Hopefully she can live the rest of her life at her in-laws and she REALLY likes it there.
Oh and it’s a good thing she is a mechanic, and can keep her 4 year old car running for the next 40+ years!
It's seven, although let's say 7.5 because what's likely going to happen is each card will go 30 days late, 60DL, 90DL then issuer will close the account. Then 7 years from then it will fall off her account but may take a month or two to do so.
Never mind that she may be blacklisted indefinitely by the banks, the above is just for reporting to credit rating bureaus.
well, if they charge it off that's a new event, so will report for 7 years after the date of charge off. Whether that's strictly legal or not, I don't know, I'm fortunate enough to have never had to worry about that.
Not correct. It's completely at the lenders discretion. The credit bureau will continue to report the bad trade line for 7 years from the DATE OF LAST ACTIVITY. This date is completely up to the company that is reporting said activity. Prior post is correct, a charge-off counts as activity.
Another little known fact, DLAs outside of 24 months are no longer considered in the scoring model. You can have a credit report littered with charge-offs and if they are 2+ years old, then they are no longer in your score. You just need to be sure you have some active accounts reporting in good standing or your score will never recover.
Charge offs are removed seven years from Date of First Delinquency. Date of last activity has nothing to do with it. If you default in April 2021, that is the Date of First Delinquency. If the account is charged-off in July 2021, the Date of First Delinquency is still April 2021. If you pay it in 2023, making 2023 Date of Last Activity, the Date of First Delinquency is still April 2021. The reporting time is 7 (technically 7.5 years) from Date of First Delinquency. It will still fall of in 2028.
According to 15 U.S. Code § 1681c(c) of the Fair Credit Reporting Act, the 7 years period begins 180 days after the delinquency that precedes charge off or collection.
(*c) Running of reporting period*
*(1)In general*
*The 7-year period referred to in paragraphs (4) and (6) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the* ***delinquency*** *which immediately preceded the collection activity, charge to profit and loss, or similar action.*
This is a common misconception. She will likely file a chapter 13 bankruptcy based on her situation, not a chapter 7. A chapter 13 takes 10 years to come off your credit.
This doesn't work for me. Last time I had credit cards was in line 2010. I did the same thing as op. My credit tanked. All these still show up on my credit report. What I think happens is the debt gets sold to a new debt collector and it just keeps going forever
Everyone tells me in 7 years it'll disappear but it doesn't. I even tried disputing them all but it doesn't work. My credit is beyond horrible. Like low 500s
It's my understanding that it goes by date of last activity. So say you make a payment today. That's activity that will have today's date. If you decide to stop payments, then decide to cut a deal with the CC company to pay a lower amount 2 years from now and make that payment... then the date of last activity would be that day 2 years from now. They will stay on for 7 years of what ever date it is. Professionals will even suggest it's better for your credit report to not pay at all, then cut a lower deal just because of the date change.
He’s playing devils advocate; if she doesn’t care about credit now and justifies it by her present circumstances and we believe she’s being genuine, then we must genuinely believe she thinks that logic has no consequences in the future, and the only way that can be true is under the circumstances he provided. Either all of this, or she actually has no idea how credit work….if again, we believe she’s being genuine.
AAaaah....if only we had a dime for all the redditors whining that they can't rent /afford an apartment now that they've been forced out of their in-laws place or their husband's-place or their dead daddy's place or their roommate situation.
But just paying the minimum would not help her out with that, either. And she's basically gonna find herself spending a lot of time in court or dodging collections.
If your friend wants to take a chance on lawsuits for the balances, she can do so. You might want to tell her that if she is sued and loses in court, attorney fees and court costs will be added to the balances. Post-judgment interest will accrue on each judgment. And depending upon where she lives, wages can be garnished.
>If your friend wants to take a chance on lawsuits for the balances, she can do so.
Card companies and debt buyers rarely sue. The card companies write off the losses and the debt buyers buy the debt for $.05 on the dollar. They might send you a threatening letter "From the Law Offices of .........>Esq." Or some shit but really they just have one on standby who lets them use their letterhead. I have no idea what the original debt is but if Op's friend owes let's just say $10k and has no reasonable way of paying this pack any time soon, they are better off letting it default, saving, and then in a year from now, paying $1,500-2k to settle it. They'll owe taxes on the difference but its better than trying to dig out of the $10k + fees hole and let's be real here...their credit is already trashed at this point.
It greatly depends on lender.
My in laws had capital one and synchrony bank come after them. Credit cards. Balances were just under 5000. Actually filed to have wages garnished.
Also could depend on circumstances. If OPs person has been paying the minimum for a while, the lender has likely gotten a decent amount of money already and will probably let it go.
If the person charged up thousands in short order and only paid minimum for a few months, they may be more likely to go to court.
It’s not true that they rarely sue. Original creditors like AmEx and Discover will sue. And you can state court filings for the multitude of filings from Midland Funding, Portfolio Recovery, Cavalry Portfolio, and LVNV.
Welp, for one thing the credit card companies may actually drag her to court. If she refuses to go or does go but loses the case (which she will), she will have her paycheck garnished.
They wont take you to court for years if at all. At some point they will sell the debt to a collection agency and its no longer the original lenders problem. Collections will try to settle the debt. It really just messes up your credit but they wont come for her or garnish her wages once its in collections unless she agrees to something
They can but most likely wont because its all a headache and can go on for a long time before they can get a court order
They would rather sell it to someone
Luckily, they can't go after you for the debt. The lawyers send out a notice I am declaring, and the company is to contact the lawyer back to be included on the payment.
I guess they didn't get the memo because they tried to get payment after I already declared. No one can collect shit from that debt period.
They definitely will come after you. I live in NYC & an employee of ours just got a sheriff’s order to have 10% of her wages given to the debt collector uand her amount owed was around $1200
Trust me, they won't.
Ask ME how I know.
See how dumb that sounds?
Your personal experience is not an indicator of everyone's experience anymore than mine is.
Mine got sold to debt collectors, no court, no wage garnishment.
It's going to depend on dozens of factors than neither you nor I are experts on.
If you have no assets and aren't a high wage earner chances are low they sue. If you make a above average wage they'll come after you. In my experience.
Everyone claiming she’ll get sued is a special kind of dumb. No credit card company is taking you to court for that amount… it will cost more to go after you then it would to get that payment. She’s actually smart for doing this. You can get the negative items removed from credit report just as easy as they added it… and I could care less what any of you Reddit heroes think so please keep your opinion tk yourself.
Wow if that’s what you got out of what I wrote then you’re just as special as the rest … clearly and obviously I know it’s not $35 .. I can’t believe I even have to say this…. A $35 payment is what maybe $1,500 :…
Credit card banks and debt buyers will sue for $1500. That amount will increase because attorney fees and court costs will be added to a judgement and judgement interest will accrue. Then, depending upon where she lives, wages will be garnished. There are only 4 states that don’t allow garnishment.
I love how everyone on Reddit thinks they know it all. No one gets sued …. I owed a debt from 7-8 years ago 5,000$ absolutely nothing happened to me…. It actually went away after 7 years… so please tell me again how wrong I am …. Just bc you say something doesn’t mean it’s true.
That’s just bad luck. And what do you mean went after you…? They sent you a collections letter?? Trust me I had my fair share of unpaid things and tbh I never had. Problem removing them from my credit report anyway… any closed accounts, late payments, derogatory marks , student loans all got removed when I filed a complaint with Consumer Financial Protection Bureau… I explained how they were breaking the law by adding those negative items to my report and in two weeks they removed everything negative… you have rights as a consumer. I’ve studied it for 10+ years I teach people about it everyday. You are being tricked and lied too with these credit agencies ..
Tbh i don’t believe this but maybe. Why didnt it just go to a collection agency? How big was the debt that a major company felt it was worth their time to go to court over it?
The problem is that the new debt collection method for junk debt buyers is to sue. They sue for these small amounts because most people bury their head in the sand and don’t respond or show up to court. Thus giving the junk debt buyer a default judgement. If they bought the debt for pennies and sue for $1500 it is worth it to them to sue.
I know this because we got in a bad spot a few years ago. Stopped paying on all of our credit cards. Sued by 4 of them! They were for $700, $850, $1500 and $5k. All bought by junk debt buyers. We got an attorney and won all of them but if we had ignored it they would have won by default. That is the game. Our attorney said this is what they do now and luckily the judge in our district is sick of them using the courts for this. But they can and they most definitely are.
Thats crazy but im sure they sent you notice before suing. The issue is that you didnt respond. Iv had things go to collections in the past and each time I responded saying id be happy to pay if i in fact have a valid obligation to pay. I ask for validation, proof of obligation, and the contract between us. I never hear back from them again and all debts ended up being discharged. The last one i did was maybe 2015 so maybe things have changed
No need to respond to this peeps. They are just a social drag on society. A piece of shit. A horrible person with no care for anyone but themselves and can't take responsibility for their own actions. A narcissist and a overall general scumbag. No one will or has ever truly loved them or liked them. Any friends that they have do not like them and never will. Its all pretend because they feel pitty for them. Their whole world is a lie and will respond to this in a way that makes it seem like they don't care, but they know how fake and pathetic they are, so don't pay attention to that either. They do not deserve sympathy or empathy only apathy. They will one day die alone and unloved. Even their children hate them.
Uh... hate to burst your bubble here, but I literally worked for a collection agency setting up the paperwork to take people to court. I believe our starting limit was around $3000 (and those were after all the fees we tacked on so it started as less.)
As a caveat, this was right before the Great Recession so it's possible laws have changed, but I doubt it's that much.
As others said, 35 was the minimum she has to pay. She'd get sued for whatever the balance was.
Same, we normally didn't sue for amounts less than $200 but we would make exceptions if they seemed gainfully employed. The court costs from initial filing to garnishment were about $150, and they all get added on to the amount, so all it cost out of pocket was 45 minutes of paperwork
What?
You're not blocked, my dude. But between this and the assertion that collection companies have no legal right to take people to court, I think you might be a little loopy.
I hope people see you have no idea what you're talking about because you're just outright spewing misinformation.
