Information on credit cards and community property law - The Bills.com Blog

I am retired, live on teachers pension and social security. I have stupidly run up 18k with Capitalone and 8k with Washington Mutual. In addition, my grandson has defaulted on his student loan that I consigned for with Citicorp. I have been current with my credit cards until a month ago but was shocked to find that the Capitalone account interest rate has soared from 5.9% to 27% while the Washington Mutual account went from 9% to 26%. Two years ago my credit rating was 768. I suspect that my grandson's debt (which is also mine) has dragged my rating down to the point that both credit card companies increased my interst rate. In additon, the Capitalone card monthly payment increased from $500 to over $1000. I have called Capitalone and explained all of this to them. I have been a loyal customer since 2002 and was NEVER late on a payment. They would not budge and would not offer any help for me. I do not want to default on my obligations but I was struggling to make the $500 payment and now its twice as hard to pay this debt. What can I do, short of filing bankruptcy? Please help!

Because you co-signed for your Grandson, and that loan is now in default gives the credit card companies reason enough to invoke what is called the Universal Default Clause. Universal default is the term for a practice in the financial services industry for a particular lender to change the terms of a loan from the normal terms to the default terms (i.e. the terms and rates given to those who have missed payments on a loan) when that lender is informed that their customer has defaulted with another lender, even though the customer has not defaulted with the first lender. My suggestion to you is to try and get current on the loan that you co-signed for your grandson because as long as that loan is in default, it will be reported so on your credit report. If possible, try and continue to make the payments on the credit cards, and call them up again to negotiate your interest rates. If that is not possible, then depending on whether you own a home, you could go in for secured debt consolidation loan, credit counseling or a negotiated debt settlement service. Each one of these options has its pros and cons. You can find out more information about each of these options on Bills.com.

Hello, I have a Judgement against me for credit card debt. The county sheriff showed up with a Writ of Execution and a Levy to take my car. They took my car. Now the Attorney will not work out any payment arrangement with me for me to get my car back. It is either the full amount of the debt, $15,000.00 or I never get my car. I am now unemployed, and have no way to go get a job because of this. What can I do? My husbands name is on the Title of my car as well, but it stats my name OR his name. Will that hurt my case since it has OR, and not AND? Also, can we file a Motion to dissolve the Write and Levy, due to my car being partially his Marital asset? Thank you, Karen Thoma

The first thing that you need to do is hire an attorney in your area to defend your rights in this situation. You may have several ways to get your vehicle back without paying the full balance of the debt which you obviously cannot afford. First, if your state offers an exemption for automobiles or general personal property, you may be able to have you attorney assert your exemptions, making it financially infeasible for the judgment creditor to proceed with the sale of the vehicle. If your attorney does not think that is a viable option, you may be able to file an emergency petition for bankruptcy protection; if you file before the vehicle is sold, the automatic stay created by the bankruptcy filing may allow you to regain possession of the vehicle while your bankruptcy case is proceeding. To read more about bankruptcy, you can visit the Bills.com Bankruptcy Resources page at http://www.bills.com/bankruptcy/. Finally, since your husband's name is also on the vehicle's title, and only your name on the credit card, the creditor should only be entitled to half of the vehicle's equity (assuming you do not live in a community property state); if your attorney thinks that your husband is entitled to compensation for his interest in the vehicle, he should be able to help you exert that claim, which may make selling the vehicle a unprofitable measure for the creditor. I am not licensed to practice law in your state, nor do I know enough about your situation to offer good advice; I strongly encourage you to consult with an attorney in your state as soon as possible. The sooner you take action, the more likely it is that you will be able to reclaim your vehicle; if the creditor sells the car before you take steps to reclaim it, it will be much more difficult to take back the property. For more information for consumer struggling with credit cards and other debt, I invite you to visit the Bills.com Debt Help page at http://www.bills.com/debt-help/.

My friend has a levy against his property for a credit card debt. They did not take the property but can he sell it? I am thinking he can but the $ would go to the credit card company.The levy is for $14,000. The propert is only worth about $6,000. Can he sell it?

