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  1. #1
    Join Date
    Jan 2012
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    23

    Default Settling My Spouse's Credit Card Debt

    My question involves collection proceedings in the State of: California

    I found out my spouse has $30K in credit card debt when we applied for a new car loan. Our accounts are completely separate with exception to the recent approved joint car loan thanks to my credit. My spouse has never missed a payment, but only the minimum amount has been paid.

    I can pay off the debt, but that is quite a penny. What is the best option in my situation?

    1. Pay off the debt ASAP. However, I would like to avoid paying this much money with as least impact as possible.
    2. Have my spouse contact the creditors to settle for a lump sum payment to reduce the overall pay out. Impact would be my spouse's credit would be further impacted, but I think risk is low after I pay off our car loan. Would my credit be impacted if my spouse negotiated a lump sum settlement and what are the impacts to us individually and jointly?

    Would like pros and cons of each option considering we now have a joint car loan. I want to stop the debt accumulation from the interest rates. I do not want creditors to come after my assets and we do not own a home. Thanks.

  2. #2
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Paid in Full or Lump Sum Settlement

    Divorce while you still have assets.

  3. #3
    Join Date
    Sep 2013
    Posts
    244

    Default Re: Paid in Full or Lump Sum Settlement

    Quote Quoting Disagreeable
    View Post
    Divorce while you still have assets.

    well, it sounds like you cannot file for bankruptcy. best course is likely to pay it off all at once. just my opinion.

  4. #4
    Join Date
    Sep 2005
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    Behind a Desk
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    98,846

    Default Re: Settling My Spouse's Credit Card Debt

    Why do you believe that the credit card company would be interested in taking a penny less than is owed on the card, when your household is clearly capable of paying the debt and of keeping up with the monthly payments? It's free to ask, but don't be surprised when your spouse hears the word "no".

  5. #5
    Join Date
    Jan 2012
    Posts
    23

    Default Re: Settling My Spouse's Credit Card Debt

    Quote Quoting Mr. Knowitall
    View Post
    Why do you believe that the credit card company would be interested in taking a penny less than is owed on the card, when your household is clearly capable of paying the debt and of keeping up with the monthly payments? It's free to ask, but don't be surprised when your spouse hears the word "no".
    What happens if she tells them she cannot pay it and is considering bankruptcy? That would give the creditors the chance to offer options such as a lump sum payment, no? Her debt accounts are not linked to my name and only the car loan do we share joint ownership.

  6. #6
    Join Date
    Sep 2005
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    Posts
    98,846

    Default Re: Settling My Spouse's Credit Card Debt

    They will ask for her to document everything about her income and assets.

  7. #7
    Join Date
    Sep 2010
    Location
    Florida
    Posts
    153

    Default Re: Settling My Spouse's Credit Card Debt

    Creditors hear that ALL the time. It does not phase them in the least. Any possibility of a settlement would be months and months from when you stopped paying. If at all. They have many other options available before they would, as a last-resort, negotiate a settlement.

  8. #8
    Join Date
    Jan 2008
    Location
    Toledo, OH
    Posts
    16,307

    Default Re: Settling My Spouse's Credit Card Debt

    Quote Quoting df04527
    View Post
    Creditors hear that ALL the time. It does not phase them in the least. Any possibility of a settlement would be months and months from when you stopped paying. If at all. They have many other options available before they would, as a last-resort, negotiate a settlement.
    Concur.

    And really? They're more likely to go to court, obtain judgement, and garnish her wages to settle the judgement than they are to negotiate any kind of settlement.

  9. #9
    Join Date
    Jan 2012
    Posts
    23

    Default Re: Settling My Spouse's Credit Card Debt

    Forgot to add some more tidbits. My spouse has not held a job since 2007 and is a homemaker and currently has no income. My spouse was making $500 from babysitting but that was all cash and was what used to make payments. Also, the debts occurred before our marriage.

    What happens if my spouse files for bankruptcy? I have good credit, one paid off car in my name, one joint financed car with me being main signer, debts occurred before marriage and my spouse does not plan to work for a few more years. $30K is a lot of money.

  10. #10
    Join Date
    Jan 2008
    Location
    Toledo, OH
    Posts
    16,307

    Default Re: Settling My Spouse's Credit Card Debt

    If your wife files for bankruptcy individually, it shouldn't affect your credit.

    That said, she should consult a California BK attorney for assistance in filing and information about how it might or might not affect you. Every case is different.

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