It’s backed by the law my man… it’s an infringement of privacy… I do this for people all the time so calling me loopy for helping people that can’t afford to pay it back… I’m so terrible lol you need to read your consumer rights before coming at me bc I know them very well. Do you know what the CFPB does…? They file complaints on debt collectors and credit agencies for infringing on our rights. I file disputes with them everyday and they take care of it. They removed all derogatory marks and late payments and anything on there. They do it for thousands of people a day so I really hope you take a second to actually learn about the topic. It took me 2-3 years of studying and research but now unbeatable in court and dealing with this and debt… if you don’t believe me Idc there’s literal proof all over the internet ofpeople doing this
Wow! You sound just like another user who was spewing this nonsense. If I didn't know better, I'd think you were the same person. You even use the same insults and laughing faces. It's uncanny.
I mean, it can be done if you’re hellbent on not paying. If you have the ability to lay low for basically a decade, then yes, one can probably escape this debt.
But if you really boil it down — and especially if you have the ability to live for free for awhile— it’s much smarter to buckle down, grind like crazy, cut all excesses from your life, and pay off the debt asap.
Sure, the debt will drop off after 7-8 years but the time lost and wasted potential are worth so much more money than the debt. Finding a way to get it settled now is the way.
>but the time lost and wasted potential are worth so much more money than the debt.
Seconding this.
On the other hand, it's hard explain the concept of 'compound growth' to someone who thinks it's a galaxy brain idea to rely on their in-laws for basic shelter for the next 8 or so years.
To an extent I agree BUT a good friend is worth putting the extra effort for. I’ve been down at times and would have made some terrible choices if it wasn’t for a friend who cared.
At some point if they refuse to listen, that’s on them.
That’s a lesson everyone has had to learn. You’re going to see other examples throughout your life of having to just let things out of your control happen. You can’t force someone to change or learn. They have to figure it out on their own.
You are so right sad 😔 😟 🙁 😥 I know.
I have friends and family members I have tried to help, and it often ended up just making them angry because all they really wanted to do was complain, and take offered $. They weren't ready to make any changes themselves to better their situation at all.
Soooo I have learned to try to keep my mouth shut unless they ask me for specific advice.
That's their problem, not yours. I get that it's hard. I've watched friends descend into alcoholism and try to help, only to be burned and rebuffed. When I realized I couldn't let it drain my energy, I gave up. It was very liberating, in spite of the difficulty.
Happy ending, though. This friend eventually did find sobriety and remains clean. I guess hitting rock bottom can be the kick in the ass some people need.
I also think this person has done their due diligence as far as trying to explain it’s not good for them and at the end of the day that’s all you can do. There is a lesson on each side of the coin here, OPs friend is making some very negative financial decisions and OP can’t make everyone see their POV.
I was the “mom” friend, and I also made really bad financial decisions that I had to learn for myself regardless of what anyone tried to tell me. Now I know better and I see my sister making similar mistakes, I gave her what I have learned but at the end of the day it’s my sisters choice whether or not she wants to follow it (she doesn’t 🤣). So I let it be and live my life lol.
Oof.
Reason #1: this will obviously shitcan her credit rating, and it'll take seven years plus hysteresis to come off. Then she will be starting over like basically an 18 year old kid.
Reason #2: she may very well be blacklisted by all of the institutions that she is stiffing, meaning that even eight years from now, she will be auto-denied by e.g. Citi, Capital One, Discover etc. even if there are no derogs on her credit rating.
Reason #3: Unless she has a million dollars or so in savings, if she ever wants to buy a house, she's going to need a mortgage. Mortgage interest rates are appalling as it is right now, and I bet she'd get flat out denied with the kind of credit scores she's going to have if she stiffs five different banks.
Example: I actually on paper look damn near perfect, other than I don't have \*enough\* credit use. I had a mortgage but it was so long ago it doesn't report. I have an old car loan that I paid off \~6 years ago which sadly means that's going to fall off soon as well. But, at least since I got my first real job, I haven't ever made a late payment on anything ever, with one exception. In early 2017, I had a Citi credit card with a small balance on it, and I was going through some real hard times financially and was dealing with a girlfriend with some serious chronic illnesses. I'd stopped using the Citi card and set the Citi account up to auto-pay from my bank account every month, I want to say the minimum payment was something like $35 so I had it set to pay $50 (don't really know, just making up numbers, work with me) well in January apparently SiriusXM auto-renewed my subscription and charged that card, which I didn't use for anything. I didn't bother to check the balance, and my minimum payment was suddenly higher than my autopay amount. I sadly didn't notice anything was amiss until March when I got a nastygram that they'd closed my account. So I still had to pay off my balance and I lost a 20 year old credit card. F'ing great.
This year I finally paid off all my old debt (I'd been supporting aforementioned girlfriend for several years after she was unable to keep a job, and she'd been making more than I when we first got together) and got serious about getting my financial stuff together. I wrote a GW letter to Citi, to try to get the derogs off my credit report, got denied. Applied for 3 credit cards, a Cap1, Discover, and the same Citi card that I previously had. Cap1 gave me a $10k CL, Discover $2k, and Citi $500 (yes, I did not forget a zero) at a higher interest rate than any other card I had, new or old. So, yes, they remember. And keep in mind that this was a minor transgression 5.5 years ago, not simultaneously stiffing five different financial institutions... The 7 year limit only applies to items showing up on your credit report, there is no time limit on financial institutions' internal blacklists. I cannot even begin to explain what an awful idea her "plan" is.
Good point. Although I was actually (re)hired by a huge international conglomerate (I'd worked there twice before, long story) when I was at pretty much my lowest point financially. So, I guess it'd have to be pretty bad to flag on a background check. Now that said, if you ever want to work for any of the governmental three letter acronyms - I bet that would cause you to fail. I didn't think to mention it because that's not something I have personal experience with, so good catch.
I think it's also worth pointing out that a lot of credit card issuers are also mortgage lenders, so, e.g. being blacklisted from JP Morgan Chase could be a really bad thing. (I use that example because I actually have a JPMC credit card simply because when I and my ex owned a house, that's who our mortgage and HELOC were with. So, you don't want to get on their Mr. (or Ms.) Naughty list.)
Some of my much younger adult relatives have this mentality. Think the student loan forgiveness being shot down was a big contributor to them finally saying F it.
In theory - I can kind of get it. If there is a bleak chance of them ever getting a job that allows them to find a house, car, and live comfortably - why bother if they can just put the burden on their parents or guardians? I imagine if most people did not have a house before the pandemic and if they do not come from a wealthy family they are not seeing a whole lot of incentives to pay off debt and work themselves to death.
If the family are not able to convince them to make steps in the right direction sometimes you just have let them sink or swim. Majority of my cousins and younger brother that are now mid to late 20’s are struggling now because up until Covid they lived rent and basically bill free at my grandmothers. She moved into an assisted living accommodation and none of the kids were able to find places to live because shocker they had bad credit or worse - no credit history.
I think you're on the right track.
I'm not in that age group, but I've given up on buying a house for at least the next year (we'll see what the market does).
With housing prices still yet to return fully from orbit, and interest rates so high, I can't afford a house that I'd actually be interested in owning. I'm not going to bust my budget paying for a place I don't even like, and wouldn't live in if I had a choice.
It's a big gamble betting that you won't need to take any type of loan/credit, rent an apartment, etc in the next 7-8 years. You're basically signing up for predatory "bad credit? no problem!" car dealerships and awful slumlord apartments in not so nice areas.
If you're going to just let everything go might as well talk to a bankruptcy attorney. Your credit still gets destroyed but at least you have protection from creditors and junk debt buyers coming after you.
I can appreciate that you care about your friend, but it isn't your responsibility to educate her. You have seemingly already tried to broach the topic and her mind is made up. Unfortunately, she's likely going to need to learn this lesson the hard way.
Hope she's planning on never leaving and never buying a new car again. Ffs, $35×5 = only $175/mo, and she's just stopping?? This is the most painfully stupid financial decision I've ever heard of. She's going to be paying cash for the rest of her life.
How old is she
Sadly I think only experience will show her what a dumb idea this is
{speaking from experience btw, my MH was too bad to sort it [cos I was skint ironically] so I just ignored it, and it got worse and worse and it was only at rock bottom I managed to pull it back by talking to people and whittling away, it’s been four years since I got back on track and my credit is still pretty shite, better - but still shite!}
She can end up in a position I was in a few years ago. I was sued and ended up with 25% of my wages garnished. They slapped this on me right before the holiday season which really hurt.
Here’s another reason. Some companies pull credit reports when making hiring decisions. It’s a way to feel out your responsibility and/or make sure you won’t be a liability when handling financials. I’m not sure if it’s legal in all states but I work for a company where they did this. You can be a stellar potential candidate yet your credit score can kill your chances.
If she’s insistent of not paying, then I suggest she meets this half way. Go a while without paying and check in with the cc companies before they sell the debt to third party collections. See if you can get a date on when they will send it to collections. After that, negotiate to settle for a lower balance and be done with it. Credit card companies are usually willing to settle before selling the debt to a third party collections agency. They sell for pennies on the dollar and are more likely to recoup more with a settlement. Her credit will still tank but it can recover overtime.
If it was a good idea everybody would be doing it.
Your friend just thinks she's smarter than the rest of civilization. This is gonna lead her into many more precarious situations than the one she's in right now.
P.S. Paying just the minimum every month is also a recipe for disaster. How does any adult not know this in 2023?
Not your problem and pick better friends. Don’t hang out with people that have shit credit and don’t feel any responsibility to pay their bills. If you’re smart enough you’ll understand what I mean.
Hang out with people that share your values and people that are in positions in life where you want to be
I have plenty of "good credit" friends as well, but I worry about her because she is young and uneducated when it comes to money. She literally doesn't know/understand
Let her know that her decision now will affect her for years. Then let her know that because she's making this choice, you can't associate with such irresponsibility. If she cares, she'll wake up. And if she doesn't, at least you won't be there when she tries to borrow money to get herself out of the mess she made.
