:
What are the survivor’s goals? How do consumer issues help or hinder those goals?Slide9
Prioritizing debts and bills
Generally:Rent/Mortgage Payment
FoodUtilitiesSecured debtsUnsecured debtsBUT – each survivor may have a different priority. Slide10
Secured debt v. unsecured debt
Secured debt
creditor has interest in a piece of property
Unsecured debt
creditor does NOT have an interest in a piece of propertySlide11
Secured Debt
Ask yourself:
Does the creditor have a right to some piece of property?Mortgage
Car (Retail Installment Contract) Title LoanNOT voluntary wage assignment
Payday loansSlide12
How are debts collected?
Voluntary payment
Including voluntary wage assignmentIf secured, re-possess property Mortgage – still need to file a lawsuit
3) File a lawsuit, get judgment and enforce judgment. Slide13
How are debts collected? cont.,
3) File a lawsuit, get a money judgment, and enforce the judgment.
Filing a lawsuit is expensive. Many original creditors sell the debt to another company
“debt buyers.”Or they hire another company to collect the debt “debt collector.”All of this takes time AND there are greater protections against debt collectors & debt buyers.Slide14
Secured debts over unsecured debts
Survival over credit
Credit will stay with you throughout your life and will go up and down
Rent, food, and heat are always more important
Prioritizing debts and billsSlide15
Exemptions
You have protections –
Even when a creditor gets a judgment, some income and property is protected against “garnishment”, the creditor taking it to pay off the debt.
These are called “exemptions.”Slide16
Exemptions
Protected Income:
Wages up to $371.25/week
If you make more than that, the most that can be garnished is 15% of weekly gross pay
Can
NOT
touch:
TANF
AABD
Earned Income Tax Credit
Social Security (incl. SSDI)
Supplemental Security
Income
VA Benefits
Worker’s Comp
Unemployment
Maintenance
Child support
PensionSlide17
Exemptions
Property
“Wildcard” - $4,000 in cash or valueCar - $2400 of value
$1500 in tools and implements of a tradeNecessary clothing, bible, school books, family picturesHealth aids prescribed by a physicianSlide18
Prioritizing debts and bills, cont.
Laila
Laila is a mother of two minor children. She recently left her husband who was physically and sexually abusing her. She and her children are living with her sister. She pays her sister $300 a month to help out with household bills, but knows she can’t stay there forever.
Laila has two credit cards that she pays about $50 a month on, one has a balance of $1500, the other has a balance of $250. She is working cleaning houses and makes about $1000 a month. This is a good job for her because the hours are flexible and she can be with her kids after school and on the weekends. She gets to work by driving a 2007 Kia
Sorento. She spends the rest of her monthly income on gas, food, her cell phone and that of her 11 year-old daughter. Auto insurance is in her husband’s name and she isn’t sure whether he will continue paying the bills since she left. She has a medical bill from
Stroger
for about $2,000 from the most recent incident of abuse when she went to the emergency room. Since winter is coming
Laila’s
sister wants her to pay $400 a month to cover the higher heating bill.
Laila
is focused on keeping her kids in their current school.
What are
Laila’s
assets?
What are some issues that
Laila
is facing?
What is some advice that you would give to
Laila
?Slide19
Prioritizing debts and bills, cont.
Laila - ASSETS
Laila is a mother of two minor children. She recently left her husband who was physically and sexually abusing her.
She and her children are living with her sister. She pays her sister $300 a month to help out with household bills, but knows she can’t stay there forever. Laila
has two credit cards that she pays about $50 a month on, one has a balance of $1500, the other has a balance of $250.
She is working cleaning houses and makes about $1000 a month
. This is a good job for her because
the hours are flexible and she can be with her kids after school and on the weekends
. She gets to work by driving
a 2007 Kia
Sorento
.
She spends the rest of her monthly income on gas, food, her cell phone and that of her 11 year-old daughter. Auto insurance is in her husband’s name and she isn’t sure whether he will continue paying the bills since she left. She has a medical bill from
Stroger
for about $2,000 from the most recent incident of abuse when she went to the emergency
room.
Since winter is coming
Laila’s
sister wants her to pay $400 a month to cover the higher heating bill.
Laila
is focused on keeping her kids in their current school.Slide20
Prioritizing debts and bills, cont.
Laila - ISSUES
Laila
is a mother of two minor children. She recently left her husband who was physically and sexually abusing her. She and her children are living with her sister. She pays her sister $300 a month to help out with household bills, but knows she can’t stay there forever. Laila
has two credit cards that she pays about $50 a month on, one has a balance of $1500, the other has a balance of $250. She is working cleaning houses and makes about $1000 a month. This is a good job for her because the hours are flexible and she can be with her kids after school and on the weekends. She gets to work by driving a 2007 Kia
Sorento
.
She spends the rest of her monthly income on gas, food, her cell phone and that of her 11 year-old daughter.
Auto insurance is in her husband’s name and she isn’t sure whether he will continue paying the bills since she left
. She has a
medical bill from
Stroger
for about $2,000 from the most recent incident of abuse when she went to the emergency
room.
