My friend's parents allowed her to use their identities to open up about 13 different credit accounts in their names. She kept up w/the payments and never fell behind, but her mother finally realized that she might have gotten in over her head. Her mother took the cards away, and started contacting all of the creditors, telling them that she never gave permission to her daughter to obtain all this credit in her name (even though she did). A couple of the creditors sent a form to the daughter, which she was supposed to sign to supposedly accept legal responsibly for the debt. She's afraid if she signs this form, that the creditor can then say she admitted to defrauding her parents, and have her arrested. There's no way she can now pay off all at once the money that is owed, and the parents are now unwilling to pay the debt. One of the creditors is already taking her parents to court. What are their options? They don't want to press charges against their daughter.
2006-07-05 14:17:18 · 6 answers · asked by tictickchick 3 in Business & Finance ➔ Credit
The parents have too many assets to declare bankruptcy, but they aren't willing to just pay the bills off either. They say that they won't press charges, but they have basically said that they won't do much to defend their daughter either. They supposedly knew all along that she had these debts in their names, but now they are saying they only authorized "some" of the debt, not all of it. They've hired a lawyer, who seems to be taking them for a ride...he told them to stop paying the cards...but now that they are suing the lawyer is saying that "someone" needs to start paying them. He's going to go to the courts and defend the parents, but he said that he is not there to defend the daughter...which basically means he might sell her up the river. He said that the courts might agree to have the daughter sign something to accept responsibility for the debt...but if she does this, does that mean she can then be arrested?
2006-07-05 14:21:59 · update #1
When a name is used to secure a debt the owner of that name is ultimately responsible for the debt. Mom should have minded her own business. If her daughter was managing the accounts properly then there was no reason for Mom to throw a monkey wrench into the gears.
2006-07-05 14:31:04 · answer #1 · answered by dudezoid 3 · 2⤊ 1⤋
When your friend's parents cosigned with her on those credit cards, they legally agreed to be responsible for the debts. The only way out of that obligation is bankruptcy or if they can show that your friend used their information without their permission--i.e. fraud. Your friend shouldn't make any decision before consulting a lawyer, but my non-expert advice would be that she should not sign the form. This is a difficult situation for the family, but the reason why cosigning exists is to protect the creditor in case the primary borrower makes bad credit choices and "gets in over her head". However, the parents (and your friend) would do well to talk to the credit card companies and see if they can work out a payment plan. It's very expensive for those companies to go to court, and most bad debts are never paid in their entirety. The credit card companies would almost certainly settle for 70 cents on the dollar, and possibly much less (especially if they can receive the money in a lump sum). I've seen lump sum settlements for as little as 20 cents on the dollar. But the longer this goes on, the worse credit both your friend and her parents will have, regardless of how the situation eventually resolves itself.
2006-07-05 14:37:45 · answer #2 · answered by JD 2 · 0⤊ 0⤋
As long as the parents don't press charges, I don't see how the creditors can have her arrested. They can demand payment, and the judge can order that the daughter pay it. The parents were stupid for letting her do it. Legally, they are responsible for the payments, since they LET her open the accounts, and knew that she did...unless they got something in writing from her saying that she would be responsible for the accounts. Good luck...the girl needs to pay the accounts, even if it is just a little at a time.
2006-07-05 14:28:04 · answer #3 · answered by Fire Storm 2 · 0⤊ 0⤋
You don't say if the parents co-signed for the loan or not. If they did, the parents are on the hook for the loan. But I'm betting they didn't, right?
Was your friend 18 when she got these cards? That will play into her defense.
She is definately going to need a lawyer. The companies are not going to just kiss off this debt without a fight, and will most likely try to file fraud charges.
2006-07-05 16:40:37 · answer #4 · answered by Anonymous · 0⤊ 0⤋
This was a bad idea from the get go. You cannot co-sign for someone that many times . If the person defaults the responsibility is the co-signer. Now her parent credit is in disrepair for a very long time. If it is a lot of money the parent and her can file for bankruptcy . It is a 7 years blemish on their credit report.
2006-07-05 14:25:31 · answer #5 · answered by Richgirl 3 · 0⤊ 0⤋
Don't you think a lawyer might be better for this than some anonymous person on Yahoo Answers?
2006-07-05 14:25:01 · answer #6 · answered by fcas80 7 · 0⤊ 0⤋