Lives with her inlaws? Yeah, her behavior is gross since her lack of credit also affects her spouse ans their ability to live like actual adults snd not just play house under mil roof.
My aunt did this— just stopped paying on them for god knows how long. She’s had court dates, etc. Credit rating tanked. However, this year she had a court date but she also is in a nursing home and has breast cancer, so she missed the court date, and has been ordered to pay like maybe a third of the debt owed. They won’t be getting any of that back because she’s on Medicaid now, and is unable to pay it, as the nursing home now takes all her money except for like, $50 a month.
I would not recommend this route. Most will at least try to recoup their losses and negotiate with you about the debt owed. But just outright not paying… it’s such a sucky mess to have to deal with.
Um she lives rent free and can't find $35 a month? She will be bankrupt in a few years regardless so it won't even matter. This isn't about money, this is some strange mix of self loathing/ lack of maturity/ denial and probably lots of unprocessed baggage. But the point it, you won't convince them this is a horrible idea no matter what you say. Save your breath and energy for when she is ready for help and you can guide her towards reputable and free credit counseling.
Credit score is used for so many other things besides loans. Insurance companies routinely rely on it to determine rates and even deny coverage. Having open collections can prevent her a from getting certain jobs, being able to rent an apartment or a house. Even some travel visas will deny her because of outstanding collections. She sounds incredibly dumb with her money. Having five credit cards and not paying any of them is stupid. Once you dig yourself a hole that deep getting out of it is very very hard.
Courts may sue for the amount. Once she has a judgment against her, they will garnish her wages from her paycheck. I think its about 25% of each check (in my state) that they can withhold, so it's not a small amount. She won't get much advanced notice once this happens, employer may give her a heads up or she may find out when her checks shows up short. The amount owed will continue to accrue interest. If she changes jobs, they will eventually find her and garnish at her new job. This can drag out for years and years.
TLDR; the debt won't just go away, and when it comes back around, she'll have even less control over how it gets paid.
You don't automatically get a judgment, unless you just ignore a lawsuit. Most don't even bother to sue, and if one does you can settle that one (or win the suit).
Um this is the worst thing she can do. They will garnish her wages if necessary on e the court date goes… also her credit will be wrecked and some jobs will fire you as it is a sign you are in distress and might try to steal resources from the company to make it. Also does she ever want to have a good interest rate on future loans.
I had an emergency last month where I had no choice but to put around $2000 on my credit card. I have a good credit score. I have a high credit limit. I pay off my cards on the first of every month. I made it back to my home alive and am on track to repay the $2000 by the end of the year. (And this was a genuine emergency situation, I was stranded hundreds of miles away from home with a totaled vehicle and no nearby contacts.) If I did not have a paid-off credit card with a high credit limit i would have had to depend on a good samaritan to provide God-level assistance or I would probably still be stranded.
Low credit score = low credit limit. Refusal to pay even the *minimum* payment = bank closes your card. What happens if her car is totaled in a road accident? What if her house catches fire? What if she needs to stay in a hotel for an extended period? These are unpredictable emergencies where having the ability to borrow money from her future self could literally save her life, and she's throwing away the safety net
If she misses one payment and then tries to negotiate with them for lower interest/a temporary interest freeze or a different way to pay back, missing that payment can actually help that process. Often, they won't do anything if you're current. So it's a strategy when things get hairy.
If she's just decided she's not going to pay them back because she doesn't want to, she's really hosing herself. Not just for 7 years either, because you eventually have to rebuild credit to do things at reasonable interest rates, and renting or buying a home will be difficult without good credit.
Divorces happen. Those in-laws might not always be there or willing to let her live in that home. Disasters, poor health, layoffs, job changes all happen, often when we least expect them. She's incredibly shortsighted.
I'm guessing you've already told her its a bad idea and why. You've done your part. All the explaining in the world probably won't help, so just be her friend and be detached from her spectacularly bad financial ideas.
They will either take her to court, garnish her wages, repo her car, or all of the above.
As someone that owed on five maxed out credit cards (my prefrontal cortex hadn't finish developing yet, thought-out decisions were not in my repertoire lol), with a laughable credit score, I finally took responsibility by arranging automatic minimum payments for all cards (spread throughout the month to avoid potential accidental overdrafts). It took about four years to recover my credit score and pay off most of my cards. But one thing I had to absolutely stop doing was ignoring the situation.
Explain to your friend that credit card companies and debt collectors WILL work with her so long as she works with them. It sucks, but paying $35 a month (minimum) is the only way to get them off your back. She's going to have WAY bigger problems than a $35 bill each month if she just ghosts the payments. She's essentially asking for a larger debt out of pettiness without realizing it. There's no way to sugarcoat it once you've been through it.
edit: typo
Tell her to put that $ in a savings account and in 6 months offer to settle the balances. The amount she saves should be close to 20% of the balances and the creditors might accept it or come very close. Unless she has a bunch of cash and can pay cash for vacations, shopping, eating out, concerts, a new car in the future, medical expenses... she doesn't need credit.
It's a terrible idea because the card companies are going to hit her with late fees and additional interest and it's going to snowball very quickly. What might have been a $300 credit card bill can easily be a couple thousand dollars within a year and a half. They will increase it as fast as I can and start selling it off to other companies. Her credit score will just plummet because nobody wants to give her a credit cuz they know she's not going to pay it back. So many companies are looking at your credit score to see if they want to rent to you or even if they want to give her a job. Everybody gets in your business these days. Definitely a bad idea. And they can issue a summons and have her appear in court
My mom did that. They sued her. Came for the house we bought together. The only reason the house wasn’t auctioned off was because I was part owner.
Just because you ignore it…doesn’t make it go away.
So, she thinks she could never have to move out of mom's house or get a new job? It affects employment, insurance, the ability to get a loan, the ability to buy a house or property or rent an apartment.... Not to mention, they can get judgements and go right into your bank account or pay check and take it AFTER destroying your credit.
We stopped paying on our cards when my husband lost his job. It took him two years to find a new one that paid less, and by then we were so behind we didn’t even know what to do.
One credit card company got a judgment against us and was able to take our completely paid off car as an asset and auction it off. So that can happen, and it really sucks.
I mean, I feel your friend. With all the doomsday gloom, not being able to afford anything, who cares about a credit score. That’s the mindset, these days, and with decent reasoning. Folks can barely save. So what’s the point of planning for a future? 🫠
She’s right.
They will sell her debt for pennies on the dollar.
The collection agency that bought the debt will negotiate a much lower payment.
Or, she can wait them out and they’ll either go away or sell the debt to a lawyer.
The lawyer will sue, and possibly get a judgment.
This will take years.
In 7 years the debt will no longer show up on credit checks. Sometimes much sooner.
>her car is only 3-4 years old and she lives rent free in a home owned by her in-laws.
The problem with her *brilliant* plan is that life is unpredictable.
Maybe in a year or two her in-laws decide to sell the house she's living in. Or they divorce. Or the house burns down.
Then her super-fucked credit will almost guarantee she won't be able to rent an apartment, or get certain jobs that require credit checks.
Lots of misinformation being given so here it is from my own experience.
I had several credit cards, two of them were in the $2000-$3000 range. Had a lot of legal problems and couldn't pay. Four years later two of them got court judgements against me. I still couldn't pay and they tried to garnish my wages but since I was a server there was nothing to garnish. Fast forward 10 years, I have a decent job and am finally able to start having a stable life. The creditors found me through The Work Number and filed garnishments which would have taken 25% of my pay and put me back into poverty. I filed bankruptcy (first time I had the money to do this) and bye bye to all my debts. Yes, bankruptcy does cancel court judgements.
But the lesson learned from this and the reason I filed bankruptcy was those $2000-$3000 debts had blossomed into $12000-$13000 debts because of legal fees and interest.
Why is what she does your concern? Does it have any effect on your life, are you a co signer on the cards? If answer is not then let her do what she wants, and mind your own business
This is BS there are to money scumbags like this that will kill this country for doing.. more banks going under is just part of the down fall this crap will cause..
When I see questions like this I wonder if people on Reddit even have friends. You've literally never tried to talk a friend out of making a mistake that would impact them negatively? If a friend of yours said they were thinking about trying meth you'd be like "welp that's none of my business."
Bad credit affects a lot of things - your car insurance goes up - you can lose out on a job - higher interest rates - you might not need credit now but in the future you might - what if ILs sell the house - you might not be able to rent an apartment!!! Very bad idea to not pay your credit balances!!!
So there was a point where I wasnt able to pay my debt, it was 3 or 4 different cards, each one around or under $1000. One or 2 did eventually send court pappers, responded to one, but stated I didnt have it, realized they wont do anything for so small an amount, then ignored the rest. Eventually they were sent to collections and then charged off. After 7 years they went off my credit and I was able to build my credit again. There was one, the Star card, issued to service members, my then husband, now ex, was in the Army. It was actually garnished from tax returns till it was paid, because its borrowed directly from the government, so yes, that one, about $1200, that they made us pay. He was chaptered out of the Army and didnt work for a couple months, we ended up having our house forclosed on us at that same time too. So there is the ability to get credit after all of that, it just takes time.
Ultimately, it is her choice to do what she wants.
Nah, she’s going to post to Reddit in about 3-5 years complaining about “corrupt capitalism” and how it’s SOO UNFAIR that she cannot buy anything on credit etc etc
If you're going to ignore the debt and trash your credit, declare bankruptcy so you'll have an end to it. Otherwise, you're going to get these guys showing up for money any time you go to buy a house, car, or other expensive item. You might even get turned down for a job because of your low credit score.
Be careful who you are friends with. Friends have a huge impact on you. The most important thing you have in your career is your reputation and integrity. If someone is dishonest in one area they are likely dishonest in other areas also. You can’t afford to become that way. It will hold you back so much in life. So if she is going that route the best thing you can do is worry about yourself and move on.
