GET OUT OF DEBT GUY: I’ve paid my roommate’s bills and my thanks comes in the form of death threats

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Question:

Dear Steve,

I had a roommate who lived with me off and on for 10 years. During the time he lived with me, he asked me to loan him money for his small business. He was abusive at times and I felt like he was on drugs but could not prove it. He asked me to loan him money to pay for products for his business, all the while making the minimum payments on the cards. Eventually, the debt racked up to over $45,000.

Finally, the debt became too much and I got with National Debt Relief which at the time — about 1 month ago — I thought was a good idea. Now my roommate moved out and left me with all the debt. I have been living on Social Security for the last 17 years. My check is $947.60 per month and my National Debt Relief auto draft is $632.00 per month. I found out my ex-roommate was writing bad checks and using drugs so I will never get his help.

My roommate has threatened to kill me numerous times and he has also told me he would tie me up and burn my apartment down. So I don’t want to try to involve myself with him but I can’t continue to pay $632.00 a month for this debt.

Any advice would be appreciated.

Donald

Answer:

Dear Donald,

I have no way of knowing if what people ask me is true but your story is so crazy, it probably is.

Given the facts you gave me I would suggest you call National Debt Relief right now and tell them there is no way you can afford to give them the majority of your income each month. That makes no sense. And if any salesperson at NDR actually sold you on a plan under the situation you describe, a manager needs to have a little chitty-chat with them.

Your roommate sounds like a total drug addicted wack job who needs more help than you can give them. I would not be surprised if his business was turning inventory into drugs to feed his apparent out of control habit. If the ex-roommate continues to threaten you, call 911.

The first thing I would do is change the locks on your door and keep that ex-roommate out.

Next, to deal with the debt you have three real options.

Option 1: File bankruptcy ASAP and legally close the door on this debt you will never be able to repay. Filing bankruptcy will stop collection calls and for the most part, you will no longer have to deal with this debt again.

You can find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you. Bankruptcy is the fastest way to get a fresh start for the least amount of money.

Option 2: Do nothing. This is the lowest cost solution. You can put your head in the sand, change your phone number, never talk to a collector, and if you get sued there is probably little chance of a creditor collecting if your only income and assets are as you describe. This approach will lead to continued collections and potentially scary notices in the mail for years to come. Of course, it will impact your credit but in your situation, that’s not a horrible thing.

Option 3: This is a bit of an improvement to the previous option of doing nothing. You can contact HELPS, a nonprofit law firm, who can give you assistance in protecting you from the creditors for a very low price. They specialize in representing lower-income seniors.

Stop being the victim

I know that is really easy for me to say but seriously you need to take some control over this situation and stop letting National Debt Relief or your ex-roommate make questionable decisions for you. You need to start taking some control and making choices that are best for you, not others.

My gut reaction is bankruptcy is the most comprehensive way for you to close the door on this financial mistake and will give you the fastest peace of mind. Working with HELPS is the least expensive intervention but can continue the annoyance of dealing with this crushing debt.

Please update me in the comments below with what you decide to do.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

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This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

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