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What happens if we just stop paying?

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My wife is a homemaker and has about $32K in credit card debt in her name alone. I am about to be laid-off.

 

What will happen if we just stop making payments? Will my credit score be affected even though the debt is not in my name? We never answer the door so I figure it will be very difficult to serve us with a court order. Even if they get a judgment against us it looks as if neither of us will be working for a long time so they'll have a hard time collecting anything.

 

Please shoot holes in this plan of mine.

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ummm obviously this is not a good decision... even IF it is her name alone... it will ruin her credit to just "not pay" and in this environment every bank in the world will be suing right now for that much debt whether she works or not. If she has a bank account that is joint with you, they will attach to it.

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ummm obviously this is not a good decision... even IF it is her name alone... it will ruin her credit to just "not pay" and in this environment every bank in the world will be suing right now for that much debt whether she works or not. If she has a bank account that is joint with you, they will attach to it.

 

yeah we know her credit will be toast, but that's okay as long as my credit stays good.

 

If they sue her and gain a judgment against her, how can they collect if she never works and has nothing in the bank?

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maybe someone else can tell you... you obviously have your mind made up or you would not be thinking this is a good idea. If I was her, I would not want to go around the rest of my life with "bad credit" just because my profession is to stay at home. If you are being laid off then someone is going to have to work whether it is you, her or both. Either way, they can and will find her and judgements can last up to 20 years in some states.

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There really isnt much for them to do. If she doesnt have any assets or money or a job theres nothing for them to take.

 

But I think in some states when you apply for a mortgage and some other things both of you have to apply together and her credit can cost you a lot of money in interest and fees

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My wife is a homemaker and has about $32K in credit card debt in her name alone. I am about to be laid-off.

 

What will happen if we just stop making payments? Will my credit score be affected even though the debt is not in my name? We never answer the door so I figure it will be very difficult to serve us with a court order. Even if they get a judgment against us it looks as if neither of us will be working for a long time so they'll have a hard time collecting anything.

 

Please shoot holes in this plan of mine.

 

Well You don't have to open the door to get served. You're eventually gonna have to leave to do something. (Don't think private process servers won't wait for you) Not to be harsh either, but as a man, why would you have no concern about burning her credit. Call me old fashioned, but I'm from a school where men look out for their women. And before you flame, I'm not talking about how your unfortunate job loss. I'm talking about your cavalier attitude toward the fact thats it's all in her name. (ie it wont affect me and we don't answer the door anyway) In a lot of ways it loosely translates to better her than me.

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I dunno, just a thought...if you're being laid off and you have bills you can't pay, maybe she should look for a job? This is what I did when my husband lost his job.

 

Basically, I see you have three options:

 

1. Someone's gotta work. And pay the bills.

 

2. Don't pay the bills, be sued. When you lose, judgements will be filed against you, bank accounts garnished, etc...

 

3. File bankruptcy. Start over.

 

Either way, income has got to come from somewhere to keep a roof over your head and food on the table, no?

 

Pick one...

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alot of cracks ups in here I think majority of the respones in here folks dont dont even live in the U.S. if they do they dont know the economy situation and finding a job is tough even finding a job at walmart is hard to get for some reason. if the bank serves you they will serve you if its worth their time and money lets say you have 10 credits cards spread out between the 32k ok they might not sue you, but if its one card they might try to sue you expecially in this time banks that got bail out money LOVE to SUE cause they got money to throw away to sue even if its your tax money at work. Like above poster suggested file bankrupt start over might be your best bet and safe bet.

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I dont understand how people are just like "well Im not gonna have a job so nobody is gettin paid so whats the best way for me to get around dealing with the consequences of my irresponsible actions?"

 

I can tell you right now, Im 27 years old a college graduate and have a career but God forbid if something were to happen tomorrow and I lost my job, I would be pounding the pavement looking for work! Im not too proud to work at Mcdonalds or Wal Mart, hell, even both at the same time to keep myself afloat until I was able to find something in my field. Desperate times call for desperate measures...

 

And a question I initially had when reading the OP: How in the world did your wife qualify for 32k in unsecured debt with no job, assets or verifiable income?? :blink:

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alot of cracks ups in here I think majority of the respones in here folks dont dont even live in the U.S. if they do they dont know the economy situation and finding a job is tough even finding a job at walmart is hard to get for some reason. if the bank serves you they will serve you if its worth their time and money lets say you have 10 credits cards spread out between the 32k ok they might not sue you, but if its one card they might try to sue you expecially in this time banks that got bail out money LOVE to SUE cause they got money to throw away to sue even if its your tax money at work. Like above poster suggested file bankrupt start over might be your best bet and safe bet.