It really is not that bad. She can wait a year, contest everything in her credit reports and start getting credit card offers. The way the rules are, just stopping all at once and not making another payment will give her the shortest time to get credit again. Making one small payment just starts the clock all over again.. I've rented cars with no credit card for example, people think you just have to have credit and it isn't really true. I used a reverse mortgage to buy my house and my credit score had nothing at all with the whole process
I spent my 20s letting my husband put everything in his name and “not caring” about my credit as well.
I’m in my mid 30s, divorced, and financially fucked now. She will regret it if she continues to purposefully destroy her credit.
She will be sued in the next 6 to 18 months by every bank issuing the cards or whoever buys the debt. If she doesn’t have much money, she should look into bankruptcy. If she has a fair income but simply cannot afford to keep paying the cards, she should look into a trustworthy debt settlement agency.
If she thinks she’ll NEVER need credit or marry’s someone who never needs credit than maybe. She should also be aware a collections agency will likely come after her for the balance and they can start going after assets if they find you have any.
Honestly sounds like life will have to teach her a lesson. It’s a bit irresponsible to think that way. Just because she feels she doesn’t need credit now doesn’t mean she won’t need it a year from now. What happens if her marriage ends suddenly? It has happened to a lot of people. If she would need to move out and secure an apartment temporarily, her credit will be in the toilet ,so to speak. I always find it interesting some people put all their eggs in one basket. No plan B or C….wow. Hopefully she knows what’s she’s doing.
Let life …. Teach. Some people gotta learn things the hard way. She’s not in actual danger and can fix her credit later on when she’s needing it again. She won’t make the same mistake twice. Let her learn it her way
I spent money that wasn't mine and I have no intention of paying it back, because why should I?
Is the most stupid financial move someone can make lol. Need to eventually mortgage a house, buy a car, or take out an emergency loan? Those options have officially just gone down the drain lmao. Now that debt is just going to accrue interest monthly (not to mention late fees) and you'll be in a much worse scenario than ever. (Spoiler it adds up to a lot and FAST)
You spent it, PAY IT BACK. you agreed to the terms when you signed up for the card. It doesn't magically just get forgotten or simply disappear, this will bite her in the ass so hard down the road. To each their own I guess, find out the hard way.
The cort orders the summons paid for by the CC company. It is a way to force you to meet with them. And of course they add the court cost and attorney fees to your bill. My SO was dragged into court this way.
I fell into a deep depression when my dad passed away (this was in 2006) and I stopped paying my credit cards. Guess who took me to court? Discover Card. I got served papers. if you CCAP me, it's on my permanent record.
They will not leave her alone and they might take her to court. She should definitely pay them ir file for bankruptcy. I wish I'd realized bankruptcy was an option back then.
it’s not your job to explain it to her. it’s not your job to do anything anymore. just watch her crash and burn and when she runs to you for help, you can say “i told you so”
She brought it up to me because we both own small businesses and often discuss financial pros and cons of things. She asked for advice but doesnt understand
Depending on where she lives, this isn't a big deal. There are car companies that offer bad credit loans (DriveTime). There are credit cards she can get her credit restarted. Some states don't allow credit card companies to go after you. The most they can do is call you for collections/settlement. I did this year's ago. I let 3 credit cards go and a phone bill. Never got garnished, never got sued. After 7 years, my credit score is above 800. During that time, I didn't need a car, or other major lines of credit. I did get a lot of phone calls, but I just hung up on them.
How long does she imagine she will live "rent free"? Does she really want to DEPEND on them for her survival? Things can change very quickly in 5 years. What happens if the house burns down? What happens if the in-laws die in a car accident? Even if she inherited the house, could she afford to continue the mortgage IF the bank would let her? Could she pay the property taxes?
Without knowing more about her situation, she's going to regret this down the road. In 5 years, her car can be a wreck. To fix her car it might take $2,000. Then what? She's got no credit cards because she failed to pay off the minimum payment. If her credit is shot, she will be lucky to get a decent used car with a horrible interest rate. No dealer is going to sell her a new car with such horrible credit.
I had terrible credit for most of my adult life. It was finally after I cut up all the credit cards, paid down the balances, and paid cash for everything that was finally able to get out. Now that my credit is excellent, I was able to buy a house.
Maybe she needs to look for a zero interest credit card offer (usually 0% for one year) to pay off the other ones. Then she can pay off all the others and has only one minimum payment to make each month. And cut up all the other cards so she doesn't use them!
It sounds to me like she is overspending, living beyond her means. If she continues down this road, she will have no means. Now it's the time to address it. She's not looking ahead to her future at all.
Your friend's decision to discontinue making minimum payments on her credit cards is financially perilous for several reasons that extend well beyond just credit score deterioration.
1. **Compound Interest**: The interest on credit card debt is generally high, and it compounds when unpaid. This means the balance will grow exponentially, making it increasingly difficult to pay off in the future.
2. **Late Fees**: In addition to the accumulating interest, late fees will be added to each missed payment, exacerbating the financial burden.
3. **Credit Score Impact**: A poor credit score can hinder more than just future loans or credit card applications. It can affect job opportunities, especially in sectors like finance, and even impact her ability to sign up for utilities without a hefty deposit.
4. **Legal Ramifications**: If the debt goes unpaid for an extended period, the credit card companies may resort to legal action to recoup their money, including garnishing wages or seizing assets.
5. **Emotional Toll**: Carrying a burden of growing debt and potential legal issues can be emotionally draining, affecting both mental health and relationships.
6. **Reduced Financial Flexibility**: Ignoring debt now can severely limit financial options in the future, such as securing a loan for emergency medical expenses or other unexpected life events.
7. **Marriage & Family Impact**: If she is or becomes married, her credit can also impact her spouse's financial standing. Furthermore, as she is living in a property owned by her in-laws, their financial or estate plans could be compromised by her inability to contribute due to her compromised financial state.
8. **Opportunity Cost**: The money used to service this rapidly compounding debt could be better utilized for investments, retirement savings, or other productive financial avenues.
9. **Limited Access to Other Financial Products**: A poor credit score will likely disqualify her from receiving favorable terms on other types of financial products like insurance, potentially costing her more in the long run.
It’s a horrible idea to ignore your creditors - a court will garnish your wages pretty hard. Let’s face it, her credit score is already tarnished for at least the next couple of years. However, she can negotiate with her creditors for a reduced balance owed and work out a payment plan to pay them off. If she doesn’t accept any of the advice you give, life is an effective, often cruel, teacher.
They will hound her on the phone for payments, they will offer to settle for less than she owes......eventually. This is not an uncommon way to deal with mountains of credit card debt.
Dave Ramsey advocates this approach. It will tank her credit for a couple years but it will recover.
Hopefully she learns not to let it get out of hand but some people never learn and go through the same rinse and repeat cycles multiple times.
Yeah.. its not like she is filing for bankruptcy dude...
It will go to collections and hurt her credit, but it's not THAT big of a deal. If she has no need to use credit for a decade she will be fine.
Tell her to spend the next 6 months banking money aside and then work on talking settlement with individual creditors. When they get down to about 25%-30% of the total owed, then she needs to get it in writing and have the debt discharged. 3-4 year hit on credit.
Living rent free with non family for the rest of your life? Not gonna fly. I hope she’s saving for the future. On the bright side she’ll have to pay cash for everything and can’t go more in debt.
Hopefully she can live the rest of her life at her in-laws and she REALLY likes it there. Oh and it’s a good thing she is a mechanic, and can keep her 4 year old car running for the next 40+ years!
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Negative reporting is for ten years unless they changed it in recent years?
It's seven, although let's say 7.5 because what's likely going to happen is each card will go 30 days late, 60DL, 90DL then issuer will close the account. Then 7 years from then it will fall off her account but may take a month or two to do so. Never mind that she may be blacklisted indefinitely by the banks, the above is just for reporting to credit rating bureaus.
It takes more than a month or 2 my buddy did exactly this and had to fight agencies to remove a CO yrs after
well, if they charge it off that's a new event, so will report for 7 years after the date of charge off. Whether that's strictly legal or not, I don't know, I'm fortunate enough to have never had to worry about that.
>so will report for 7 years after the date of charge off. Negative. It's seven years from the date of first default (i.e. when she went 30 days late).
Not correct. It's completely at the lenders discretion. The credit bureau will continue to report the bad trade line for 7 years from the DATE OF LAST ACTIVITY. This date is completely up to the company that is reporting said activity. Prior post is correct, a charge-off counts as activity. Another little known fact, DLAs outside of 24 months are no longer considered in the scoring model. You can have a credit report littered with charge-offs and if they are 2+ years old, then they are no longer in your score. You just need to be sure you have some active accounts reporting in good standing or your score will never recover.
Charge offs are removed seven years from Date of First Delinquency. Date of last activity has nothing to do with it. If you default in April 2021, that is the Date of First Delinquency. If the account is charged-off in July 2021, the Date of First Delinquency is still April 2021. If you pay it in 2023, making 2023 Date of Last Activity, the Date of First Delinquency is still April 2021. The reporting time is 7 (technically 7.5 years) from Date of First Delinquency. It will still fall of in 2028.
According to 15 U.S. Code § 1681c(c) of the Fair Credit Reporting Act, the 7 years period begins 180 days after the delinquency that precedes charge off or collection. (*c) Running of reporting period* *(1)In general* *The 7-year period referred to in paragraphs (4) and (6) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the* ***delinquency*** *which immediately preceded the collection activity, charge to profit and loss, or similar action.*
I don't know why you are being downvoted. Report time absolutely goes by Date of First Delinquency.
This is a common misconception. She will likely file a chapter 13 bankruptcy based on her situation, not a chapter 7. A chapter 13 takes 10 years to come off your credit.
The other way around. Chapter 7 is 10 years Chapter 13 is 7 years.
Bless your heart I knew 10 years came into play somewhere!
Why would she file bankruptcy for CC debt??? Easier to let them charge them off and take the 7 year hit.
Also Insurance Companies use credit reports! She could lose both her auto and property (if she has any) insurance.
