Financial disaster

[hinodis]

My friend has been telling me about how hard it has been financially for her for the past several months. Today she broke down and told the ugly truth. She had $50,000+ in CC debt and she stopped paying on them last October. The CC's were all in her name only. They now are at $70,000+ due to fees and interest. Everything they own except the house is in DH's name only. She does not work. Her theory is that the CC co.'s can not touch her because she has no income and no assets. Mortgage = home value. She told me DH has run up the CC's in his name to $25,000. DH does not make enough money to cover monthly living expenses. I told her they are going to lose the house and the cars. She is convinced that they can't touch her. she said they can't take anything in his name only or garnish his wages. I am just shocked!! She asked me what should I do? I said get a job and start paying for all the stuff you charged. She said I can't get a job, then I will have to pay on my cards and they are too high. Should I tell her what I really think or just stay out of it? I had no idea things were so bad. Does anyone know what the CC people can actually do? She needs a dose of reality if you ask me.

 

[CarolinaMomOf3boys]

 

[Aliceacc]

I think what you say depends on the friendship.

Maybe you could look into finding her a finance hotline or something-- a place that will give her the hard truth without it necessarily being you. Much more than that and you're probably risking the friendship.

Up on my soapbox: I think I'm pretty tolerant of people who see the world differently than I do. But your friend seems to be a con artist-- someone determined to get SEVENTY THOUSAND DOLLARS worth of goods without paying for them.

I would have a hard time maintaining the friendship. I would have a hard time looking her in the eye. And I would warn her now not to come to me for financial help, ever. She's not incapable of holding down a job, she chooses not to.

 

[DVC Sadie]

I think what you say depends on the friendship.

Maybe you could look into finding her a finance hotline or something-- a place that will give her the hard truth without it necessarily being you. Much more than that and you're probably risking the friendship.

Up on my soapbox: I think I'm pretty tolerant of people who see the world differently than I do. But your friend seems to be a con artist-- someone determined to get SEVENTY THOUSAND DOLLARS worth of goods without paying for them.

I would have a hard time maintaining the friendship. I would have a hard time looking her in the eye. And I would warn her now not to come to me for financial help, ever. She's not incapable of holding down a job, she chooses not to.

This post has to be the best financial post I have read in a very long time, and I concur 100%.

 

[hinodis]

I think what you say depends on the friendship.

Maybe you could look into finding her a finance hotline or something-- a place that will give her the hard truth without it necessarily being you. Much more than that and you're probably risking the friendship.

Up on my soapbox: I think I'm pretty tolerant of people who see the world differently than I do. But your friend seems to be a con artist-- someone determined to get SEVENTY THOUSAND DOLLARS worth of goods without paying for them.

I would have a hard time maintaining the friendship. I would have a hard time looking her in the eye. And I would warn her now not to come to me for financial help, ever. She's not incapable of holding down a job, she chooses not to.

This is what I am struggling with. We have been friends for 30 years. I felt like saying, why does your 16 and 12 year olds have cell phones? She said most of the cc debt was from cash advances to pay bills. DH does not care about the debt.

 

[Crystal824]

I guess it depends on the situation. That is alot of money. Was she charging neccessities or just items she wanted. I have a lot more sympathy for someone charging food and medical expenses than luxury goods. Even so, the law looks at it the same. She could qualify for bankruptcy. I would reccomend she talk with someone as that is a large amount of debt for anyone to dig their way out of even making an enormous salary.

Your friend may be right depending on the laws of your state. Husband my not be held responsible for the debt of wife. If house is in Husband's name, I hope his credit card debt is being paid.

 

[Stacerita]

How in the heck did she think she was gonna pay the bills when she has no job and her DH can't cover their living expenses? It amazes me that people do things like this. So what does she think the credit card companies are going to do?

 

[Aliceacc]

Is she seriously looking for advice, or for a shoulder to cry on? Which role are you more comfortable with?

 

[hinodis]

It really bothers me what she has done. I had to get off the phone before I said something I might regret. She blames alot of it on DH but she let it happen. They are going on a trip to cedar point and staying at the breakers for 3 nights next week. I just could not believe it. I asked her about bankrupcy and she said her DH does not want to do that It just makes me so mad that they ran up all that debt living above their means. Oh I almost forgot there getting a pool too, end of season sale . It is just killinig me.

 

[DVC Sadie]

Please have your friend go to www.creditboards. com They can tell her all about bankruptcy laws and who is or is not responsible to pay the debt.