 

 

I live in NJ and there are always places hiring waitresses, cashiers, gas attendants, ect...

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I've been there. We chose to stop paying credit cards. Most were in my name & I was not working. We owned a business that declined after 9/11 when companies stopped spending money. We used credit cards to help 'weather the downturn' hoping business would pick up. It didn't and we finally cut our losses and looked for jobs. It took many months.

 

Now.. First and foremost, I believe we should all honor our debts. However, protecting your family's home, feeding and clothing your family & having a car to get around takes priority over unsecured debt. You've got to prioritize. Along with that, you are in the right place here on Credit boards to research your options.

 

Second, I don't want to see anyone judge someone for their choices. I had two children under 2 when hard times hit. I made a commitment to stay home with them and I was willing to do anything to keep them home until the youngest was 4. I have lots of reasons for that, which are right for me & I don't want to see anyone judged for their choices. He came with a question, which most of us have been there, or else we wouldn't be on this board. I never heard him say, he refused to find another job!? So why are you discussing that? How come I was qualified for a $30k credit card with no income? Answer, I had excellent credit. Leave your judgment somewhere else!!! Let's answer the best we can without judging. It's his choice to make and his stressful life to live the way he chooses, just like we choose for ourselves.

 

For me, in my experience, I had two options:

1) Quit paying, lay low, chargeoffs happen, debts get sold, lawsuits will happen.

2) Quit paying, file bankruptcy, no lawsuits.

What state do you live in? It matters whether it is a community property state or not. I'm in NC, and it is NOT a community property state which meant that what was my husbands was his and what is mine is mine. My debts cannot affect his credit. We moved all our money into an account only in my hubby's name at a different bank. We opened one joint account only transferring money into it if it was absolutely necessary. We did have a couple accounts in his name, which have affected his credit, but not as much as mine. His were the first to be reconciled when we could.

 

Here is what might happen as a result of choosing an option:

Option 1 - Stop paying. Don't answer the phone. Get the bills & save them. Cards get charged off. Some get sold to JDB's. They call like crazy. You quit answering the phone. They send you bills in the mail, save them. Your are stressed all the time, but hey aren't you stressed already? Eventually someone sues. Do you have what it takes to fight it? It was a hell of a lot of work for me, but I was always a good student. I spent countless hours online & in the library. Wrote a few oppositions to motion for summary judgement? Does this sound fun? :blink:

 

My results: no judgements & all debts beyond SOL, however I had 4 lawsuits filed against me. Hubby got good job. I got a good part time job when my youngest was 4. We paid some in full, settled most for 1/2 the balance. Still some dings on the credit report, but 4 years later we are approved for a mortgage.

 

Or maybe with Option 1, you don't answer the lawsuits and they get judgments. Judgments can potentially stay on your CR forever. They will keep an eye on you until you have some asset to claim. You've just got to know whether you are in a community property state. Do you want to live like this? At some point you pay, or you live with that judgment hanging over your head for a long time.

 

 

Option 2 - Stop paying. File bankruptcy as soon as you qualify. Depending on your state, your attorney and the new bankruptcy laws (which have changed since I last looked at them), you might have everything discharged. We met with a few attorneys, free of charge who were very helpful. For us, though, by the time we were more serious, we didn't qualify under the new laws. We made too much... which was funny b/c I didn't know how we'd even pay back the debts we had!!!

 

Bankruptcy stays on your CR a limited time, unlike a judgment. Bankruptcy's have been successfully disputed off many CR with the help of these boards. If you aren't looking to move anytime soon, you can credit repair over time. However with BK, you'd be able to qualify buying a house in just a few years (although things are changing daily in the mortgage/banking industry).

 

Do some searching on this board for bankruptcy. Also spend some time in the 'Help I've been served' forum to get a feel for what you will face with a lawsuit.

 

For me, the lawsuit route worked out ok b/c I can learn things pretty easily & love research. Although, BK would have been much less stressful, and I bet we would have had a better credit score at this point too.

YMMV. Just read, read, read and read some more.

 

Good luck.