Since winter is coming
Laila’s
sister wants her to pay $400 a month
to cover the higher heating bill.
Laila
is focused on keeping her kids in their current school. Slide21
Prioritizing debts and bills, cont.
Laila - ADVICE
HousingCredit CardsCar InsuranceMedical billReview budget to find extra $100 to go to rent to sister
Child SupportCredit ReportSlide22
Getting a credit report – Why?
Identity theft
Debt-collection
Credit HealthSlide23
Getting a credit report – How?
www.annualcreditreport.com
Credit Karma?**If abuser does not know the survivor’s current address, you want to be very carefulSlide24
Identity Theft & Credit Report
Identity Theft
Find out what accounts are out thereDispute unrecognized accounts
Dispute incorrect amountsIdentity theft is a good referral to a consumer lawyerSlide25
Debt Collection & Prioritizing Debts
Calculate statute of limitations
Credit Card – 5 years from last payment
Written contract – 10 years from last paymentContracts for goods (car note)
– 4 years from last paymentStatute of limitations
re-starts if new payment
is made
Prioritize which debts to paySlide26
Credit Report & Credit Health
Dispute old accounts
Negative accounts can stay on credit report for
seven years after date of last paymentJudgments can stay on credit report for seven years after date of entryBankruptcies can stay on credit report for ten years after the date of discharge/adjudication (end of BK
)Dispute incorrect amountsSlide27
Reviewing a credit report – “Melanie”
Discover Card #123456
1234 Road
Sometown
, ST 12345
Date opened:
1/15/2006
Balance
: $4500 Pay status: Charged off
Responsibility: Individual Account
Date
updated: 1/15/2017 Terms: Paid monthly
Account Type: Revolving Account
Payment
received: $0 Date closed: 2/3/2013
Last
Payment made: 12/15/2014
TJ Maxx/SYNCB #123456
5678 Road
Another town, ST 12345
Date opened:
4/17/2008
Balance
: $2300 Pay status: sold to other creditor
Responsibility: Individual Account
Date
updated: 1/15/2017 Terms: paid monthly
Account Type: Revolving Account
Payment
received: $0 Date closed:
11/12/2012
Last
payment made:
7/27/2011
Midland Funding #78900000
410 Street
City, ST 12345
Placed for collection:
11/13/2012
Balance
: $
2308
Pay
status: in collection
Responsibility: Individual Account
Date
updated: 1/15/2017
Account type: Open Account
Last
payment made:
7/27/2011
Loan type: Collection Agency
Original
Creditor: SYNCB/TJMAXX
Fingerhut #82789498247
11 Avenue
Town, ST 12345
Date opened: 9/23/2003
Balance
: $6300 Pay status: Charged offResponsibility: Individual Account Date updated: 1/01/2017 Terms: paid monthlyAccount type: Revolving Account Payment received: $0 Date closed: 3/16/2011 Last Payment: 12/17/2010 Slide28
Melanie - Advice
Discover Card #123456
1234 Road
Sometown
, ST 12345
Date opened: 1/15/2008
Balance
: $4500 Pay status: Charged off
Responsibility: Individual Account
Date
updated: 1/15/2017 Terms: Paid monthly
Account Type: Revolving Account
Payment
received: $0 Date closed: 2/3/2013
Last
Payment made: 12/15/2014
TJ Maxx/SYNCB #123456
5678 Road
Another town, ST 12345
Date opened: 4/17/2007
Balance
: $2300 Pay status: sold to other creditor
Responsibility: Individual Account
Date
updated: 1/15/2017 Terms: paid monthly
Account Type: Revolving Account
Payment
received: $0 Date closed: 11/12/2013
Last
payment made: 7/27/2012
Midland Funding #78900000
410 Street
City, ST 12345
Placed for collection: 11/13/2013
Balance
: $
2308
Pay
status: in collection
Responsibility: Individual Account
Date
updated: 1/15/2017
Account type: Open Account
Last
payment made: 7/27/2012
Loan type: Collection Agency
Original
Creditor: SYNCB/TJMAXX
Fingerhut #82789498247
11 Avenue
Town, ST 12345
Date opened: 9/23/2003
Balance
: $6300
Pay
status: sold to other creditor
Responsibility: Individual Account
Date
updated: 1/01/2017
Terms: paid monthlyAccount type: Revolving Account Payment received: $0 Date closed: 3/16/2011 Last Payment: 12/17/2010 Her card from before relationship. He made many charges w/o her knowledge. Her account from before relationship. He made many charges w/o her knowledge.
She didn’t know about this account. He used her SSN to open it. Slide29
Takeaways
That was a lot of information. Asset-based, listen to what survivor wants.
Use financial counseling and issues to re-empower survivor – her choices about what to do. Prioritize housing, food, utilities. Survival > credit. ALWAYS.
Information is power. Order credit report. Dispute fraudulent accounts and charges. Unsecured debt can only be collected by voluntary payment or lawsuit; lawsuits are expensive.