Looking For Input On What To Do About A Debt I Am Not Able To Pay, And The Legal Advice I Have Already Received…

Last year, my husband and I started a business and sought out a business loan with BHG financial…this loan was supposed to be under our business, but seems to be a personal loan instead. (The lawyer I spoke to said, make no mistake it is technically still a business loan, but they put it on under us not the business itself)

The loan was for $20,000 we only received $18,900 after origination fees etc…and that should have honestly been the first red flag but we were newbies and quite niave to the process…we made regular monthly payments toward the loan for the first 7 months, and then I was in a car accident and discovered I was also pregnant at the same time…we were unable to continue with our business for the remainder of the year, as my health was severely impacted, I also wasn’t able to work my day job as often, so we became reliant on a single income. I attempted to work out some sort of hardship repayment plan initially, but their proposed repayment plan was going to end up increasing the debt to a point where we would never be able to pay it off and it would’ve trapped us. I attempted to work out some sort of hardship repayment plan initially, but their proposed repayment plan was going to end up increasing the debt to a point where we would never be able to pay it off and it would’ve trapped us in an endless cycle of repaying something that would never go away and only continue to grow. I declined signing the arrangement because it was clearly very scammy, and not a realistic repayment plan for somebody requesting hardship assistance.

I contacted a lawyer who told me it was a great move to not sign that which I agree with, however the rest of his advice I’m questioning and I’m just looking for a second opinion. This lawyer advised me to just ignore the debt collector, knowing that we can’t pay this debt. That many pop-up debt collection companies use aggressive and scam worthy tactics to try and squeeze as much money out of people as they can, but these companies pop up and fold within the first few years of existing, they can’t get anybody to repay on their terms. so this lawyers advice was to ignore the problem and wait and see what happens. He told me I am very unlikely to get sued, because it would cost them more money to bring a lawsuit to me in a different state, and if they did sue me, I have the option of filing for bankruptcy, contesting it or accepting a default judgment, which would still leave me owing less than the debt collector is asking for to settle which would not benefit them. He said most of these debt collectors threaten to take people to court, but don’t always do so when the cost of doing so is not worth what they’ll actually get. He told me if I do get sued to give him a call back and we can go from there, but that he does not believe I will get sued.

My question is was the advice I was given good advice? This has been hanging over my head for months and I’ve spent months trying to come up with a settlement that will work However, this company has not sent me any documentation in letter form. It’s all been through email which this lawyer also said is a red flag on the collector… they also are not reporting this debt or any of the payments to any of the credit bureaus which is also very strange to me…they have used high stakes, high-pressure tactics to continue to stress me out when I’m clearly trying to negotiate with them. Is it realistic to just cease contact and hope it goes away? To me that seemed like really odd advice to receive from an attorney who specializes in handling cases like this… BHG financial apparently only has jurisdiction in two states. The state that I live in is not one of them, and the debt collection company they are using seems to be associated to them, though I don’t know what their jurisdiction is. They would still have to serve me out of state, and I still believe I have a strong argument if it did go to court to say that I have been trying to negotiate this all year so that gives me some hope that I can avoid a harsh default, but I find it hard to believe if I just ignore the problem it’ll go away. All I know is I feel like I’m in over my head on this.