Putting a Stop to Financial Exploitation
“I notice my neighbor giving lots of her money away…and now she isn’t able to pay her bills.”
“My brother is taking mom’s Social Security and buying things for himself .”
Financial exploitation includes scams, misuse of a senior’s property, undue influence over how a senior spends money, and outright theft. Some signs to look out for:
- A senior has a sudden, unexplained inability to pay bills or buy necessities
- A senior who does not understand financial arrangements made for him or her
- Others having an unusually high interest in a senior’s assets (new “best friends”)
- A nursing home, caregiver, or other business overcharging a senior
An attorney may be able to help recover a senior’s money through a civil lawsuit. Some of these actions may be a crime (theft or fraud) and the abuser could go to jail.
Call Adult Protection Services and an attorney if you suspect financial exploitation.
Be Smart about Scams. Know how to say “No!”
New scams are born every day and many target seniors. The best cure for scams is prevention.
- Don’t give your credit card number or other personal information to people who contact you.
- Don’t pay for anything that comes in the mail if you didn’t order it.
- Don’t buy under pressure. You can just hang up or shut the door!
Be smart before you sign. Know whatʼs in your contract or warranty!
Caution: Idaho does not have a “cooling off period” (a few days to cancel a contract after you sign) except for door-to-door sales. Slow down and read the whole agreement before you sign!
- Before you sign something, read all of it. If you don’t understand anything, ask questions!
- Get a copy and take it home to read it. If someone won’t give you a copy, don’t sign it!
- If a contract has un-filled in blanks, don’t sign it!
Contact Idaho’s Consumer Protection Division (1-800-432-3545 or www.ag.idaho.gov) for the Attorney General’s Senior Citizens Manual. The Manual describes common scams targeting seniors involving telemarketing, online shopping, sweepstakes, home repair rip-offs, prescription drugs, living trusts, charities and churches, and it gives tips on how to protect yourself.
Did Someone Break a Contract or Scam You?
- You can write a demand letter to the business or person. Keep a copy for your records. Carefully state what you want them to do and why. Include a copy of your receipt, contract, warranty, or other documents. Send it certified mail, return receipt requested. Wait a reasonable time for a response. The letter may be useful if you have to sue later.
- File complaints with the Better Business Bureau (1-800-218-1001 or www.bbb.org) and the Attorney General’s Consumer Protection Division (1-800-432-3545 or www.ag.idaho.gov). While these agencies may not represent you individually, they may take further action if many people file complaints against the same person or business.
- If your demand letter gets no response, you may sue for damages (money) you are owed.
Before You Borrow
Loan offers often sound like a great deal, but many loans are created to make as much money as possible for the lender. Be careful, because loans often cause more problems than they solve. You are not legally excused from your debts even if you lose your job, get sick or can’t afford to pay for another reason. If you miss a payment, the creditor may try to sue to collect the debt.
Be smart before you get a loan. Know whatʼs in your loan agreement!
- Know the total cost of the loan, including interest and all fees.
- Know how many payments you’ll have to make and each payment’s due-date.
- Know your own budget: can you really make all the payments?
- Keep copies of all records of any loan agreement and payments you make. Collection letters and bills often contain errors. If you notice a mistake in the numbers, send a letter to let the
Know what lenders know about you: get a copy of your own credit report.
Get your free credit report: 1-877-322-8228 or www.annualcreditreport.com.
Dealing with Debt
You can negotiate with your creditors.
Write the creditor and explain your situation and why you’re unable to pay. The creditor may accept an offer of a different payment arrangement (like smaller monthly payments). If you and the creditor agree, ask for a written copy of the new payment terms.
Debt counseling services may help you, but watch out for scams!
Some debt counseling services can counsel you and negotiate with creditors on your behalf for lower payment plans. Be wary of debt “consolidation” or “settlement” companies– many cost more than they’re worth. Don’t commit to a company over the phone. Insist on meeting in person with a counselor. Before you sign any contract, you can check up on the company with the Better Business Bureau (1-800-218-1001 or www.bbb.org.
You can fight debt collectors who harass you.
If you owe a debt, the creditor may sell the right to collect the debt to a collection agency. Debt collectors and their lawyers will sometimes harass you or try to scare you into paying a debt. A federal law, the Fair Debt Collection Practices Act (FDCPA), prohibits lenders, collection agencies and their lawyers from harassing tactics such as threatening you with criminal prosecution or violence, calling your friends or neighbors, calling you at work if your boss doesn’t allow it, and calling before 8:00 am or after 9:00 pm. If a debt collector keeps harassing you, you can write a cease communication letter which may look like the following example:
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Dear Sir/Madam: Re: Account # ______ (1) written proof of this debt, (2) the name and address of the original creditor and (3) a copy of your collection agent permit issued by the Idaho Department of Finance.
Sincerely, _________________ |
Are You Being Sued Over a Debt?
If you owe a debt, a creditor or a collection agency may sue you and ask a court to issue a judgment declaring you owe the debt. First, you will get a Complaint (a court document that tells you what debt you’re being sued over) and Summons (tells you when and how to respond).
You have 20 days to file an Answer with the Court.
You may have a have a good defense to the creditor’s claim that you owe the debt. Your answer is where you state your defenses. Some collectors have inaccurate records, and it will be hard for them to prove that you actually owe the debt and that they have the right to collect it. An attorney may be able to identify some defenses in your situation.
Some common defenses:
Mistaken or stolen identity: “I didn’t run up this debt.”
Debt paid or discharged: “I don’t owe that anymore!”
Wrong amount: “I paid part of that debt off.”
Statute of limitations: “They waited too long to collect!”