If the credit card has obtained a levy on the said property, that gives it the first right to the proceeds of the sale, regardless of whether the proceeds of the sale is enough to cover the levy. Therefore, you are right, the money would go the credit card company.

My husband was self employed for several years and developed credit card debt. He suffered an injury a year ago and has been unable to return to work. He has defaulted on several business credit cards and has closed the business. Now one credit card company is seeking a writ of execution against both my husband and his company. They are requesting our bank seize our business and personal accounts and to obtain a lien on our real property. We are unable to file for bankruptcy because we have too much equity in our home; however, we are unable to get a home equity loan to pay the debt because the credit card default has decreased out credit rating. We are residents of WI, cannot afford an attorney and are wondering exactly what the laws are in WI regarding default on an unsecured credit card debt.

I strongly encourage you to consult with an attorney licensed in Wisconsin who can carefully analyze the details of your situation and tell you the options available to you under your state’s laws. For example, even though you have too much home equity to file Chapter 7 bankruptcy, you may be able to file for bankruptcy protection under Chapter 13 which could help you resolve these judgments and protect your assets. To read more about bankruptcy, I invite you to visit Bills.com at http://www.bills.com/bankruptcy/. Given the possible repercussions of this creditor's efforts to enforce the judgment it has obtained against your husband, the cost of hiring an attorney will likely be well worth the expense. I can tell you that Wisconsin law does offer some protections to debtors whose creditors are attempting to execute judgments against them. For example, you may be able to claim an exemption of at least some of the money in your bank accounts; much of your personal property may also exempt from creditor execution. To read more about Wisconsin’s exemption laws, you can visit http://www.bcsalliance.com/debt1_wisconsin.html.

Hello, my husband lost his job months ago, his employer fought his unemployment and won, and now he is not working (just any side jobs he can find), and I am working part time. We have acquired around 50,000 in credit card debt using our cards to pay for living expenses, since his job in sales only brought in about 15k in the past year. We own a home, and have not been late yet on the mortgage. We also own 1 car, free and clear, and have one that we owe about $3800.00 on. My question is, what can I do to keep my car without the creditors assigning a lein against it. Our credit cards are just going 30-60 days, and I cannot promise the creditors anything, since every penny we scrape together needs to go towards the $1500.00 mortgage and utilities, food, etc. It is probably worth 16-18000, but if I lose it I cannot work at all. We also have 3 children, and my husband has been looking for work for months! Thank you in advance!

I don't think the credit card companies can place a lien on your vehicle (at least, I have not heard of many instances of them doing so). Because you are already late on your credit card payments, a cash out refinance is not an option (which could have bee a feasible option if your credit was good). The best option I can think of for you is a debt settlement program. I suggest that you get a free consultation from Freedom Debt Relief (www.freedomdebtrelief.com, 1-800-544-7211). They are the leaders in this business, and after they look at your situation, they will be able to tell you what your best solution is.

I live in New Mexico and have a judgment against me. I tried to make payment arrangments with the creditor before and after the judgement but they refused anything but the full balance. My only income is a pension,I have a 30 year morgage on my house and have two vehicles one paid for and the other I still owe. what are they going to do now ? will they put a lien on my house or car? i have no intentions of ever selling my house? My husband died and left me with this debt to deal with when he was the only one with income,it was half his resposibility right?

I am sorry to hear about your situation Lisa, but you are mostly correct that they could put a lien on your home. They could also try to levy a bank account (so don't keep a bunch of cash in your bank account) but they probably cannot garsish you since your income is protected if it is indeed pension income... but really you should call and speak to an attorney to make sure that everyting lines up. Good luck.

is there statue of limitations on the dept,

Yes, check out: http://www.bills.com/collection-laws/ This will have the statute of limitations in your state.

I live in WA state. I just found out that my husband of 10 years (we are currently seperated) charged up two of my lines of credit and credit cards without my knowledge (old cards that I thought I had closed). He has been making payments regularly and intercepting the mail so I had no idea this ever happened, until I pulled my credit report. I feel so stupid! Am I liable for the debt or can I call the bank and claim the charges and cash advances were made fraudulently? He is not on the accounts as a co signer or authorized user. The accounts are in my name only and were abtained prior to the marriage. The money went into his business checking account which I am an authorized signer (trying to get removed). Thanks in advance for your reply.

