Dire Financial Straits

[JimRoberts]

I am in dire need of financial advice. Here’s my situation. I am a 62 year old man who retired in July 2004. In December of that year I made a permanent move to Latin America in order to care for my elderly partner, who is Latin American. I moved my retirement and 401k monies into a liquid IRA, and I used this money for the move and living expenses. In March 2005 I returned to the US to have my taxes for 2004 prepared by a CPA and to pay-in-full my existing three (3) credit card debts. To my shock and disbelief, the taxes I paid to the IRS and New York State far exceeded what I had been expecting, almost double, and thus my plan to pay off my credit cards had to be abandoned since my remaining liquid IRA savings could not cover the CC debt of around $30,000.00, as well as simultaneously covering my living expenses in Latin America. I returned to Latin America and continued to pay my monthly credit card bills (I had stopped using my credit cards in January 2005) for the next six months.

In September 2005 I returned to the US and arranged a debt settlement program with American Financial Liberty, a three year program that included three initial payments of around $600.00 each, then for the next thirty-three months a $30.00 monthly deduction for AFL’s work with the credit card companies, while I would put into a separate savings account a monthly amount of around $500.00 to cover the debt settlement at the end of the three year contract, November 2008. I thought this would be no problem because I would find employment where I was living and then deposit my paychecks into a debt settlement savings account. However, all of my well-intentioned plans backfired.

I was unable to find gainful employment in this Latin American country for several reasons: (1) I do not speak fluent Spanish; (2) my age (nearing 60 years in 2006, and age discrimination is in full force in this country). To top off these two problems, I was diagnosed HIV positive in January 2006; this medical situation alone has brought me new physical problems (due in large part to my age), notably fatigue and greatly enhanced osteo-arthritis, both of which (along with the above mentioned language/age points) have prevented me from securing gainful employment in this country. Thus, it has been necessary for me to continue using my remaining IRA savings for living expenses, although I have been able to give private English lessons and earn a meager monthly salary of around $200.00. Due to the unforeseen advance of steadily rising inflation in this country – roughly 20% per month – I am struggling to make ends meet. All of this comes down to the fact that I have not been able to save any money for my debt settlement plan which will come due at the end of next month, November 2008!

I have not notified the debt settlement company of my situation, but I have an idea that they suspect I will not be able to supply the money needed to pay the three CC companies. I don’t know what to do at this point. I have approximately $1000.00 to my name in my bank account; my IRA account is now empty. However, in January 2009 I will begin to collect Social Security (direct deposit into my US bank account), a monthly income of around $1300.00, which I will need for living expenses. The Social Security will be my only source of income for the rest of my life. (Note: my name is on my partner’s bank account; he collects SS of around $1100.00 per month, plus a separate pension of around $200.00 per month.)

Should I contact AFL now about my situation, or should I wait until they contact me? Is there a possibility that the three credit card companies would accept monthly payments of around $100.00 each, ad infinitum? Is there a possibility that I could do bankruptcy from overseas? What can I do???? Please, I need help! I am totally broke - I need advice!

Face it your broke go Bankrupt ok get it over with.