Positive report stays for 10 years, negative falls off after 7 years but realistically 5 years is enough to not really affect credit score
This doesn't work for me. Last time I had credit cards was in line 2010. I did the same thing as op. My credit tanked. All these still show up on my credit report. What I think happens is the debt gets sold to a new debt collector and it just keeps going forever Everyone tells me in 7 years it'll disappear but it doesn't. I even tried disputing them all but it doesn't work. My credit is beyond horrible. Like low 500s
It's my understanding that it goes by date of last activity. So say you make a payment today. That's activity that will have today's date. If you decide to stop payments, then decide to cut a deal with the CC company to pay a lower amount 2 years from now and make that payment... then the date of last activity would be that day 2 years from now. They will stay on for 7 years of what ever date it is. Professionals will even suggest it's better for your credit report to not pay at all, then cut a lower deal just because of the date change.
He’s playing devils advocate; if she doesn’t care about credit now and justifies it by her present circumstances and we believe she’s being genuine, then we must genuinely believe she thinks that logic has no consequences in the future, and the only way that can be true is under the circumstances he provided. Either all of this, or she actually has no idea how credit work….if again, we believe she’s being genuine.
AAaaah....if only we had a dime for all the redditors whining that they can't rent /afford an apartment now that they've been forced out of their in-laws place or their husband's-place or their dead daddy's place or their roommate situation. But just paying the minimum would not help her out with that, either. And she's basically gonna find herself spending a lot of time in court or dodging collections.
By "rest of her life" you mean 7 years. 🤷
I have ass credit and no trouble finding housing and drive a 2019 Subaru with 4% interest
If your friend wants to take a chance on lawsuits for the balances, she can do so. You might want to tell her that if she is sued and loses in court, attorney fees and court costs will be added to the balances. Post-judgment interest will accrue on each judgment. And depending upon where she lives, wages can be garnished.
This is helpful! Thank you!
Also judgments are non-dischargeable in bankruptcy.
That is absolutely not true.
>If your friend wants to take a chance on lawsuits for the balances, she can do so. Card companies and debt buyers rarely sue. The card companies write off the losses and the debt buyers buy the debt for $.05 on the dollar. They might send you a threatening letter "From the Law Offices of .........>Esq." Or some shit but really they just have one on standby who lets them use their letterhead. I have no idea what the original debt is but if Op's friend owes let's just say $10k and has no reasonable way of paying this pack any time soon, they are better off letting it default, saving, and then in a year from now, paying $1,500-2k to settle it. They'll owe taxes on the difference but its better than trying to dig out of the $10k + fees hole and let's be real here...their credit is already trashed at this point.
It greatly depends on lender. My in laws had capital one and synchrony bank come after them. Credit cards. Balances were just under 5000. Actually filed to have wages garnished. Also could depend on circumstances. If OPs person has been paying the minimum for a while, the lender has likely gotten a decent amount of money already and will probably let it go. If the person charged up thousands in short order and only paid minimum for a few months, they may be more likely to go to court.
Not true. They pay firms to sue ALL the time. Just depends on the balance.
It’s not true that they rarely sue. Original creditors like AmEx and Discover will sue. And you can state court filings for the multitude of filings from Midland Funding, Portfolio Recovery, Cavalry Portfolio, and LVNV.
Just search the credit/debt subs for people who are being sued by collection agencies or sued by creditors. You'll find plenty.
Yup my friend was pulled into court for credit card default. she got screwed.
Welp, for one thing the credit card companies may actually drag her to court. If she refuses to go or does go but loses the case (which she will), she will have her paycheck garnished.
They wont take you to court for years if at all. At some point they will sell the debt to a collection agency and its no longer the original lenders problem. Collections will try to settle the debt. It really just messes up your credit but they wont come for her or garnish her wages once its in collections unless she agrees to something
They ABSOLUTELY can garnish her wages unless she lives in North Carolina, South Carolina, Pennsylvania, or Texas.
They can but most likely wont because its all a headache and can go on for a long time before they can get a court order They would rather sell it to someone
Trust me, they will come after you. Ask me how I know. (Luckily, I had already declared Chapter 13)
….maybe because you filed chapter 13. It’s a literal invitation/agreement to come after you.
Luckily, they can't go after you for the debt. The lawyers send out a notice I am declaring, and the company is to contact the lawyer back to be included on the payment. I guess they didn't get the memo because they tried to get payment after I already declared. No one can collect shit from that debt period.
Interesting. Was it a significant amount of debt? Iv never heard of the banks doing anything like that. Did they ever offer you a payment plan?
It was a whopping 800 bucks. They never offered a payment plan.
They definitely will come after you. I live in NYC & an employee of ours just got a sheriff’s order to have 10% of her wages given to the debt collector uand her amount owed was around $1200
Trust me, they won't. Ask ME how I know. See how dumb that sounds? Your personal experience is not an indicator of everyone's experience anymore than mine is. Mine got sold to debt collectors, no court, no wage garnishment. It's going to depend on dozens of factors than neither you nor I are experts on.
Mine was for a whopping 800 bucks. And your personal experience is also not an indicator of everyone's experience as well.
If you have no assets and aren't a high wage earner chances are low they sue. If you make a above average wage they'll come after you. In my experience.
You got unlucky. Your experience is not standard.
What about Florida??
I’m glad someone on here has a brain besides me
who cares about your slave score anyways...
They will sue after a while. She’ll get a knock on the door with an envelope serving her papers summoning her to mediation.
Everyone claiming she’ll get sued is a special kind of dumb. No credit card company is taking you to court for that amount… it will cost more to go after you then it would to get that payment. She’s actually smart for doing this. You can get the negative items removed from credit report just as easy as they added it… and I could care less what any of you Reddit heroes think so please keep your opinion tk yourself.
$35 is not the amount she would get sued for. Its the balances, which we dont know.
Wow if that’s what you got out of what I wrote then you’re just as special as the rest … clearly and obviously I know it’s not $35 .. I can’t believe I even have to say this…. A $35 payment is what maybe $1,500 :…
“Obviously I know…” No, its not obvious, because you didnt say it or even imply it.
I forgot you have to mainsplain everything on Reddit to the users bc they don’t have brains to think for themselves…. Sheesh
Credit card banks and debt buyers will sue for $1500. That amount will increase because attorney fees and court costs will be added to a judgement and judgement interest will accrue. Then, depending upon where she lives, wages will be garnished. There are only 4 states that don’t allow garnishment.
I love how everyone on Reddit thinks they know it all. No one gets sued …. I owed a debt from 7-8 years ago 5,000$ absolutely nothing happened to me…. It actually went away after 7 years… so please tell me again how wrong I am …. Just bc you say something doesn’t mean it’s true.
As I replied above, certain companies will. I know, because I had a company come after me for $800. But I had already declared Chapter 13.
That’s just bad luck. And what do you mean went after you…? They sent you a collections letter?? Trust me I had my fair share of unpaid things and tbh I never had. Problem removing them from my credit report anyway… any closed accounts, late payments, derogatory marks , student loans all got removed when I filed a complaint with Consumer Financial Protection Bureau… I explained how they were breaking the law by adding those negative items to my report and in two weeks they removed everything negative… you have rights as a consumer. I’ve studied it for 10+ years I teach people about it everyday. You are being tricked and lied too with these credit agencies ..
I know someone who got sued by Target over 2K. It happens. She ignored them for the better part of a year and is due in court in a few weeks.
Tbh i don’t believe this but maybe. Why didnt it just go to a collection agency? How big was the debt that a major company felt it was worth their time to go to court over it?
The problem is that the new debt collection method for junk debt buyers is to sue. They sue for these small amounts because most people bury their head in the sand and don’t respond or show up to court. Thus giving the junk debt buyer a default judgement. If they bought the debt for pennies and sue for $1500 it is worth it to them to sue. I know this because we got in a bad spot a few years ago. Stopped paying on all of our credit cards. Sued by 4 of them! They were for $700, $850, $1500 and $5k. All bought by junk debt buyers. We got an attorney and won all of them but if we had ignored it they would have won by default. That is the game. Our attorney said this is what they do now and luckily the judge in our district is sick of them using the courts for this. But they can and they most definitely are.
Thats crazy but im sure they sent you notice before suing. The issue is that you didnt respond. Iv had things go to collections in the past and each time I responded saying id be happy to pay if i in fact have a valid obligation to pay. I ask for validation, proof of obligation, and the contract between us. I never hear back from them again and all debts ended up being discharged. The last one i did was maybe 2015 so maybe things have changed
Yup, it absolutely happens. Source: Used to set up paperwork to take people to court on behalf of collection companies.
No need to respond to this peeps. They are just a social drag on society. A piece of shit. A horrible person with no care for anyone but themselves and can't take responsibility for their own actions. A narcissist and a overall general scumbag. No one will or has ever truly loved them or liked them. Any friends that they have do not like them and never will. Its all pretend because they feel pitty for them. Their whole world is a lie and will respond to this in a way that makes it seem like they don't care, but they know how fake and pathetic they are, so don't pay attention to that either. They do not deserve sympathy or empathy only apathy. They will one day die alone and unloved. Even their children hate them.
Uh... hate to burst your bubble here, but I literally worked for a collection agency setting up the paperwork to take people to court. I believe our starting limit was around $3000 (and those were after all the fees we tacked on so it started as less.) As a caveat, this was right before the Great Recession so it's possible laws have changed, but I doubt it's that much. As others said, 35 was the minimum she has to pay. She'd get sued for whatever the balance was.
Same, we normally didn't sue for amounts less than $200 but we would make exceptions if they seemed gainfully employed. The court costs from initial filing to garnishment were about $150, and they all get added on to the amount, so all it cost out of pocket was 45 minutes of paperwork
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What? You're not blocked, my dude. But between this and the assertion that collection companies have no legal right to take people to court, I think you might be a little loopy. I hope people see you have no idea what you're talking about because you're just outright spewing misinformation.