Edited by Hello Me

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stop preaching about judgment. :blink:

 

Please shoot holes in this plan of mine.

 

It looks like he wants to be told this is a bad idea, because it is.

 

He also never once states "Im planning on looking for a job immediately but what route can I take to keep my head above water during my search?" No... it was "We never answer the door so it will be hard to serve us"

 

Pretty much sounds like he had admitted defeat and is now just looking for the easiest way to avoid dealing with the people with whom he owes money.

 

Maybe I am judgmental but that kind of attitude just seems lame.

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alot of cracks ups in here I think majority of the respones in here folks dont dont even live in the U.S. if they do they dont know the economy situation and finding a job is tough even finding a job at walmart is hard to get for some reason. if the bank serves you they will serve you if its worth their time and money lets say you have 10 credits cards spread out between the 32k ok they might not sue you, but if its one card they might try to sue you expecially in this time banks that got bail out money LOVE to SUE cause they got money to throw away to sue even if its your tax money at work. Like above poster suggested file bankrupt start over might be your best bet and safe bet.

 

 

I live in NJ and there are always places hiring waitresses, cashiers, gas attendants, ect...

 

 

Thank You!!! I live in the US too. The real problem with, "the there is nothing out there" cop out, is that people have become accustomed to the mind set, that looking for a job entails sitting in front of their computer. While I don't knock this for a position in your chosen/qualified field. Pounding the pavement will result in some type of job. These jobs might not be pretty but they are around.

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How about giving someone the benefit of the doubt first before slamming them.

 

Maybe they aren't exactly getting across everything they're thinking.

Didn't sound to me like a slackard as much as in a stressful situation and wondering if it's crazy to stop paying on the cards....which it's not. The bleeding's got to stop somehow. The excess spending's got to stop sometime.

 

I'm a very responsible person, but when I was in the position I'm guessing he was in, I surely wasn't in a positive place, so I would have been slammed too for the thoughts that were running through my head.

 

I was thinking "Hey, am I crazy to stop paying. Will the police come get me? Will I go to jail? What's gonna happen in the long term?" ...and...put me down if you must...with almost everything in my name, I was running through all the options...and b/c I was not the bread winner we decided to let my stuff charge off for the very reasons he was mentioning...all that ran through our plans. Although it was never our intention to set ourselves up like that, we made our subsequent choices to ruin my credit based on that.

 

"Please shoot holes in this plan" to me is either 1) a jokester or 2) someone really asking for help.

 

Yup, I'm preaching to the preacher b/c I used to be where he was, thinking & planning the same things. And it sucked to be there, so I hope I could add my constructive help.

Edited by Hello Me

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My wife is a homemaker and has about $32K in credit card debt in her name alone. I am about to be laid-off.

 

What will happen if we just stop making payments? Will my credit score be affected even though the debt is not in my name? We never answer the door so I figure it will be very difficult to serve us with a court order. Even if they get a judgment against us it looks as if neither of us will be working for a long time so they'll have a hard time collecting anything.

 

Please shoot holes in this plan of mine.

 

Well You don't have to open the door to get served. You're eventually gonna have to leave to do something. (Don't think private process servers won't wait for you) Not to be harsh either, but as a man, why would you have no concern about burning her credit. Call me old fashioned, but I'm from a school where men look out for their women. And before you flame, I'm not talking about how your unfortunate job loss. I'm talking about your cavalier attitude toward the fact thats it's all in her name. (ie it wont affect me and we don't answer the door anyway) In a lot of ways it loosely translates to better her than me.

 

 

Piggybacking on what chanaz said. God forbid something happens to you, then she'll really be up a creek without a paddle. Then she'll have no income, recent work experience, or good credit history to try to reenter the workplace with. I would look for a better alternative. The worst thing you can do is bury your head in the sand and hope the problems will go away.

Edited by YODEE

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God forbid something happens to you, then she'll really be up a creek without a paddle. Then she'll have no income, recent work experience, or good credit history to try to reenter the workplace with.
When you (or wife) gets a job, invest in good life insurance. That's the first thing we did just in case something did happen. We got just enough to pay debts & the balance on the house, planning that the one left would have to work.

 

The recent work experience didn't affect me getting a job after 6 years out of the work force. And, our credit S-U-C-K-E-D when we got our jobs and we were still able to get awesome jobs. Again, YMMV in this market.

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My wife is a homemaker and has about $32K in credit card debt in her name alone. I am about to be laid-off.