Seems like this has been going on for a while now. You will need to check what the credit card issuer's policy is about fraud charges, some of them require that you report the charges as soon as you notice them, and others may limit the amount they will reimburse. The fact that you are still not legally separated will also complicate the matters in that the credit card companies might not agree to your fraud claim. Still, call up the credit card companies immediately and see what they have to say, and if nothing else, cancel the accounts so that the charges do not continue.

Hello, I live in Arizona. I cosigned on two credit cards for my son, and he ran up large unexpected balances on both that he cannot pay. I also cannot pay the cards. Can the credit card company sue my husband or just me? Thanks, Martha

Arizona is a community property state. The cards that you co-signed for, might be construed as community property and therefore the collection agency might just try to collect from your husband as well. I am not an attorney, so I don't know about the details, you should consult with a qualified attorney just to be sure you know what the consequences will be.

Hello! I live in texas, And would like to know if they can put a lien in my home I have to many credit cards. And i can't pay because my husband lost his job. I am not in the loan but i am in title. please help! I owe almost 10k. and the credit cards are only in my name.

You need to arm yourself with knowledge about Texas law so you understand your rights options. The answer I give the reader at the very top of the page here is a good place to start to learn about the general issues, although it is not specific to Texas. Next, you need to understand some of Texas' rules. See this page for laws called "statutes of limitations" and exemptions that may apply for you: http://www.bills.com/collection-laws/ Next, consider your options. You may be a candidate for either debt negotiation and settlement, or debt consolidation. Here is a great resource to learn about debt negotiation and settlement: http://www.bills.com/debt-negotiation-and-settlement/ Start here to learn more about debt consolidation: http://www.bills.com/debt-consolidation/ For a free online debt consolidation quote, visit: https://www.bills.com/debthelp/consolidate_debt/ Finally, and this is very important, if you receive any summons or document from your local court, act on it! You always have options, and ignoring a summons or court order always results in fewer options for you.

i have a checking account that i am about to close due to a lien from a creditor has put on it , if i open a checking account at another bank will they be able to acquire that info and put a lien on that checking account also

Not immediately. However, you have to assume that a motivated creditor will eventually find your new account. I recommend you consult with an attorney in your state who is experienced in consumer law or bankruptcy to determine what your rights are in your state. You may be able to prevent the creditor from levying you bank accounts.

I live in Arizona and my wife purchased a car during our marriage that we're thinking about defaulting on. She does not work, only I do...and I am not listed on the loan. I understand the whole "community property" concept, but to what certainty will the creditor come after me (the non-listed spouse), or will they just keep pursuing her? thanks

In theory, as residents of a community property state, both spouses are liable for the debts that benefit the community (with the exception of student loans). Unless Arizona has a law that reverses this general rule, the non-signing spouse has liability for debts of the signing spouse. In practice, however, creditors rarely pursue spouses in community property states. That is not to say it has never happened -- but I have not seen it happen.

we live in Washington state and my boyfriends ex wife defaulted on a credit card with Citibank after their divorce. he has since found out that it has been posted on his credit report. he was and authorized user not a co signer and has not received a letter of default from Citibank. how does he go about removing it from his credit report?

He should send a "dispute listing" letter to the credit reporting company that is displaying the erroneous information. See the Bills.com debt self-help page for a sample letter. Then, in three months or so he should get another credit report to make sure the item was removed.

My husband has an american express credit card I am not listed as autorized user, never signed an agreement. he is dying from liver cancer am i libel for that debt after he passes away. we live in california

The decedent's estate has liability for his or her debts, and not family members. Please read Am I Liable for My Deceased Spouse's Debts?, and in particular read the section "Deceased spouse's debt" to better understand the issue. Unscrupulous collection agents tell family members they have liability for a decedent's debt, but that is not the case unless the family member was a co-signer on that particular account.