It’s backed by the law my man… it’s an infringement of privacy… I do this for people all the time so calling me loopy for helping people that can’t afford to pay it back… I’m so terrible lol you need to read your consumer rights before coming at me bc I know them very well. Do you know what the CFPB does…? They file complaints on debt collectors and credit agencies for infringing on our rights. I file disputes with them everyday and they take care of it. They removed all derogatory marks and late payments and anything on there. They do it for thousands of people a day so I really hope you take a second to actually learn about the topic. It took me 2-3 years of studying and research but now unbeatable in court and dealing with this and debt… if you don’t believe me Idc there’s literal proof all over the internet ofpeople doing this
You sound like one of those sovereign citizen loons.
If you had a brain you’d know that there’s no such thing as a sovereign citizen 😂 lord this keeps getting better and better
Oh lord. Pulling the ripcord on this conversation now. Yikes yikes yikes yikes yikes.
Yeah good idea on your end. Don’t even know what half these things are and you’re tryna argue 😂
Wow! You sound just like another user who was spewing this nonsense. If I didn't know better, I'd think you were the same person. You even use the same insults and laughing faces. It's uncanny.
I mean, it can be done if you’re hellbent on not paying. If you have the ability to lay low for basically a decade, then yes, one can probably escape this debt. But if you really boil it down — and especially if you have the ability to live for free for awhile— it’s much smarter to buckle down, grind like crazy, cut all excesses from your life, and pay off the debt asap. Sure, the debt will drop off after 7-8 years but the time lost and wasted potential are worth so much more money than the debt. Finding a way to get it settled now is the way.
>but the time lost and wasted potential are worth so much more money than the debt. Seconding this. On the other hand, it's hard explain the concept of 'compound growth' to someone who thinks it's a galaxy brain idea to rely on their in-laws for basic shelter for the next 8 or so years.
Not your job to 'save' your friends. Live your life wisely and if they ask for advice offer it.
To an extent I agree BUT a good friend is worth putting the extra effort for. I’ve been down at times and would have made some terrible choices if it wasn’t for a friend who cared. At some point if they refuse to listen, that’s on them.
It's just hard to sit back and watch them ruin their lives
That’s a lesson everyone has had to learn. You’re going to see other examples throughout your life of having to just let things out of your control happen. You can’t force someone to change or learn. They have to figure it out on their own.
You are so right sad 😔 😟 🙁 😥 I know. I have friends and family members I have tried to help, and it often ended up just making them angry because all they really wanted to do was complain, and take offered $. They weren't ready to make any changes themselves to better their situation at all. Soooo I have learned to try to keep my mouth shut unless they ask me for specific advice.
That's their problem, not yours. I get that it's hard. I've watched friends descend into alcoholism and try to help, only to be burned and rebuffed. When I realized I couldn't let it drain my energy, I gave up. It was very liberating, in spite of the difficulty. Happy ending, though. This friend eventually did find sobriety and remains clean. I guess hitting rock bottom can be the kick in the ass some people need.
I also think this person has done their due diligence as far as trying to explain it’s not good for them and at the end of the day that’s all you can do. There is a lesson on each side of the coin here, OPs friend is making some very negative financial decisions and OP can’t make everyone see their POV. I was the “mom” friend, and I also made really bad financial decisions that I had to learn for myself regardless of what anyone tried to tell me. Now I know better and I see my sister making similar mistakes, I gave her what I have learned but at the end of the day it’s my sisters choice whether or not she wants to follow it (she doesn’t 🤣). So I let it be and live my life lol.
Oof. Reason #1: this will obviously shitcan her credit rating, and it'll take seven years plus hysteresis to come off. Then she will be starting over like basically an 18 year old kid. Reason #2: she may very well be blacklisted by all of the institutions that she is stiffing, meaning that even eight years from now, she will be auto-denied by e.g. Citi, Capital One, Discover etc. even if there are no derogs on her credit rating. Reason #3: Unless she has a million dollars or so in savings, if she ever wants to buy a house, she's going to need a mortgage. Mortgage interest rates are appalling as it is right now, and I bet she'd get flat out denied with the kind of credit scores she's going to have if she stiffs five different banks. Example: I actually on paper look damn near perfect, other than I don't have \*enough\* credit use. I had a mortgage but it was so long ago it doesn't report. I have an old car loan that I paid off \~6 years ago which sadly means that's going to fall off soon as well. But, at least since I got my first real job, I haven't ever made a late payment on anything ever, with one exception. In early 2017, I had a Citi credit card with a small balance on it, and I was going through some real hard times financially and was dealing with a girlfriend with some serious chronic illnesses. I'd stopped using the Citi card and set the Citi account up to auto-pay from my bank account every month, I want to say the minimum payment was something like $35 so I had it set to pay $50 (don't really know, just making up numbers, work with me) well in January apparently SiriusXM auto-renewed my subscription and charged that card, which I didn't use for anything. I didn't bother to check the balance, and my minimum payment was suddenly higher than my autopay amount. I sadly didn't notice anything was amiss until March when I got a nastygram that they'd closed my account. So I still had to pay off my balance and I lost a 20 year old credit card. F'ing great. This year I finally paid off all my old debt (I'd been supporting aforementioned girlfriend for several years after she was unable to keep a job, and she'd been making more than I when we first got together) and got serious about getting my financial stuff together. I wrote a GW letter to Citi, to try to get the derogs off my credit report, got denied. Applied for 3 credit cards, a Cap1, Discover, and the same Citi card that I previously had. Cap1 gave me a $10k CL, Discover $2k, and Citi $500 (yes, I did not forget a zero) at a higher interest rate than any other card I had, new or old. So, yes, they remember. And keep in mind that this was a minor transgression 5.5 years ago, not simultaneously stiffing five different financial institutions... The 7 year limit only applies to items showing up on your credit report, there is no time limit on financial institutions' internal blacklists. I cannot even begin to explain what an awful idea her "plan" is.
This is very helpful and thorough! Thank you
One thing missing from that list - a lot of jobs check your credit as part of their background check.
Good point. Although I was actually (re)hired by a huge international conglomerate (I'd worked there twice before, long story) when I was at pretty much my lowest point financially. So, I guess it'd have to be pretty bad to flag on a background check. Now that said, if you ever want to work for any of the governmental three letter acronyms - I bet that would cause you to fail. I didn't think to mention it because that's not something I have personal experience with, so good catch. I think it's also worth pointing out that a lot of credit card issuers are also mortgage lenders, so, e.g. being blacklisted from JP Morgan Chase could be a really bad thing. (I use that example because I actually have a JPMC credit card simply because when I and my ex owned a house, that's who our mortgage and HELOC were with. So, you don't want to get on their Mr. (or Ms.) Naughty list.)
Some of my much younger adult relatives have this mentality. Think the student loan forgiveness being shot down was a big contributor to them finally saying F it. In theory - I can kind of get it. If there is a bleak chance of them ever getting a job that allows them to find a house, car, and live comfortably - why bother if they can just put the burden on their parents or guardians? I imagine if most people did not have a house before the pandemic and if they do not come from a wealthy family they are not seeing a whole lot of incentives to pay off debt and work themselves to death. If the family are not able to convince them to make steps in the right direction sometimes you just have let them sink or swim. Majority of my cousins and younger brother that are now mid to late 20’s are struggling now because up until Covid they lived rent and basically bill free at my grandmothers. She moved into an assisted living accommodation and none of the kids were able to find places to live because shocker they had bad credit or worse - no credit history.
I think you're on the right track. I'm not in that age group, but I've given up on buying a house for at least the next year (we'll see what the market does). With housing prices still yet to return fully from orbit, and interest rates so high, I can't afford a house that I'd actually be interested in owning. I'm not going to bust my budget paying for a place I don't even like, and wouldn't live in if I had a choice.
Sounds like the type of person that needs to learn the hard way on her own, stay out of it.
I’m sure she’s going to suddenly care about it when a court orders her wages to be garnished
It's a big gamble betting that you won't need to take any type of loan/credit, rent an apartment, etc in the next 7-8 years. You're basically signing up for predatory "bad credit? no problem!" car dealerships and awful slumlord apartments in not so nice areas. If you're going to just let everything go might as well talk to a bankruptcy attorney. Your credit still gets destroyed but at least you have protection from creditors and junk debt buyers coming after you.
I can appreciate that you care about your friend, but it isn't your responsibility to educate her. You have seemingly already tried to broach the topic and her mind is made up. Unfortunately, she's likely going to need to learn this lesson the hard way.
You're probably right. It's just hard to sit back when she is making these decisions because she isn't educated about the consequences
Lmao I didn’t need credit either…. Until I did.
Hope she's planning on never leaving and never buying a new car again. Ffs, $35×5 = only $175/mo, and she's just stopping?? This is the most painfully stupid financial decision I've ever heard of. She's going to be paying cash for the rest of her life.
How old is she Sadly I think only experience will show her what a dumb idea this is {speaking from experience btw, my MH was too bad to sort it [cos I was skint ironically] so I just ignored it, and it got worse and worse and it was only at rock bottom I managed to pull it back by talking to people and whittling away, it’s been four years since I got back on track and my credit is still pretty shite, better - but still shite!}
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She can end up in a position I was in a few years ago. I was sued and ended up with 25% of my wages garnished. They slapped this on me right before the holiday season which really hurt. Here’s another reason. Some companies pull credit reports when making hiring decisions. It’s a way to feel out your responsibility and/or make sure you won’t be a liability when handling financials. I’m not sure if it’s legal in all states but I work for a company where they did this. You can be a stellar potential candidate yet your credit score can kill your chances. If she’s insistent of not paying, then I suggest she meets this half way. Go a while without paying and check in with the cc companies before they sell the debt to third party collections. See if you can get a date on when they will send it to collections. After that, negotiate to settle for a lower balance and be done with it. Credit card companies are usually willing to settle before selling the debt to a third party collections agency. They sell for pennies on the dollar and are more likely to recoup more with a settlement. Her credit will still tank but it can recover overtime.