 

What will happen if we just stop making payments? Will my credit score be affected even though the debt is not in my name? We never answer the door so I figure it will be very difficult to serve us with a court order. Even if they get a judgment against us it looks as if neither of us will be working for a long time so they'll have a hard time collecting anything.

 

Please shoot holes in this plan of mine.

 

Will your plan work? Sure. It's stressful though. The only real problem is if you get divorced, she'll be saddled with bad credit and will have a harder time. I'd put your chances of being sued at 1 in 10 - higher if you live in a metro area, less if you live in the middle of nowhere.

 

Are they all positive as of now? Any with low balances she can PIF? (This will help when she is ready to rebuild.)

 

Do you have money that you could settle them for less? If so, answer the phone when the creditors call (they have in house collectors)- this will be up to the first 6 months. As it gets nearer CO, some will settle for as little as 25%.

 

The big problem with COing is the CAs will call family and neighbors for the first 3 -4 yrs. You may be sued, you may not be sued. We were served but they dropped the suit before the first court date. I think it was in part because we lived in a small mountain town and none of local lawyers took collection suits. The cost for an out of town lawyer to come in wasn't worth it (the one who sued us was 5 hrs away). Second reason was we had so many COs that we'd BK on the first suit - in fact, when i answered the phone and talked to collectors, i told them we were had nothing, were judgment proof and were looking at BK. It's very stressful - Settling or filing BK is better for your blood pressure. It's not fun always looking over your shoulder, wondering if a CA was going to call or you'd be served when guests were visiting.

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I was thinking "Hey, am I crazy to stop paying. Will the police come get me? Will I go to jail?

 

that was basically what we thought too. :blink:

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Maybe I am judgmental but that kind of attitude just seems lame.

 

May you never be in the position he is in and if you are, that people aren't nearly as judgmental as you are. :)

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How about giving someone the benefit of the doubt first before slamming them.

 

Maybe they aren't exactly getting across everything they're thinking.

Didn't sound to me like a slackard as much as in a stressful situation and wondering if it's crazy to stop paying on the cards....which it's not. The bleeding's got to stop somehow. The excess spending's got to stop sometime.

 

I'm a very responsible person, but when I was in the position I'm guessing he was in, I surely wasn't in a positive place, so I would have been slammed too for the thoughts that were running through my head.

 

I was thinking "Hey, am I crazy to stop paying. Will the police come get me? Will I go to jail? What's gonna happen in the long term?"

 

"Please shoot holes in this plan" to me is either 1) a jokester or 2) someone really asking for help.

 

Yup, I'm preaching to the preacher.

 

Hey, I'm not slamming anyone. Just stating my opinion. And yeah, I don't know the whole situation. Just what they put forth. So unlike you, I'm just going by what I read, (not what I want to believe it might be) If he wants to add more info, I am open to change my stance on it. Anyway it goes the situation is unfortunate. But a proper question if wanting help would be...I'm about to get laid off and don't foresee any employment prospects. Our family has XXXX in assets and we have XXXXX in liabilities. Does anyone see a way out of this dismal situation, other than bailing on our creditors or declaring BK. Not heh... I'm getting canned soon and all the debt is in my old ladies name. I figure it's not too bad since only one of us will get burned for years to come. (ie her) I get it they are married and one unit. And I wish them a happy and flourishing life. And while I'm not a woman, the first thing that came to my mind was what Yodee pointed out. Not to mention the stress of finance causes many divorces. While I wish this on no one, it can always happen. But hey, at least his CR will be all good... Right??? Or here is an idea, since he still has a job and is not yet laid off. Be proactive and start making arrangements and plans to keep your head above water. Another poster said it best. It seems he has already given up before he is even in dire straights.

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God forbid something happens to you, then she'll really be up a creek without a paddle. Then she'll have no income, recent work experience, or good credit history to try to reenter the workplace with.
When you (or wife) gets a job, invest in good life insurance. That's the first thing we did just in case something did happen. We got just enough to pay debts & the balance on the house, planning that the one left would have to work.

 

The recent work experience didn't affect me getting a job after 6 years out of the work force. And, our credit S-U-C-K-E-D when we got our jobs and we were still able to get awesome jobs. Again, YMMV in this market.

 

YMMV is right. It depends on what she's applying for. Just because you were able to get a job with little recent work experience and bad credit, doesn't mean it shouldn't be a concern, especially in today's environment. You want to have every advantage you can trying to get a job.

