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Common Creditor Issues and Interventions

The intent for many criminal enterprises is to steal as much as possible from a vulnerable adult. This leads some older adults to borrow money from family and friends, maximize credit cards, obtain second mortgages, or ‘cash in’ securities and other assets. Scams can also include the theft of personal identifying information to enable future crimes.

In many cases, a victim may be ‘judgment proof,’ meaning their assets and income are so depleted that they would be unable to pay on a civil judgment against them. Fraud victims who are under pressure from creditors should consult with an attorney who specializes in consumer issues or elder/estate protection, or contact a legal aid agency if income and assets are too limited to hire a lawyer. An attorney can help draft a ‘judgment proof’ letter notifying a victim’s creditors that the person was a victim of one or more financial crimes/scams, and proving that the crimes were reported to the police as well as the FTC and the FBI via IC3.gov. The letter can also document that the victim does not have the income or assets to pay their debts.  If cognitive impairment was diagnosed, that may also be included in the notification, depending on privacy laws and the permission of the victim.

Non-profit consumer credit counseling centers can provide assistance in contacting creditors, renegotiating credit card and other debt, and providing financial counseling on options, including bankruptcy. Some bankruptcy counselors also provide credit counseling and debtor education. Furthermore, debtor assistance programs may be available from the state bankruptcy court.

Government programs can help refinance mortgages, which may be helpful in managing debt incurred by the crime. See www.makinghomeaffordable.gov.

Finally, bankruptcy itself may be a reasonable option to consider. Be sure to obtain legal advice if you plan to explore bankruptcy. Following are a few bankruptcy counseling and court resources:

Bankruptcy counseling and court resources:

We would like to acknowledge the Los Angeles Scam Working Group and Bet Tzedek, whose research informed this article.

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