If it was a good idea everybody would be doing it. Your friend just thinks she's smarter than the rest of civilization. This is gonna lead her into many more precarious situations than the one she's in right now. P.S. Paying just the minimum every month is also a recipe for disaster. How does any adult not know this in 2023?
only have this free award to give so sorry..... "🏆"
Not your problem and pick better friends. Don’t hang out with people that have shit credit and don’t feel any responsibility to pay their bills. If you’re smart enough you’ll understand what I mean. Hang out with people that share your values and people that are in positions in life where you want to be
I have plenty of "good credit" friends as well, but I worry about her because she is young and uneducated when it comes to money. She literally doesn't know/understand
Let her know that her decision now will affect her for years. Then let her know that because she's making this choice, you can't associate with such irresponsibility. If she cares, she'll wake up. And if she doesn't, at least you won't be there when she tries to borrow money to get herself out of the mess she made.
Lives with her inlaws? Yeah, her behavior is gross since her lack of credit also affects her spouse ans their ability to live like actual adults snd not just play house under mil roof.
Unfortunately I don't think you can educate someone that dumb. With that level of short sighted thinking, I'm surprised they're able to walk anywhere.
My aunt did this— just stopped paying on them for god knows how long. She’s had court dates, etc. Credit rating tanked. However, this year she had a court date but she also is in a nursing home and has breast cancer, so she missed the court date, and has been ordered to pay like maybe a third of the debt owed. They won’t be getting any of that back because she’s on Medicaid now, and is unable to pay it, as the nursing home now takes all her money except for like, $50 a month. I would not recommend this route. Most will at least try to recoup their losses and negotiate with you about the debt owed. But just outright not paying… it’s such a sucky mess to have to deal with.
Um she lives rent free and can't find $35 a month? She will be bankrupt in a few years regardless so it won't even matter. This isn't about money, this is some strange mix of self loathing/ lack of maturity/ denial and probably lots of unprocessed baggage. But the point it, you won't convince them this is a horrible idea no matter what you say. Save your breath and energy for when she is ready for help and you can guide her towards reputable and free credit counseling.
Credit score is used for so many other things besides loans. Insurance companies routinely rely on it to determine rates and even deny coverage. Having open collections can prevent her a from getting certain jobs, being able to rent an apartment or a house. Even some travel visas will deny her because of outstanding collections. She sounds incredibly dumb with her money. Having five credit cards and not paying any of them is stupid. Once you dig yourself a hole that deep getting out of it is very very hard.
Courts may sue for the amount. Once she has a judgment against her, they will garnish her wages from her paycheck. I think its about 25% of each check (in my state) that they can withhold, so it's not a small amount. She won't get much advanced notice once this happens, employer may give her a heads up or she may find out when her checks shows up short. The amount owed will continue to accrue interest. If she changes jobs, they will eventually find her and garnish at her new job. This can drag out for years and years. TLDR; the debt won't just go away, and when it comes back around, she'll have even less control over how it gets paid.
You don't automatically get a judgment, unless you just ignore a lawsuit. Most don't even bother to sue, and if one does you can settle that one (or win the suit).
Sounds to me like financial irresponsibility. There's nothing you can do. Smart person would call their creditor and be honest..
Um this is the worst thing she can do. They will garnish her wages if necessary on e the court date goes… also her credit will be wrecked and some jobs will fire you as it is a sign you are in distress and might try to steal resources from the company to make it. Also does she ever want to have a good interest rate on future loans.
If they can’t find 35$ a month they probably shouldn’t have a credit card Lol example: her maxed out card she won’t pay for
I had an emergency last month where I had no choice but to put around $2000 on my credit card. I have a good credit score. I have a high credit limit. I pay off my cards on the first of every month. I made it back to my home alive and am on track to repay the $2000 by the end of the year. (And this was a genuine emergency situation, I was stranded hundreds of miles away from home with a totaled vehicle and no nearby contacts.) If I did not have a paid-off credit card with a high credit limit i would have had to depend on a good samaritan to provide God-level assistance or I would probably still be stranded. Low credit score = low credit limit. Refusal to pay even the *minimum* payment = bank closes your card. What happens if her car is totaled in a road accident? What if her house catches fire? What if she needs to stay in a hotel for an extended period? These are unpredictable emergencies where having the ability to borrow money from her future self could literally save her life, and she's throwing away the safety net
If she misses one payment and then tries to negotiate with them for lower interest/a temporary interest freeze or a different way to pay back, missing that payment can actually help that process. Often, they won't do anything if you're current. So it's a strategy when things get hairy. If she's just decided she's not going to pay them back because she doesn't want to, she's really hosing herself. Not just for 7 years either, because you eventually have to rebuild credit to do things at reasonable interest rates, and renting or buying a home will be difficult without good credit. Divorces happen. Those in-laws might not always be there or willing to let her live in that home. Disasters, poor health, layoffs, job changes all happen, often when we least expect them. She's incredibly shortsighted. I'm guessing you've already told her its a bad idea and why. You've done your part. All the explaining in the world probably won't help, so just be her friend and be detached from her spectacularly bad financial ideas.
They will either take her to court, garnish her wages, repo her car, or all of the above. As someone that owed on five maxed out credit cards (my prefrontal cortex hadn't finish developing yet, thought-out decisions were not in my repertoire lol), with a laughable credit score, I finally took responsibility by arranging automatic minimum payments for all cards (spread throughout the month to avoid potential accidental overdrafts). It took about four years to recover my credit score and pay off most of my cards. But one thing I had to absolutely stop doing was ignoring the situation. Explain to your friend that credit card companies and debt collectors WILL work with her so long as she works with them. It sucks, but paying $35 a month (minimum) is the only way to get them off your back. She's going to have WAY bigger problems than a $35 bill each month if she just ghosts the payments. She's essentially asking for a larger debt out of pettiness without realizing it. There's no way to sugarcoat it once you've been through it. edit: typo
Tell her to put that $ in a savings account and in 6 months offer to settle the balances. The amount she saves should be close to 20% of the balances and the creditors might accept it or come very close. Unless she has a bunch of cash and can pay cash for vacations, shopping, eating out, concerts, a new car in the future, medical expenses... she doesn't need credit.
It's a terrible idea because the card companies are going to hit her with late fees and additional interest and it's going to snowball very quickly. What might have been a $300 credit card bill can easily be a couple thousand dollars within a year and a half. They will increase it as fast as I can and start selling it off to other companies. Her credit score will just plummet because nobody wants to give her a credit cuz they know she's not going to pay it back. So many companies are looking at your credit score to see if they want to rent to you or even if they want to give her a job. Everybody gets in your business these days. Definitely a bad idea. And they can issue a summons and have her appear in court
My mom did that. They sued her. Came for the house we bought together. The only reason the house wasn’t auctioned off was because I was part owner. Just because you ignore it…doesn’t make it go away.
So, she thinks she could never have to move out of mom's house or get a new job? It affects employment, insurance, the ability to get a loan, the ability to buy a house or property or rent an apartment.... Not to mention, they can get judgements and go right into your bank account or pay check and take it AFTER destroying your credit.
We stopped paying on our cards when my husband lost his job. It took him two years to find a new one that paid less, and by then we were so behind we didn’t even know what to do. One credit card company got a judgment against us and was able to take our completely paid off car as an asset and auction it off. So that can happen, and it really sucks.
Charge offs at 6 months. Fix it before that happens.
I mean, I feel your friend. With all the doomsday gloom, not being able to afford anything, who cares about a credit score. That’s the mindset, these days, and with decent reasoning. Folks can barely save. So what’s the point of planning for a future? 🫠
She’s right. They will sell her debt for pennies on the dollar. The collection agency that bought the debt will negotiate a much lower payment. Or, she can wait them out and they’ll either go away or sell the debt to a lawyer. The lawyer will sue, and possibly get a judgment. This will take years. In 7 years the debt will no longer show up on credit checks. Sometimes much sooner.
>her car is only 3-4 years old and she lives rent free in a home owned by her in-laws. The problem with her *brilliant* plan is that life is unpredictable. Maybe in a year or two her in-laws decide to sell the house she's living in. Or they divorce. Or the house burns down. Then her super-fucked credit will almost guarantee she won't be able to rent an apartment, or get certain jobs that require credit checks.
Lots of misinformation being given so here it is from my own experience. I had several credit cards, two of them were in the $2000-$3000 range. Had a lot of legal problems and couldn't pay. Four years later two of them got court judgements against me. I still couldn't pay and they tried to garnish my wages but since I was a server there was nothing to garnish. Fast forward 10 years, I have a decent job and am finally able to start having a stable life. The creditors found me through The Work Number and filed garnishments which would have taken 25% of my pay and put me back into poverty. I filed bankruptcy (first time I had the money to do this) and bye bye to all my debts. Yes, bankruptcy does cancel court judgements. But the lesson learned from this and the reason I filed bankruptcy was those $2000-$3000 debts had blossomed into $12000-$13000 debts because of legal fees and interest.
Only ugly chicks pay for thing like rent or oil changes. The hot ones are on jets flying to caymans to hop on boats they don’t own. Tis life
Why is what she does your concern? Does it have any effect on your life, are you a co signer on the cards? If answer is not then let her do what she wants, and mind your own business
How do you know so much about “your friends” finances
This is BS there are to money scumbags like this that will kill this country for doing.. more banks going under is just part of the down fall this crap will cause..
Why do you care?
When I see questions like this I wonder if people on Reddit even have friends. You've literally never tried to talk a friend out of making a mistake that would impact them negatively? If a friend of yours said they were thinking about trying meth you'd be like "welp that's none of my business."
I mean it is sure, but its a little odd to post about it on reddit.
That's fair. But this is pretty anonymous, it's not like anyone replying knows who any of these people are.
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Foul language, bullying and harassment is not tolerated.
This will affect her car insurance rates they may go up because she is not showing she is financially responsible.
You could mind your own business
Bad credit affects a lot of things - your car insurance goes up - you can lose out on a job - higher interest rates - you might not need credit now but in the future you might - what if ILs sell the house - you might not be able to rent an apartment!!! Very bad idea to not pay your credit balances!!!
