credit question

[PaDisney02]

Hi, my husband has a friend who isnt too well, he is very depresed over his credit and came to us for some answers (I dont know y, I dont know anything about legal stuff) so I though maybe some1 on here could help.

His situation:
He is in his early 20s
Works under the table at a framing Co. (has done this for years so has no "real" employment history)
Has credit cards/loans (nothing serious like a mortgage or car payment, just store charges and credit cards)
Owns nothing lives at home
Basically a loser in my book....he's an old friend of my husbands

A few years ago he just stopped paying all of his credit cards, for no reason other then immaturity. He said they have been calling his house and sending him letters for years. Recently the phone calls and letters have stopped. He said he used to get 15-20 calls a day! Now he gets 1 every 3 days. He let me look up credit report and most of his accounts say charged off but there r a few that still have a balance and there r 5 credit collection accounts.

He is not in the financial sitation to start paying on these account because he is having a baby soon and is trying to save up. Also, the balances r way higher then he even borrowed due to late fees and such.
He wants to claim a bankruptcy if he can, but since he has never legally worked can he do that? He has no income tax return to show a lawyer. Like I said b4 I dont know much about legal situations but wouldnt a lawyer need to see his tax returns and also, isnt it illegal to work under the table? What would be his best bet? Should he see a lawyer? Should he continue to just not pay anything and wait it out until this stuff falls off his report? I feel bad for him cuz now that he is having a baby him and his girlfriend have been talking about buying a home in the future and I cant imagine he could do that for a long time with the way his credit looks. Any ideas? Thanks

 

[taylor1293]

This is not something he should even attempt to begin to resolve on his own. He needs to contact an attorney for legal advice.

 

[PaDisney02]

thats what I thought but he affraid of his boss getting in trouble because he has been workig under the table for years...thanks

 

[taylor1293]

thats what I thought but he affraid of his boss getting in trouble because he has been workig under the table for years...thanks

That is understandable and perhaps it's time for him to look for a new job. The problem will never just go away and the debt will never be forgiven (without bankruptcy). The amounts will get bigger and bigger as the years go on. He needs to begin a resolution now, his lawyer can help him sort out the details.

 

[golfgal]

thats what I thought but he affraid of his boss getting in trouble because he has been workig under the table for years...thanks

His boss should get into trouble, what he is doing is VERY illegal. I feel sorry for the baby on the way with a dad that is so immature. Hopefully filing bankruptcy will open his eyes and make him grow up. What is he doing for health insurance for the baby and the baby's mom? Unfortunately for him most employers now check credit reports so his prospects of getting a real job are slim. He needs to grow up, talk to a lawyer, get this taken care of and start down the right path ASAP. Luckily he is young enough that in 10 years his credit can be better and he can still have a productive life.

 

[The Mystery Machine]

If the GF is smart she won't marry him and then she can buy the house under her name only. I would not want that mess of a credit and tax history on my record.

Nothing is going to "fall off" his report as far as I know. Maybe someone else can comment there.

He has 2 choices, face the music through a lawyer or live on a cash system until he gets a new job and pays taxes.

Sounds like a big mess.

 

[golfgal]

If the GF is smart she won't marry him and then she can buy the house under her name only. I would not want that mess of a credit and tax history on my record.

Nothing is going to "fall off" his report as far as I know. Maybe someone else can comment there.

He has 2 choices, face the music through a lawyer or live on a cash system until he gets a job and pays taxes.

Sounds like a big mess.

Paid off or dismissed bad debt will eventually fall off in 7-10 years, as will a bankruptcy. If he doesn't do anything about it the bad debt will stay on indefinitely.

 

[clarabelle]

Well -I know this sounds snarky -but really he is just a crook.
Robbing his creditors and the taxpayer.
I imagine it will be hard to resolve.
Crime should not pay off -so I hope there is no simple resolution

Sorry Pa Disney -I know this is not what you are looking for -but I can't help myself

 

[PaDisney02]

Thanks for all your help every1. I too feel sorry for his new baby on the way. I feel sorry for him to, but he put himself in this situation. Some people r just so immature. Luckily his new girlfriend does have a good job w/ benifits. She is a nurse so the hospital she works at gives really good benifits which is good for her and her baby.

Thanks again!

 

[DMickey28]

Go to creditboards.com. They have a lot of valuable information on how to start taking of this himself if he doesn't want to go to an attorney. Unless he wants to be a deliquent forever he will have to start paying stuff off or start the validation process on everything.

