Both my wife and I are now 100% disabled. Our only source of income is from disability. Most of the income is SSDI, but for the next couple of years, my wife will also be receiving about $850.00 per month from long term disability insurance she had purchased at her former job.
I had some extra income for a while (SSDI recipients are allowed to have an income of about $10,000.00 per year), but that has all disappeared. We were very dependent on that to get by. After the income was gone, we used our credit cards for things like groceries, etc. That was a big mistake but I really thought we would get past it. I am probably not the first to make that mistake. I also had 5-way coronary bypass surgery in August.
We have made the decision to get this fixed. In 24 months, my wife's $850.00 per month will cease (because she will turn age 65) and her SSDI will also cease and she will receive regular social security.
I would like to dedicate the $850.00 disability income to debt settlement for the next 24 months. We owe about $75,000.00. My understanding is that from a strictly legal standpoint, the SSDI income is exempt from collection (although we need to be careful regarding that). I am not sure about the disability insurance payment (which is tax exempt, as it was purchased with "after tax" premium payments).
We clearly qualify for chapter 7 bankruptcy. We live in a 26 year old mobile home. We have two cars that are probably worth $10K to $12K, total. There is a small retirement account of abut $3700.00. That is the total of assets we own. Being SSDI recipients, we are not required to take the "means test" in a bankruptcy proceeding. However, I would like to avoid bankruptcy, as all of our debt is credit card related. I should be able to work out decent settlements, given the circumstances.
I have researched debt settlement companies. It seems to me, given our unique income situation, that I would be paying a hefty fee for something that I can probably do myself. I would much rather see our creditors get that money, in all fairness.
One of my disabilities is that I am unable to sustain a particular train of thought for very long. I am much better in writing because I can take breaks....I have working on this post for more than 20 minutes.
It seems to me that I should really be able to work out settlements that are better than the alternative of a chapter 7 bankruptcy. I am attempting to approach this in a factual, non-emotional manner. I am aware of the "could have", "should have" manner of discourse that could evolve. It might seem cold, but my intent is to avoid those conversations. I know we screwed up, but nothing we can do now will change the past. I need to get this settled and let everyone move on. I have relatively little time left in my life (the odds are that my heart related issues will surface again in 10-15 years, if I am lucky, as things could go sideways sooner).
Any advice or tips would be greatly appreciated.