Defaulting on credit cards

[FutureKelley]

My fiance got himself into a mess with two of his credit cards. We got to the point where we could no longer afford to make the outstanding minimum payments with the fees they racked on every month. He called them and tried to work out something... they refused, so he in turn defaulted on both of them. I believe he owes somewhere around $2,500 for the both of them.

I've been doing a little research and some websites say that it will go into collections... others say that he could be sued and wage garnishments could come into effect.

My question is, how will this effect me and my credit once we are married? Could they potentially come around and do a wage garnishment on me if it came down to it? With them cutting down his hours at work, there is no way this will ever be paid off before the wedding... and I'm really afraid of getting myself into financial mess. I have worked very, VERY hard to get my credit where it is (and I have been told that it is excellent for someone my age with a limited credit history) and I really do not want anything to negatively affect it.

I know when you marry you get the good and the bad... I'm just wondering how much bad is going to come with it?

[Brian's Bride]

I'm not sure about the wage garnishment thing, but I wanted to let you know that DH also has sub-par credit (just barely hanging on to average) and my credit is extremely good. It'll help his credit being married to you. We were advised to add his name to my major credit cards and car loan and his credit scores would improve. Our numbers were ran after marriage and mine didn't go down at all by being with him. But my situation is different because DH didn't default on anything, just had a bunch of late payments. Those fees can kill ya!

[Kfancii]

My recommendation to you would be if you want to save your credit, keep your credit cards and finances seperate. Your credit will only be pulled together if you apply to buy something jointly. Due to my ex defaulting on joint cards 2 years after we were divorced, my credit rating was damaged even though I was working 2 jobs to keep my head above water. The credit card companies he defaulted on came after me for the payments and the only way I could keep them at bay was to file bankruptcy. That was about 5 years ago, and I have been able to re-establish credit on my own to finance a house and a car, so I have done quite well, but that bad mark will follow me for at least 10 years. When I remarried, we decided it was best to keep all of our funds separate and will even file our taxes as married but individuals.

[FutureKelley]

We do plan to keep our credit cards seperate once we are married, at least for awhile. Actually, FH will not have any credit cards... I've already taken them all away from him and cut them up. :P Once they are paid off then he can apply for a new card, but until then it's better this way for the both of us.

We currently have a joint checking/savings, but that is all we share. My mom co-signed for my car loan, so it's under mine and her's name. And the house, my aunt and uncle took out the loan for us so neither of us have our name on there.

[Jacobs_Girl]

For those default credit cards, if they were in his name only then you shouldn't have to worry about them going after you.

When you default on something it first goes into collection. After several attempts to collect depending on what it is. Usually if it is something like a car it gets sold at an auction and the remaining balance is what they go after you for, but in this case it's a credit card. So it will go straight to court and yes they can garnish his wages but not yours unless your name was on those cards.

When the debt was in collections you should of been able to make arrangements to pay for the debt. Was that not offered?? Usually those collection companies, if you talk to them they will take payments per month.

[FutureKelley]

For those default credit cards, if they were in his name only then you shouldn't have to worry about them going after you.

When you default on something it first goes into collection. After several attempts to collect depending on what it is. Usually if it is something like a car it gets sold at an auction and the remaining balance is what they go after you for, but in this case it's a credit card. So it will go straight to court and yes they can garnish his wages but not yours unless your name was on those cards.

When the debt was in collections you should of been able to make arrangements to pay for the debt. Was that not offered?? Usually those collection companies, if you talk to them they will take payments per month.

It has not gone into collection yet. We are waiting to hear from them once it does. The credit card companies would not offer him any sort of payment plan, which is why he ended up defaulting. It's my hope that we can instead afford the collection payments and get it paid that way.

[caligal85]

You want to keep your name off of his stuff. Once you're linked, if he can't afford the collections payments, they'll start going after assets, and anything listed in your name can be affected.

[NurseLau84]

I'm sorry this happened to you. I urge you guys to get it paid off as quickly as possible, because the negative impact will affect his credit for at least 7 years after......which will in turn affect approval for home loans, car loans, and other lines of credit. Because DH and I have high scores, our mortgage interest is 5.75%, which saves us thousands of dollars as opposed to someone with a lower score.
The number one thing affecting credit scores is paying on time, every time. A family member of mine had destroyed her credit so much, that seeing what a negative impact it has on her life has made me a credit nazi. I monitor my credit and actually pay monthly for that service. I had also spent HOURS researching credit do's/don'ts, etc before we bought our house.
Wishing you luck.

[Jacobs_Girl]

It has not gone into collection yet. We are waiting to hear from them once it does. The credit card companies would not offer him any sort of payment plan, which is why he ended up defaulting. It's my hope that we can instead afford the collection payments and get it paid that way.

Keep in mind that when it does go into collections that is a negative strike on his credit report weather you pay of the balance or not, but at least he paid it off. Most collections company buy his "debt" from the actual bank or company he defaulted from for less than the value. For instance he owe's Bank of America $2,500 the collection company with buy it from Bank of America for $1,500 so even if they collect the whole amount plus the "fees" they ad on they always make money.

Usually you can talk them out of the fees with a good explanation why it defaulted in the first place. Make sure everything is documented with a paper trail, you want everything in writing so it is backed up just in case they go back on their word.

Our company uses collection agency and I use to date a collection agent and thats all he could talk about. No wonder I only went out with him once LOL

Good Luck!

[WebLady]

From what I've heard is that they will turn over the debt to collections and harass you until some sort of arrangment is made.

I don't think they can sue or garnish wages over such an amount.

My recommendation to you would be if you want to save your credit, keep your credit cards and finances seperate. Your credit will only be pulled together if you apply to buy something jointly.
My thoughts exactly!

I would look into some sort of debt management thing; to help him deal with the credit card issue and help him learn how not to get into trouble with such debt again.

:goodluck:

[Jacobs_Girl]

I don't think they can sue or garnish wages over such an amount.



They actually can depending on the company and the person handling the case and seeing how the economy is not so well the chances are greater.

It only takes about $40-$50 to file and have the case heard depending on where your located. Once the judgment is made against you then they can ask the judge to be able to garnish wages.

Most big collection companies have attorneys that handle these cases on retainer. Then they would have a private investigator (if they dont know where you work already, most of the time when u apply for a CC you list it in your application) get them that information and BAM next thing you know your employer gets a notice to garnish your wages, including attorney fees.

[KMS]

Well, first of all...I know nothing about collections or anything...sorry! However...My dad had about $25,000 in credit card debt, it was over his head, and he couldn't dig his way out. He consolidated his credit and went through a company that payed off his credit cards and then he made monthly payments to that company. This way he didn't have to pay the atrocious finance charges any longer. The company did charge a small fee for their services, but not nearly as much as the finance charges were racking up to be. It did damage his credit just a little, but he payed off his credit cards in a few years and is now debt free.

[FutureKelley]

I am very happy to say that after a lot of phone calls, yelling and frustration, we have finally worked out a deal with Chase. All accounts are now up-to-date and on a payment plan. :whoohoo:

[gwenshack]

I am very happy to say that after a lot of phone calls, yelling and frustration, we have finally worked out a deal with Chase. All accounts are now up-to-date and on a payment plan. :whoohoo:


Yay! Glad to hear it! That must be one giant sigh of relief. :)

[NOTKT]

Whew, sounds good!