The charged off/'dead' accounts will fall off his report 7ish years after the last activity on it. If an account was sold to a collection agency, the CA can stay on his report as long as it is active. Have him go to that website and do some research on the different CA's that he has on his account. Many are not reputable and have very illegal practices. Often times CA's will buy accounts that have already been settled and try to settle those accounts again. There is a ton of information out there and it's not easy but he can take control of his accounts himself, pull himself out of debt and deliquency and begin a new credit life. He is young enough that this will not effect the rest of his life horribly but if he continues to ignore it it may.

No advice about the job. I'd get one that is legit because he won't be able to do much as he gets older, especially with the new credit issues going on in the economy with a steady, stable, legal job.

Good Luck.

 

[Carly_Roach]

Thanks for all your help every1. I too feel sorry for his new baby on the way. I feel sorry for him to, but he put himself in this situation. Some people r just so immature. Luckily his new girlfriend does have a good job w/ benifits. She is a nurse so the hospital she works at gives really good benifits which is good for her and her baby.

Thanks again!

Judging him and bashing him based on his past actions does absolutely no good except to make the judger feel better about themselves. It's not productive to assisting this guy if that's what people really want to do.

Here's what I would suggest:

1). Do NOT marry the girlfriend just yet. If they MUST buy a house, get the house in HER name only for now. That way they at least have a home to raise the baby in and they have at least one person with good credit in the family. They may not be able to afford a large home, but this is why the phrase "starter home" was coined.

Another alternative is to get an apartment or rent a home in both their names. Make sure the home or apartment participates in reporting the payments to the credit bureaus. This way he can start building up his credit again by showing he can make payments on time.

2). See an attorney or a credit counselor.

I haven't done the research but maybe another attorney here can tell us if the first free consultation still falls under attorney/client priviledge so he doesn't have to worry about getting into trouble for being paid under the table.

He might also check out free legal clinics in your area and see what they say. Or perhaps there's a law school in the vicinity that he can sign up for free legal advice.

3). Get himself hired and working for a legitmate employer. Being paid under the table might be nice in terms of cash and I can understand why he's doing it if he or they were strapped for cash. But it also has repercussions that he's now experiencing.

Hopefully your husband's friend is truly interested in making a good life for himself, his GF and their baby. Make no bones about it: this will be a difficult thing for him to do. But tell him to look forward to his 30's when all this is behind him and he's living the life of a great husband and father and accomplishing the dream he had when he was in his 20's and so depressed over money.

Nothing can be accomplished by looking backward and constantly going over bad choices and mistakes. Productivity is learning from those mistakes, not making them again, and looking forward to the future.

Best of luck to your husband's friend.

 

[clarabelle]

CarlyRoach -I think you are right judging him does not help-but seriously
You think it is ok to work under the table if you are strapped for cash?

If I were the OP it would be so hard not to be angry with him. This isn't a victimless crime. Everyone that pays taxes and has a credit card is paying for his mistakes.

I honor the OP for wanting to help him -but really he is a crook and he should be punished for breaking the law.

 

[Carly_Roach]

CarlyRoach -I think you are right judging him does not help-but seriously
You think it is ok to work under the table if you are strapped for cash?

If I were the OP it would be so hard not to be angry with him. This isn't a victimless crime. Everyone that pays taxes and has a credit card is paying for his mistakes.

I honor the OP for wanting to help him -but really he is a crook and he should be punished for breaking the law.

No, I don't think it's right - however that has no bearing on the issue if the young man is sincere about turning his life around and becoming a good citizen and changing his ways. What good is prison going to do his future wife and child? It's more important to me to have a neighbor who made mistakes his 20's, learned from them and is now working hard to be a model citizen than it is for me to feel some kind of vindication that this young man (who, let's face it, didn't KILL or MAIM ANYONE) is going to prison.

As far as your reasoning that everyone who pays taxes and has a credit card is paying for his mistakes, you're wrong there. It's not the little guy that caused the crash of 2008 - it's the corporate greed and mindset of "profit at all costs" that got us into this pickle. Instead of focusing on the individuals at poverty level and declaring them to be bad, perhaps our focus needs to be on the corporations and multi-millionaires who STILL haven't done any prison time for their deceits (and probably never will) and are continuing to rip off the taxpayer by getting bailouts before declaring bankruptcy.

 

[Disney Doll]

Call a lawyer and let the lawyer help him sort this mess out.
Advise the mother of his child not to marry this guy. He has "loser" written all over him.
Beyond that, step away from the madness or you will be drawn in.