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My girlfriend's father opened joint credit cards, racked-up the balances, filed for bankruptcy but didn't include the cards.
My girlfriend's father opened numerous joint account credit cards when she turned 18 for her to go to college. Unfortunately he used them for some college and a lot of personal stuff and then filed for bankruptcy a few years later in 2007. My girlfriend then was forced to take over the debt and has been doing so for a while. She was under the impression that all this was taken care by her father as she never used these cards. She has done a great job using a debt consolidation company, but with the current economy, she has been struggling. She also didn't understand that she was going to be held responsible for this debt at the time her father activated these cards. Is there any way out for her? What can she do?
This is a terrible situation, both financially and regarding family dynamics. I cannot give you any specific suggestions because I do not know your girlfriend's income and debt load, and where she is in the debt consolidation program.
Assuming she is working with a reputable company, the most difficult time for most people enrolled in a debt consolidation program is the first six months. Generally speaking, if people can get their spending under control and develop the discipline to put money into their savings account that the debt consolidation company will use for cutting their debt, they can see the program all of the way through to debt freedom.
However, just as each person is different, each debt situation is different. If your girlfriend is really slipping behind with no hope of achieving debt freedom, then it might be time to consider bankruptcy. See the Bills.com article Types of bankruptcy for more information.
One last thought that may be a long-shot: If your girlfriend never used the cards or authorized the father to open the accounts, then she may have a fraud argument. Given that the relationship with the father is harmed greatly, your girlfriend has nothing to lose by taking all of her documentation to an attorney for him or her to review the facts and ask the fraud question. If there is a preponderance of evidence proving fraud, then your girlfriend may be able to free herself from the debt and pin it on the father where it belongs.
I hope this information helps you Find. Learn & Save.
Best,
Bill
www.bills.com/
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Debt statistics
Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Auto loan debt was $1.62 trillion and credit card was $1.12 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Each state has its rate of delinquency and share of debts in collections. For example, in New York credit card delinquency rate was 3%, and the median credit card debt was $420.
To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.
