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A legal question and answer line for Seniors. DEAR SENIOR LEGAL LINE:

I have a credit card that I cannot pay. I owe approximately $3,000 on it. I used the credit card to pay off some medical debts and buy some other things that I needed. I had been paying the minimum balance payments but had to stop a few months ago because my living expenses increased. I needed all of my Social Security income to pay for my living expenses such as food, rent, and medicine. Now a collection agency has been calling me everyday demanding payment. Is there any way that I can make them stop contacting me? I tell them that I just cannot afford to pay the debt but that does not stop them from calling.

Signed,          Emma

DEAR EMMA:

You are not alone. There are many people in the same situation. As much as you would like to pay off this debt you just cannot afford to do so. To my mind, and I am sure that reputable credit counselors would agree, there is a hierarchy of debt that you should pay each month. In other words, some debts are "more important" to you. Your survival expenses, namely your shelter (rent), medicine, and food expenses are your most important debts. You need these things in order to survive. Credit card debt is classified as unsecured debt. This means that there is no collateral tied to it. Because of this, unsecured debt should be the last debt that you pay each month if you can afford to pay it. If your survival expenses cost you your entire monthly income and you have no savings, there is nothing you can do to pay the left over debt such as credit card debt. If after paying your survival debt, you have left over money, then you can allocate the left over income to those debts you haven't paid such as credit card debt.

When you cannot afford to pay a credit card, the credit card company will attempt to have you pay by contacting you by phone and mail. Sometimes the credit card company will negotiate with you for an affordable payment. In my experience, however, with my clients, there is just too much debt and they are not willing to settle for a reasonable amount. If this is the case, the credit card company will send the debt to a collection agency. A collection agency is a business that attempts to collect debts for their clients. A collection agency can be a law firm. Federal and state law regulate collection agencies. In Minnesota, you will know that you are dealing with a collection agency because by law their correspondence must state that they are a debt collector.

Because the collection agency is calling you everyday, you may wish to take advantage of some of the law's protections for debtors. The Fair Debt Collection Practices Act allows a debtor to tell a collection agency to stop contacting them. By law, they must then stop contacting you unless it is to tell you what legal action they are going to take or that they have decided to stop contacting you. In other words, the daily phone calls will stop. The best way to contact them is to send them a written letter requesting that they stop contacting you as per the Fair Debt Collections Practices Act. Keep a copy for your records. Once you send them the letter, keep a log of their phone calls in case they are violating the law.

In your case, you may be able to persuade the collection agency this it is not worth their while to continue to try to collect because of the type of income you receive. Some forms of income are exempt from collection. Social Security is one such form that is protected by federal and state law. As an attorney, we call this "judgment proof" income. If the creditor decides to sue you for the debt and wins a judgment, they ultimately cannot collect that judgment from your Social Security income because it is exempt. Even so, they may try to attempt to garnish your bank account. For this reason, it is wise to send the collection agency and/or credit card company proof of your Social Security income to show them that it is not worth their while to sue you or attempt a garnishment. In your same letter, you can request that they have no further contact with you. Usually, once they get this information they will sell your debt to another collection agency. You will have to re-submit similar letters to each new collection agency.

If you wish to avoid having to send judgment proof letters to subsequent collection agencies, your other option is to petition the bankruptcy court to discharge your debts. In the petition you would list all of your debts. Once the petition is filed, according to law, all collection efforts must stop. If the bankruptcy court grants the discharge, you will no longer owe the debts. There are advantages and disadvantages to bankruptcy, and you should seek the advice of a bankruptcy attorney for more information.

I hope this gives you some general information about your options and helps you feel that you are not alone. I encourage you to contact us if you have questions. One last caveat: if you know that you cannot afford to pay back credit, do not use the credit. In other words, do not use your credit card if you know that you cannot afford the minimum payments. In fact, it can be a form of fraud if you use credit knowing that you cannot repay it. In your situation Emma, you took out the credit believing that you could pay and indeed were paying for a time. Your circumstances changed so that you could not afford to make payments. This caveat does not apply to you but certainly, you should not use credit in the future unless your financial situation improves.

This column is written by the Senior Citizens' Law Project. It is not meant to give complete answers to individual questions. If you are 60 years of age or older and live within the Minnesota Arrowhead Region, you may contact us with questions for legal help by writing to:  Senior Citizens' Law Project, Legal Aid Service of Northeastern Minnesota, 302 Ordean Bldg., Duluth, MN 55802. Please include a phone number and return address. To view previous articles, go to: www.lasnem.org. Reprints by permission only.