I had opened a credit card for a very good friend of mine several years ago. He owes several thousands of dollars to the IRS and now they are taking $2000 from each paycheck...so he is unable to pay on this card. The credit card company is willing to settle for 80% of the entire bill. I am wondering if I should just pay off the settlement fee (it is about $13000), or if I should try to transfer the debt into my friend's name? Do you think that is at all possible? I'm not sure the credit card company would allow that since his credit is pretty bad.
Thanks for your help!
2007-02-01 04:04:59 · 4 answers · asked by diane w 1 in Business & Finance ➔ Credit
Unfortunalty transfering this into your friends name is out of the question. You ultimatelyhave to pay the bill yourself. Then you would have to take your friend to court to to recoup your money. The fact that there is a verbal agreement between you two would more than likely guarentee you a win, however, small claims court, depending on what state your in, is only going to give a maximumm judgment of between 5000 and 6000 dollars. to go to the next step of the court system to retrieve the full amount is in my mind out of the question in that the attorny fee's would cancell out the amount your going for..good luck
2007-02-01 04:14:14 · answer #1 · answered by bob k 1 · 0⤊ 0⤋
Well, I hope you learned your lesson about putting your name on other peoples' debts. Basically his debt is really YOUR debt, and it's ruining your credit. So you should probably assume he will never repay you and do what's best to preserve/repair your credit. Pay off the balance if you can, with savings or by transferring it to another credit card, if you can get one with a low interest rate. Either way, you must pay this off as quickly as possible to avoid paying loads of interest on the debt.
I don't know what you mean by "settlement fee." If the card company will accept 80% of the balance and clear the debt--take it. Pay it off, transfer the balance, whatever. But if they are charging you fees for that privelege, then it sounds like you are getting ripped off. Usually card companies will make a deal with you if you can't pay, and they don't charge for that as far as I know. Whatever you do, do NOT go to one of those pay-day loan places though. It's a trap and you will get in much worse trouble than you are in now.
If you really trust this person and you think he will repay you, you could just make the minimum payments on this card for him while he gets his finances in order. I would advise against that, though, because the debt will just grow and he may never pay you back. Good luck!
2007-02-01 04:19:05 · answer #2 · answered by lizzgeorge 4 · 0⤊ 0⤋
I think you should ask your friend to go to credit couselling and try to consocidate all the bills into one, including yours, that way its off your chest and if that doesn't work I am afraid that you are responsible for the card and have to pay. You don't have to tell your friend that you paid if off. You would also be saving all the interest on the card if you paid it off and that would save your friend money too. Credit couseling is one best way to go to see if they can consoidate the whole thing. Once you or if you decide to pay off the card. Call the credit card company and cancel the account and remove your name from it altogether. If your friend wants a credit card tell him to get his own. Then keep all the paperwork so if you have to take him to court you have all the paperwork to back yourself up. I would suggest that you do not do this again. I will screw up your credit and you do not need that so you will have to decide what to do on the above and hope your friend pays you back the money. Take care Heather
2007-02-01 04:14:51 · answer #3 · answered by Anonymous · 0⤊ 0⤋
it might ask the card company..
2007-02-04 02:23:32 · answer #4 · answered by jerry 7 · 0⤊ 0⤋