The debt(s) remain valid and collectible. The debtor might wish to try negotiating terms that would be better suit the change of their financial status, but there are not laws that protect anyone from debts owed due to a disability. In most cases the disabled person has little if any property that can be attached by creditors when it pertains to a lawsuit. All Social Security and other disability benefits are exempt to garnishment; likewise disability funds held in a separate bank account are not subject to creditor levy. It is extremely important that benefit funds not be commingled with other money in a bank account. Please be advised, disability benefits are usually not exempt when it pertains to child support, spousal maintenance or the collection of federal or state taxes.
I am answering this question for the United States. If you have debts, becoming disabled will not eliminate them. Also, it is no longer as easy to eliminate credit card debt by filing bankruptcy, which large medical bills from becoming disabled might lead to. If you became disabled because of an outside source (on the job, in an auto collision, etc.), and you accumulated debt for related treatment, you might receive a settlement to cover the expenses associated with it.
What happens to a mortgage after bankruptcy depends on whether or not the debt is reaffirmed. If the mortgage is reaffirmed the homeowner continues to pay it as if the bankruptcy had not been filed, since the debt has not been discharged. If the debt is not reaffirmed, what happens to the mortgage depends on the policies of the individual lender.
You can become a NCR registered Debt Counsellor by completing a debt counsellor's course with a NCR accredited training provider. Once the training provider has found you competent, you can apply to the NCR to be registered as a debt counsellor. Only once you have been registered can you start taking clients for debt review. Go to http://www.ncrdebtcounsellor.co.za for any questions about debt review or debt help.
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