A creditor has a limited amount of time to try to collect a debt. For “revolving” debts (like credit cards), the limit is four years from the date of the last charge or payment on the account. For “fixed” debts (like a hospital bill), the limit is five years from the date the debt was charged.
If you know you owe the debt, and don’t have any defenses, you may lose the collection suit, whether you file an answer or not. In fact, filing an answer may increase the attorney’s fees awarded against you. Even if a judge declares you owe some money, you can still protect your property.
Protect Your “Exempt” Property & Money
You will have an opportunity to protect certain types of income and property (that the state has declared “exempt” from collection) even if a creditor wins a judgment against you. To enforce a judgment and take some of your paycheck, property, or money in a bank account, a creditor must go through a formal process.
The creditor can’t collect by itself; it has to ask the sheriff to do it. In most cases, the sheriff will do this by bringing you a Writ of Execution (a document that says a creditor is trying to collect) and a Claim of Exemption form. To protect your property, you must fill out the Claim of Exemption form and turn it back in to the sheriff within 14 days.
What kind of property can be protected from creditors?
- Most government benefits are exempt, including all Social Security, Veterans’ benefits,public assistance, and unemployment benefits.
- Some other kinds of money is exempt, including payments for child and spousal supportworker’s compensation, life insurance benefits, pensions, and retirement income. Caution: Don’t mix exempt money with “non-exempt” money (like gifts or your wages) or you risk losing the exemption. You may have to keep them in a separate bank account.
- Much of your personal property is exempt, including: one motorcycle, car, or truck (withnet value up to $7000), appliances, furniture, books, clothing (with net value up to $7500), foodand water, jewelry (worth up to $1000), and other miscellaneous personal property (up to $800).
- Can they take my paycheck? A creditor may ask your employer to take some of your paycheck (“garnish your wages”) to pay the judgment, but the creditor cannot take all of it– you will be left with some money to live on.
- Can they take my home? Up to $100,000 of the net value (value of the property minus how much you owe on it) of yourhouse or manufactured home may be protected from creditors, under the “homestead exemption.”
There are many other exemptions.
Contact Idaho Legal Aid Services for a detailed list of exemptions and instructions on how to
claim them. The list is also available at www.idaholegalaid.org.
Is Bankruptcy a Good Option?
Bankruptcy cancels many debts.
When you file for bankruptcy, most (but not all) debt collection processes are automatically stayed (collectors have to stop trying to collect the debt). You then have to disclose all of your financial information to an official of the bankruptcy court. After your bankruptcy case is final, the court may issue a “discharge” which cancels most kinds of debt and gives you a fresh start. However, some kinds of debts, such as taxes, spousal support, child support, student loans, court fines, and “secured” debts (such as mortgages and car title loans) are not discharged.
Bankruptcy can cost money and hurt your credit rating.
There are costs to filing for bankruptcy. For example, the filing fee for Chapter 7 is $299 (in 2011), but you may qualify for a filing fee waiver if you have very low income. Also, you may have to hire a private attorney to help you (which usually costs between $800 and $1200). Bankruptcy also remains in your credit history and it might be harder to get loans after you file.
Two main types of bankruptcy for individuals: Chapter 7 and Chapter 13.
Both kinds can only be filed once every eight years. You may want to wait to file if you have other debts coming due in the near future.
Chapter 7: Some of your property is sold, but you keep your “exempt” property.
The court chooses a trustee who will sell some of your property to pay back creditors. However, much of your property may be protected (“exempt”) and won’t be sold. Chapter 7 may be for you if you have low income and very little property.
Chapter 13: Part of your paychecks go to pay off some of the debt over time.
The court chooses a trustee who sets up a repayment plan: a portion of your future paychecks will be taken to pay back creditors. After a certain portion of the debt is repaid, the court can issue a discharge of the rest of the debt. Chapter 13 may be for you if you have steady income or some valuable property that you don’t want sold.
You may find a referral to a bankruptcy attorney from the Idaho State Bar Lawyer Referral Service at (208) 334-4500 or http://isb.idaho.gov.
Basics of Government Benefits
- Apply early. Apply for benefits well before the time you think you’ll need financial help.The process can be confusing, and you may need to gather lots of information together to apply.
- Keep records. Keep every written notice from a government agency in a file.Read everything carefully and pay attention to dates! Keep a record of your contacts with theagency, including names and what people tell you.
- Appeal quickly. If you’ve been denied a benefit, or if your usual payment is reduced or cutoff, you may have an opportunity to appeal. There are short time limits for asking for an appeal,so don’t wait. Carefully read and follow instructions on any notice from an agency.
Are you 65 or over? Blind? Disabled?
You may qualify for income supplements from the federal Supplemental Security Income (SSI) program and Idaho’s Aid to the Aged, Blind & Disabled (AABD) Cash Assistance program. Apply for SSI at the Social Security Administration: 1-800-722-1213 or www.ssa.gov. Apply for AABD at your local Idaho Department of Health and Welfare office.
Social Security Retirement & Social Security Disability Insurance (SSDI)
These two programs are funded from deductions made from your or your spouse’s paychecks.
Find more information at the Social Security Administration: 1-800-722-1213 or www.ssa.gov.
Help with Veterans Benefits
Idaho’s Office of Veterans Advocacy (OVA) helps veterans and their family members learn about and apply for benefits: (208) 577-2300 or www.veterans.idaho.gov.
SCAM ALERT! Be aware that some companies have similar-sounding names and charge you for help with veterans benefits. You shouldn’t have to pay to apply for veterans benefits! Contact OVA if you are unsure about a particular company. Veterans may also find legal selfhelp and other useful information at http://statesidelegal.org.
Idaho Legal Aid Services may be able to give you more detailed information on how to apply for certain government benefits, or help you understand how to appeal if you are denied eligibility.
