How can I help my friend with his financial problems?

Question

Okay here is his problem. When he was in high school (18 years old), his father got a credit card in his name. My friend, having trust in his father, signed for the card because his dad had bad credit and could not get a card in his name. Well fast-forward to now, his dad max the card out and because the card was in my friends name, my friend owes collection $11,000 in past due payments and interest. Because my friend lives three states away from his father, he had no idea this was going on (the card and its information is in his fathers hand). Now my friend really needs to get a loan for school and a car to go to work. The problem is, every loan he tries to get, it denies him because his credit is basically screwed due to his father. At this point what can I advice him to do?

Answer 1

Unfortunately, there is not much he can do because he took the risk of getting the card, and thus he was accepting responsibility for his dad.

The first thing he should do is freeze the card, obviously. He can call the credit card company and with his social security number and other personal information he used to fill out the application, he should be able to freeze it without needing the actual account number.

Next, he needs to work out a payment plan with a credit card intermediary (or by himself). Often the credit card companies will reduce the rate (sometimes to 0) and will work out a payment plan with your friend. They'd rather get some of their money back than nothing.

Then he needs to have a serious talk with his father to find a way to get him to help make the payments. This might be the hardest part.

Again, unfortunately, this will be a painful lesson on taking financial responsibility for someone else. It will take a while to repair his credit rating, but fortunately he is young and has some time. There was a REASON his father had bad credit. That should have been the biggest red flag there.

Answer 2

I read these answers and ask myself "Did you guys even read the question carefully? Just browsed over it?"

Lets look at these responses:

"Cancel the card". Um..guys, he clearly stated it was in collections. The card has already been frozen and closed.

Fraud charges? For what? he said he agreed to sign for the card. You can't press fraud charges.

Your friend has two choices. He can cover his dad's debts and pay the bill. If he negotiates he can get the balanced reduced, get a payment plan, and have them remove this from his credit report. The problem is he needs to fix his credit NOW because he needs a school loan and car. This isn't going to happen until the debt is paid, and I'm guessing a couple years?

Throughout your story you never mention what your friends father is doing? Why does the son have to shoulder the burden of this? I would be filing a lawsuit against the father to get the money and pay off the debt. Sounds evil? Again....where is the father in this? Who is getting screwed here?

File a lawsuit.

Answer 3

Step 1: Don't close the account!!!! Change the address on the card and send them a good faith payment (about $600).

Step 2: Report the card as stolen! Have the CC company send a new card with a new #. Have the new card sent to your friends address.

Step 3: Start paying it off. After 6-12 months of on time payments, the credit score will definitely improve. It sucks to have to pay off someone else's debt, but he knowingly signed up for it, and failed to keep track of what his dad was doing with it. As an added bonus, the length of the account being open will boost his score.

Step 4: Go to a credit union and open a savings account. Put about $500 in it. Then have him get a secured personal loan in his name for about $300. Pay off at $100 a month for 3 months. Make sure the Credit union reports to the credit bureau's.

Oh! and have him sign up at experian.com to get his credit scores. he can keep track of how it's going. this is only a rough estimate, but it will tell him if his dad actually messed up anything else, or used his name for other loans etc. This is only about $8 a month to keep track.

Answer 4

First cancel the card and ask the credit agencies to put a fraud alert on his account. They will have to call him before any new credit is issued. That will hopefully keep his dad from opening any more accounts. Next he will probably have to pay off the credit card. Call the company and try to make arrangements for payments. Push his Dad to pay on the credit card. Maybe he will feel a little guilty and at least pay some. Apply for govt loans. They wont usually turn you down because you have one bad mark on your credit.

Answer 5

Never do that again? Thats about it.

What kind of credit card was this? Its very strange that first time and only credit card had a limit high enough to warrant those kinds of collection costs. I could understand 3-4K, but not 11K.

And one deliquent cc wont screw your chances at federal loans for school. I know this from experience.

Answer 6

First, cancel the card, before his Dad can charge any more on it! Second, pay the $11,000. Third, wait 7 years for this credit report to recover.

Answer 7

First he needs to get the card and info away from his father. If his father refuses, then he needs to get the law involved. Then he needs to go to some type of debt solutions agency and see if he can try to work out payments and get his interest lowered. Unfortunately there are not many options other than that when the situation is not a result of fraud.

Answer 8

Has he checked his credit report to see if there are any other credit cards?

His only option is to negotiate a settlement with the collection agency. He can then sue his father to recover.

Answer 9

He can turn his father in which I'm sure he doesn't want to
do but 11,000.00 !!! As far as the Collection Agency
did they PURCHASE the debt or were they ASSIGNED


read thru creditinfocenter com carefully wording is everything
and check for the Statute of Limitations on the credit card
because you don't want to ask the collection to validate
the debt - You want validate that YOU OWE THEM and
not the original creditor. If they PURCHASED it then you
did NOT sign a contract with them that says you agreed to
pay them. So read very carefully thru that website.

Answer 10

He can't get a loan unless someone with good credit cosigns for him. If he is that much in debt he shouldn't be going to school anyway. He should get a fulltime job, get out of debt, and then if he is successful go to school afterwards.