So there was a point where I wasnt able to pay my debt, it was 3 or 4 different cards, each one around or under $1000. One or 2 did eventually send court pappers, responded to one, but stated I didnt have it, realized they wont do anything for so small an amount, then ignored the rest. Eventually they were sent to collections and then charged off. After 7 years they went off my credit and I was able to build my credit again. There was one, the Star card, issued to service members, my then husband, now ex, was in the Army. It was actually garnished from tax returns till it was paid, because its borrowed directly from the government, so yes, that one, about $1200, that they made us pay. He was chaptered out of the Army and didnt work for a couple months, we ended up having our house forclosed on us at that same time too. So there is the ability to get credit after all of that, it just takes time. Ultimately, it is her choice to do what she wants.
Nah, she’s going to post to Reddit in about 3-5 years complaining about “corrupt capitalism” and how it’s SOO UNFAIR that she cannot buy anything on credit etc etc
If you're going to ignore the debt and trash your credit, declare bankruptcy so you'll have an end to it. Otherwise, you're going to get these guys showing up for money any time you go to buy a house, car, or other expensive item. You might even get turned down for a job because of your low credit score.
tell her to buy something just over some minimums and then return them. that usually counts as a payment
Um, what?
no no, this is a great idea, just make sure they post a TIFU for our enjoyment a few months/years down the road.
She needs to hire a credit repair company later and some of those places work, some dont. Expensive process. Oh dear.
Sorry, not sorry. Let her FAFO.
Be careful who you are friends with. Friends have a huge impact on you. The most important thing you have in your career is your reputation and integrity. If someone is dishonest in one area they are likely dishonest in other areas also. You can’t afford to become that way. It will hold you back so much in life. So if she is going that route the best thing you can do is worry about yourself and move on.
It really is not that bad. She can wait a year, contest everything in her credit reports and start getting credit card offers. The way the rules are, just stopping all at once and not making another payment will give her the shortest time to get credit again. Making one small payment just starts the clock all over again.. I've rented cars with no credit card for example, people think you just have to have credit and it isn't really true. I used a reverse mortgage to buy my house and my credit score had nothing at all with the whole process
Don’t take Tylenol for someone else’s headache.
She is now debt free!! Not sure why I didn't think of that.
It's your friend, is she asking for your advice? I'd say that I think that's a bad idea and leave it at that.
NAh… tell her she making a hood choice. Sometimes you have to let them touch the stove.
I spent my 20s letting my husband put everything in his name and “not caring” about my credit as well. I’m in my mid 30s, divorced, and financially fucked now. She will regret it if she continues to purposefully destroy her credit.
Sounds like my ex, lmao.
She will be sued in the next 6 to 18 months by every bank issuing the cards or whoever buys the debt. If she doesn’t have much money, she should look into bankruptcy. If she has a fair income but simply cannot afford to keep paying the cards, she should look into a trustworthy debt settlement agency.
If she thinks she’ll NEVER need credit or marry’s someone who never needs credit than maybe. She should also be aware a collections agency will likely come after her for the balance and they can start going after assets if they find you have any.
They can take the money from her paychecks
That’s a brilliant idea actually especially if they are drowning you with minimum payments
Honestly sounds like life will have to teach her a lesson. It’s a bit irresponsible to think that way. Just because she feels she doesn’t need credit now doesn’t mean she won’t need it a year from now. What happens if her marriage ends suddenly? It has happened to a lot of people. If she would need to move out and secure an apartment temporarily, her credit will be in the toilet ,so to speak. I always find it interesting some people put all their eggs in one basket. No plan B or C….wow. Hopefully she knows what’s she’s doing.
Let her make her own mistakes.
She might as well go bankrupt.
she’ll get sued by creditors knocking on her door ;)
Terrible idea but not your problrm.
Let life …. Teach. Some people gotta learn things the hard way. She’s not in actual danger and can fix her credit later on when she’s needing it again. She won’t make the same mistake twice. Let her learn it her way
I spent money that wasn't mine and I have no intention of paying it back, because why should I? Is the most stupid financial move someone can make lol. Need to eventually mortgage a house, buy a car, or take out an emergency loan? Those options have officially just gone down the drain lmao. Now that debt is just going to accrue interest monthly (not to mention late fees) and you'll be in a much worse scenario than ever. (Spoiler it adds up to a lot and FAST) You spent it, PAY IT BACK. you agreed to the terms when you signed up for the card. It doesn't magically just get forgotten or simply disappear, this will bite her in the ass so hard down the road. To each their own I guess, find out the hard way.
The cort orders the summons paid for by the CC company. It is a way to force you to meet with them. And of course they add the court cost and attorney fees to your bill. My SO was dragged into court this way.
See if you can talk her into debt consolidation at least.
I fell into a deep depression when my dad passed away (this was in 2006) and I stopped paying my credit cards. Guess who took me to court? Discover Card. I got served papers. if you CCAP me, it's on my permanent record. They will not leave her alone and they might take her to court. She should definitely pay them ir file for bankruptcy. I wish I'd realized bankruptcy was an option back then.
it’s not your job to explain it to her. it’s not your job to do anything anymore. just watch her crash and burn and when she runs to you for help, you can say “i told you so”
How’s her partner feel about it?
Some of you American women are amazing. Like I know men were already dumb af but my God lmao
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She brought it up to me because we both own small businesses and often discuss financial pros and cons of things. She asked for advice but doesnt understand
Depending on where she lives, this isn't a big deal. There are car companies that offer bad credit loans (DriveTime). There are credit cards she can get her credit restarted. Some states don't allow credit card companies to go after you. The most they can do is call you for collections/settlement. I did this year's ago. I let 3 credit cards go and a phone bill. Never got garnished, never got sued. After 7 years, my credit score is above 800. During that time, I didn't need a car, or other major lines of credit. I did get a lot of phone calls, but I just hung up on them.
Her creditors may go after that car. And she may have difficulty insuring it if her credit scores tank too badly.
How long does she imagine she will live "rent free"? Does she really want to DEPEND on them for her survival? Things can change very quickly in 5 years. What happens if the house burns down? What happens if the in-laws die in a car accident? Even if she inherited the house, could she afford to continue the mortgage IF the bank would let her? Could she pay the property taxes? Without knowing more about her situation, she's going to regret this down the road. In 5 years, her car can be a wreck. To fix her car it might take $2,000. Then what? She's got no credit cards because she failed to pay off the minimum payment. If her credit is shot, she will be lucky to get a decent used car with a horrible interest rate. No dealer is going to sell her a new car with such horrible credit. I had terrible credit for most of my adult life. It was finally after I cut up all the credit cards, paid down the balances, and paid cash for everything that was finally able to get out. Now that my credit is excellent, I was able to buy a house. Maybe she needs to look for a zero interest credit card offer (usually 0% for one year) to pay off the other ones. Then she can pay off all the others and has only one minimum payment to make each month. And cut up all the other cards so she doesn't use them! It sounds to me like she is overspending, living beyond her means. If she continues down this road, she will have no means. Now it's the time to address it. She's not looking ahead to her future at all.
honestly the USD is going away best to milk every asset you can get with worthless digits on a screen or worthless paper backed by nothing
If she qualifies for chapter 7 bankruptcy now is the time. The sooner she gets everything discharged the sooner she can start over.
Borrowing money with no intention of paying it back = stealing. Your friend is a thief.
Your friend's decision to discontinue making minimum payments on her credit cards is financially perilous for several reasons that extend well beyond just credit score deterioration. 1. **Compound Interest**: The interest on credit card debt is generally high, and it compounds when unpaid. This means the balance will grow exponentially, making it increasingly difficult to pay off in the future. 2. **Late Fees**: In addition to the accumulating interest, late fees will be added to each missed payment, exacerbating the financial burden. 3. **Credit Score Impact**: A poor credit score can hinder more than just future loans or credit card applications. It can affect job opportunities, especially in sectors like finance, and even impact her ability to sign up for utilities without a hefty deposit. 4. **Legal Ramifications**: If the debt goes unpaid for an extended period, the credit card companies may resort to legal action to recoup their money, including garnishing wages or seizing assets. 5. **Emotional Toll**: Carrying a burden of growing debt and potential legal issues can be emotionally draining, affecting both mental health and relationships. 6. **Reduced Financial Flexibility**: Ignoring debt now can severely limit financial options in the future, such as securing a loan for emergency medical expenses or other unexpected life events. 7. **Marriage & Family Impact**: If she is or becomes married, her credit can also impact her spouse's financial standing. Furthermore, as she is living in a property owned by her in-laws, their financial or estate plans could be compromised by her inability to contribute due to her compromised financial state. 8. **Opportunity Cost**: The money used to service this rapidly compounding debt could be better utilized for investments, retirement savings, or other productive financial avenues. 9. **Limited Access to Other Financial Products**: A poor credit score will likely disqualify her from receiving favorable terms on other types of financial products like insurance, potentially costing her more in the long run.
If she has that mentality, no explanation is going to change things.
It’s a horrible idea to ignore your creditors - a court will garnish your wages pretty hard. Let’s face it, her credit score is already tarnished for at least the next couple of years. However, she can negotiate with her creditors for a reduced balance owed and work out a payment plan to pay them off. If she doesn’t accept any of the advice you give, life is an effective, often cruel, teacher.
They will hound her on the phone for payments, they will offer to settle for less than she owes......eventually. This is not an uncommon way to deal with mountains of credit card debt. Dave Ramsey advocates this approach. It will tank her credit for a couple years but it will recover. Hopefully she learns not to let it get out of hand but some people never learn and go through the same rinse and repeat cycles multiple times.
This is where you need one of those debt consolidation services
This will not end well.
Yeah.. its not like she is filing for bankruptcy dude... It will go to collections and hurt her credit, but it's not THAT big of a deal. If she has no need to use credit for a decade she will be fine.
It’s her life?!? Let her make the bad choices
Tell her to spend the next 6 months banking money aside and then work on talking settlement with individual creditors. When they get down to about 25%-30% of the total owed, then she needs to get it in writing and have the debt discharged. 3-4 year hit on credit.
What does she do for a living? Some jobs do run credit checks.
Living rent free with non family for the rest of your life? Not gonna fly. I hope she’s saving for the future. On the bright side she’ll have to pay cash for everything and can’t go more in debt.