 

Even though the topic of death is a worse case scenario, you need to be prepared. That's why I think it's so important to be self-reliant, even if you are married. If that situation changes because of death, divorce, whatever, you're able to make it on your own. Ruining you're credit because you think you'll have your spouse's credit to fall back on is risky. Situations change.

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... But a proper question if wanting help would be...
There in lies the judgment.

 

So unlike you, I'm just going by what I read, (not what I want to believe it might be) ....
So where did he ever say that he didn't care about his wife's credit & they didn't discuss it & she doesn't know about the consequences?

 

...oh, wait....here....

yeah we know her credit will be toast, but that's okay as long as my credit stays good.

 

 

 

In the end, all this back & forth will give him a lot to think about & probably many things he never considered.

Edited by Hello Me

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Maybe I am judgmental but that kind of attitude just seems lame.

 

May you never be in the position he is in and if you are, that people aren't nearly as judgmental as you are. :blink:

 

Amen to that. And kudos to Hello Me as well.

 

I can tell you right now, Im 27 years old a college graduate and have a career but God forbid if something were to happen tomorrow and I lost my job, I would be pounding the pavement looking for work! Im not too proud to work at Mcdonalds or Wal Mart, hell, even both at the same time to keep myself afloat until I was able to find something in my field. Desperate times call for desperate measures...

 

Well, for one thing, that is MUCH easier to say when you have job security and what, 5+ years professional experience? In this economy - where "hiring freeze" and "layoff" are undoubtedly the most common phrases talked about, this is something that a lot of people don't understand when they decide to jump up on a pedestal and say "I WOULD do it, therefore you SHOULD do it."

 

As for the talk of working at McDonalds or Walmart or as cashiers or gas attendants or [insert minimum wage job].....Have you ever attempted to work out the math of paying down five-figure debts with a minimum wage position? Even with two jobs working 60 hours a week, THE MINIMUM PAYMENTS WILL AMOUNT TO JUST UNDER YOUR EARNINGS AFTER TAXES. This is BEFORE YOU FACTOR IN ANY OTHER EXPENSES.

 

Can someone explain to me why people - in several threads at virtually all times - seem to offer the same advice: If you can't find a job, get a minimum wage job. Get 2 minimum wage jobs! Well...if you are in debt, things don't work like that. But that's just a matter of common sense.

 

As for why OP could conceivably - and JUSTIFIABLY - be in this situation and need to seek advice here, I could think of MANY good reasons.

 

Case in point: the U.S. economy. I'm about to graduate with a B.A. in three months, joining over 1.5 million un-employed / under-employed recent graduates with NO professional experience. Never in my life could I have imagined being urged so much by friends and family to find work overseas (East Asia, everyone says).

 

Not that I am trying to draw attention from the OTHER 10 million or so unemployed persons in the US...

 

"But there's always SOME kind of job..............." :)

 

Just some food for thought. :P

Edited by ak7062

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I live in NJ and there are always places hiring waitresses, cashiers, gas attendants, ect...

 

OP does NOT live in NJ, parts of the West Coast are experiencing horrendous unemployment.

 

Here's the math that nobody bothers to do:

OP will need $9/hour, 160 hours/ week- before taxes- just to make the minimum payments (assuming 18% with 2% minimums).

If OP has been rate-jacked to 29%, make that $11/hour.

 

Around here cashiers, gas attendants are $7/hour jobs. If that. Perhaps they pay $9+ where OP lives, perhaps not.

Perhaps there are few/no jobs available. Thanks to heavy layoffs around here, even McDonalds has stopped accepting applications- there aren't even part time openings left, and a waiting list for those already filled. OP may be in a similar situation. who knows? not you or I...

 

"just get a job-any job" is excellent advice to help pay living expenses, but it may or may not help him with his debts. Either he can pay the minimums or he cannot- there is no "close enough" payment option. "close" still eventually gets you sued.

We deal in reality here, not fantasies that delivering pizzas will pay off a $32K debt. Maybe it will, more likely it won't.

 

As to the rolling eyes reply- keep in mind that CB was founded with a "no judgment" policy. If you'd like to make assumptions or judgments about another member's situation- you'll have to find another board, you cannot do that here.

 

 

 

OP: TooPoor covered your question pretty well- pay attention to the advice TP has offered- it's exactly right.

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