Bay Area Reporter - November 16, 2000
Ali Hall, AIDS Legal Referral Panel

Dear AIDS Legal Referral Panel,

I stopped working in 1992, when I was diagnosed with AIDS and my doctors gave me less than two years to live. I'm still here.

Eight years ago, I had perfect credit and lots of cards - since then, I have basically lived off of them, up to their limits. Now, my sole source of income is government benefits.

Yesterday, I got another letter from a collection agency. Needless to say, I can't pay them anything. What do I do, as I'm living in

Credit Bondage - In San Francisco

Sound familiar? Are you facing a mountain of debt? Not much hope of paying it off? With a little knowledge and a little help, you can go a long way toward relieving the stress you're experiencing.

Get your hands on it

You need to know where you are. Ordering your credit report is a great place to start. You can get a copy of your credit report by contacting one of the three main credit reporting agencies: Experian (formerly TRW), 1-888-397-3742; TransUnion, 1-800-851-2674; or Equifax, 1-800-685-1111. Secret: Experian's report is considered to be the most consumer-friendly, and is actually designed to be almost readable. Good news: at worst, it will only cost you $8 to get one. At best, it is free, if for example you receive government benefits. Check to see if you qualify.

Don't worry (yet) if your credit report looks bad. First, see if any negative information is over seven years old or incorrect. Mistakes on credit reports are common: you absolutely have the right to dispute anything you believe was reported in error. Do it! The report should give you instructions for filing your dispute.

Second, even if what they say about you is true, talk back. You are entitled to add a 100-word statement to your credit file, explaining a particular entry. Here, for example, you can explain that your medical bills went into collection only because the insurance company took so long haggling over the claim.

You can also request that the credit bureau send the statement to anyone who received a copy of your report within the previous six months.

Play it up

You are also entitled to try and overshadow negative notations by adding any missing credit histories of accounts you do pay on time.

The wolf is at the door

Sure, creditors have a right to contact you, but it is illegal for them to harass you. For example, under the law, bill collectors cannot use obscene or profane language, threaten to harm you, your relatives or friends, repeatedly use the telephone to annoy you, threaten to get your public benefits cut off, and so on. If you feel you have been harassed, get help. ALRP is one good source: we can show you how to write a letter to protect your rights.

You can't get blood from a turnip

One of your most powerful weapons in keeping the wolf at bay is explaining to your creditors that you are "judgment proof." Basically, this means that your property is "exempt," that is, it can't be taken by your creditors to pay what you owe them. If you receive government benefits like SSI, have limited personal property, and own no or limited real estate, you are probably judgment proof.

More good news

You don't have to do any of this alone. If you're looking at your finances and find yourself cringing when the phone rings or not wanting to look in your mailbox, you need an ally. ALRP is around to help you get on your way out of credit bondage - and so are other organizations, like Consumer Credit Counseling Service (CCCS), which does a wonderful job of negotiating lower payment plans, consolidating your debt, and (often) getting interest and late charges dropped.

If you have more than a small fistful of creditors, you may want to consider bankruptcy. Bankruptcy is actually a simple procedure that involves filing some papers, paying a $200 court fee and usually some attorney fees. If you cannot afford to pay the filing fee all at once, you may apply to pay it in three installments.

When you emerge from the bankruptcy process, you keep your exempt property (such as your home, pensions, some personal property, public benefits, insurance, tools, and some wages) but your debts (with some notable exceptions) are wiped out (Chapter 7) or restructured (Chapter 13).

Chances are you'll need some help deciding if bankruptcy is right for you - it is a great solution for many people, but requires some follow-through.

Since 1983, ALRP has provided free and low-cost legal services for people with HIV in the San Francisco Bay Area. ALRP provides direct services and referrals to HIV-sensitive panel attorneys. ALRP can assist you in a variety of matters, including credit and bankruptcy, insurance and employee benefits, wills and powers of attorney, landlord-tenant relations and housing issues, government benefits, employment, confidentiality, and establishing child guardianship. This article is not intended as legal advice for your specific situation.

Visit us on the World Wide Web at http://www.alrp.org. Do you have any questions you'd like answered? E-mail Ali Hall, ALRP client advocate, at: ali@alrp.org; call us at (415) 701-1100 or (510) 451-5353; or write: 205 13th Street, Suite 2170, San Francisco, CA 94103-2461.

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Always watch for outdated information. This article first appeared in 2000. This material is designed to support, not replace, the relationship that exists between you and your doctor.

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