 

[Aliceacc]

I don't envy you. And I am most certainly not giving you advice; merely stating my own point of view.

But I would have trouble maintaining a friendship with someone I couldn't respect.

I probably would not gutsy enough to tell her so, but I would wish for the guts to do so. But I personally would probably let the friendship go.

 

[Ember]

Fifty thousand dollars in credit card debt?!! I get up past $150/$200 that I can't immediately pay off and I go into panic mode...

From what I understand (and this could be only Canada, so someone please correct me if I'm wrong), if the accounts are only in one persons name they cannot hold someone else liable for them. They could come after the house, because it is jointly owned, as well as any other assets she has (retirement funds, cars in her name, etc.) but they couldn't touch anything in her husbands name. Again, I'm far from an expert and in a different country... But I believe it is the same in both the US and Canada in this regard.

As to what to tell her, I guess it depends on your friendship. My best friend and her husband are massively accumulating debt. New 1/2 million dollar house, all new furniture, deck, trips, new car, all the latest toys (game systems, iPhone, etc)... I just don't talk about it with her anymore. My goal is to be debt free a year from now (last of the school loans) and then to get a small condo. I admit I'm envious of her stuff, but I also have different goals. I find we just have nothing to talk about when it comes to money matters, so I avoid the topic.

 

[C.Ann]

PLEASE tell me they don't have a joint bank or checking account! If so, tell her to get ready to have it FROZEN!!

I simply can NOT imagine someone allowing themselves to get that far into credit card debt - with no valid reason and no intent on paying it back.. (Although I do currently know another family in MUCH more CC debt than that and the wife just keeps happily charging away - while her poor husband has been hospitalized due to panic attacks over their current situation.. Her excuse is, "We live on Long Island and my children can't wear clothing from regular department stores!!!" Meanwhile her poor DH is killing himself trying to not lose everything they own..) Whatever..

 

[bdcp]

As far as I know in most states, even individual debt is marital debt and yes they are probably both responsible for debt each incurs while they are married. It prevents couples from doing exactly what she plans to do. I have a real issue with her way of thinking. It's criminal in my mind and at the very least totally irresponsible, regardless of her "excuses", she's screwed up big time and did so knowingly. All debt is not evil and if you can pay your bills it's really no one else's business how much debt you have. This is a different situation and she is basically wanting to dump her bills on the rest of us. Tell her thank you for adding to our costs.

 

[Aliceacc]

"We live on Long Island and my children can't wear clothing from regular department stores!!!" QUOTE]

Uh- oh. I'll call the moving vans!! My kids are pretty much always in stuff from Target, Sears, or JC Penneys!

 

[hinodis]

What bothers me the most is that is seems so calculated. CC's in her name only and his name only. Her name not on any cars. All our stuff is in both names. I am just beside myself. 30 years is a really long friendship.

 

[holly7347]

How was she able to get a credit card in only her name is she doesn't have any income? That part I don't understand. I really have no idea what the laws. I think she should contact one of those credit card counseling companies or a lawyer. But I'm not sure what you can really do anyway. If they are getting a pool and going on vacation even with all that debt it doesn't sound like they really care.

 

[cglaura]

If the house is in her name also, they will sue, get a judgement, and depending on the state, the judgement can go against the house. Regardless of loan to value ratio. Unsecured debt/cc can't get a lien on your house as real property, can only get a lien on cash assets, but usually a court judgement can. Again, this is all subject to state law and many things, but she's crazy if she thinks they will just forget about $70,000.

 

[CarolA]

It doesn't matter about the NAME on the credit card. What matters is (A) the laws of your state and (B) what you put on the application. Since she has no income assume she put DH's info on application. (My first credit card was in MY name, but based on my parent's credit LOL!)

Plus since her DH can't pay the bills exactly how this "seperate" accounts issue is going to work is hysterical. It just means that instead of ONE court offical they get two! End result, foreclosure and repo!

If you want to watch the train wreck do, but I would not give any advice. It's a waste of your effort and just consider it "entertainment" However, I bet the "story" was told for sympathy and you will be "hit" for a loan soon! RUN!!!!

 

[roadtripper]

I feel for you-- that's a tough spot to be in as a friend.

I do agree with other posters, though-- she seems to be looking for a shoulder, not a way out. You don't buy a pool and plan pricey vacations when you are stressed about money and trying to clean up your act.

Honestly, people like her need a reality check. I hope she doesn't find herself in a real emergency--what will she do?

Good luck to you.