I have debt, can I open a CD without worry?

[Hobertal]

Some background info... When I was 18, I was making $55k/yr. During that time, I had a credit card or two, co-signed a student loan, bought a new car, and had a bank account... I lost the job when I was 20 and ended up owing a couple thousand on credit cards, overdrawing on my bank account, and owing on a bill or two... Now I am 26 and have been on disability for the past 2-3 years. Last month, I got a settlement check from social security because I was underpaid since I started receiving disability payments... I would like to open a couple bank CD's and savings accounts with the money, but I am worried that the money will be pulled out and taken from me because I have debt. My mom is the payee on my disability account and I would like to open the bank CD's in my name. Should I open a CD? Do I have to be worried about the money being taken away by creditors? Thank you.

[jpg7n16]

How much debt exactly do you have? What rates are they charging?
What's the amount of the settlement?

How are you going to fix your budget going forward?
What's your plan to get out of debt?

[Hobertal]

How much debt exactly do you have? What rates are they charging?
I have not paid or made contact with the creditors since around 2007 or earlier. I think the total I owed was around $8,000 and the co-sign student loan was around $50k. I will post screenshots of my credit report from quizzle shortly.

What's the amount of the settlement?
I have $32,800. Planning on using $10,000 on a car, insurance, and other related expenses.

How are you going to fix your budget going forward?
My monthly budget is fine, currently. My monthly expenses are about 33% of my monthly income.

What's your plan to get out of debt?
Ignore it, because I think it will get wiped away after a period of time.

[Hobertal]

Unfortunately, I am not allowed to post links yet. Quizzle reports all my negative accounts as 'closed'. I have one open account with no balance owed on it.

[jpg7n16]

How much debt exactly do you have? What rates are they charging?
I have not paid or made contact with the creditors since around 2007 or earlier. I think the total I owed was around $8,000 and the co-sign student loan was around $50k. I will post screenshots of my credit report from quizzle shortly.

You're getting more than enough to pay off the $8k debt. You should do that.

If they were your student loans, you should work on paying them off too. Student loans are extremely difficult to discharge in bankruptcy, especially when you live on 1/3 of your disability income.

Student Loan Syndrome

What's the amount of the settlement?
I have $32,800. Planning on using $10,000 on a car, insurance, and other related expenses.

How are you going to fix your budget going forward?
My monthly budget is fine, currently. My monthly expenses are about 33% of my monthly income.

Are you working? If not, why do you need a car? If so, why aren't you paying back what you owe?

What's your plan to get out of debt?
Ignore it, because I think it will get wiped away after a period of time.

Closing your eyes and hoping the debt goes away isn't a plan. You make enough to start making payments. You should begin a plan to pay back the money you borrowed and spent already.

So what's your realistic plan?

[Joan.of.the.Arch]

Please remember that whoever co-signed the loan with you is still on the hook for that loan along with you. Do the right thing and pay it down. Don't let another person's credit reputation be ruined.

In my experience with savings built up from disability payments, you have a certain amount of time to "spend it down" which can (and in my opinion should) include paying off debt. After that, it looks to the SS Administration like you have enough to live on for a while and your checks will be stopped until you spend the savings down to something like $2000 or $3000. Sorry, I do not know what the exact number is. Contact SS Administration to find out.

The question of whether creditors can be awarded your CD savings acquired with disability payments sounds like a legal question. Really, I cannot see why a judge would protect your CDs if you owe the money.

[Hobertal]

I co-signed the student loan for a friend, so he could go to college. He hasn't made payments on it in a year or two.

After looking at my credit report, I am wondering if I should pay the debt, because all of it seems to be written off. You're right, I should consult an attorney to figure this out.

[MakeAStash]

My understanding is creditors cannot legally garnish a bank account in which SS disability funds are deposited. That doesn't stop them from doing so and then you'll have to protest the garnishment. Your question, however, is about a CD, which may not receive the same protection, plus about funds being paid to your mom, so that adds another question mark.

[disneysteve]

What is the nature of your disability? Are you permanently disabled to an extent that you will never be able to work again? If so, I might be on board with you not paying your debts.

If you are able to work, that's entirely different. In that case, by all means pay what you owe. If you can afford to buy a $10,000 car and you can afford to put money into savings and CDs, then you can afford to pay your bills. There is no reason everyone you borrowed from should go unpaid if you have the means to repay them.

[Hobertal]

I believe I am officially on disability for Major Depressive Disorder. Though, I have an evaluation stating Asperger's Syndrome, Major Depressive Disorder, Mood Disorder, and Obsessive-Compulsive Personality Disorder. I see a therapist 1-2 times per month to try to get better. I am unsure if this qualifies as permanently disabled... I tried working over the summer, but that didn't go so well.

I know the statute of limitations for collecting debt in my state is 4 years. I am well past that on all of my debt, other than the student loan. This is one of the reasons I think the debt is no longer legally owed.

I am trying to make a smart decision on what to do with my extra money, because I want to maintain a pretty wife and house and nice things someday. Having savings and investments seems like the way I will obtain those things.