Timeline for Should I take out a loan to pay off a relative's credit card debt?
Current License: CC BY-SA 4.0
8 events
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| Jun 23, 2018 at 6:09 | comment | added | Harper - Reinstate Monica | @RDFozz they may have changed the rules on me, but last I looked the ruling factor was actually insolvency. You can escape that phantom income if you were insolvent at the time you defaulted. That is how bankrupts get away with it; IRS treats court approval of a chapter 7 or 13 as prima facie evidence of insolvency. All others have to prove it. OP qualifies, they just need to make sure to keep records of it. | |
| Jun 22, 2018 at 22:03 | comment | added | RDFozz | Note on settling the debt for a fraction. I did this once. It's important to know that whatever debt she doesn't pay will be considered as income to her by the IRS. Basically, it's as if the banks paid you the money to pay them back in full. This shouldn't stop you from considering that optons, but you need to take it into account in figuring out just how much this will cost. | |
| Jun 19, 2018 at 18:58 | comment | added | Harper - Reinstate Monica | @quid given the A or B choice you offer in your first comment, I wholeheartedly agree. I also wholeheartedly agree with your A or C choice in your second comment. | |
| Jun 19, 2018 at 18:57 | comment | added | quid | There are personal asset exemptions to cover things like that. I think we disagree that bankruptcy necessarily hurts her. I'd argue that a 70 year old eating ramen and geting back to work to pay a credit card bill would hurt more. But potato potatoe. | |
| Jun 19, 2018 at 18:52 | comment | added | Harper - Reinstate Monica |
@quid this is a no-asset situation I do not see where OP stated that, nor would I believe it if he had, having dealt with seniors and their unmentioned and forgotten assets. Assets I would not want surfacing in the mandatory asset search of a bankruptcy, e.g. antiques or heirlooms of personal value. You argue our advice should serve OP even if it hurts her, that is incompatible with my advice to OP to become her trustee, since trustees have a fiduciary duty not to do harm. Of course I set boundaries and separation!
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| Jun 19, 2018 at 18:29 | comment | added | quid |
A trustee (sound familiar?) gets appointed to liquidate those assets this is a no asset situation. This debt isn't owned by the person asking the question, it's owned by an elderly woman with no assets on fixed income that does little more than service this bucket of debt. The person asking the question would be profoundly better off if a bankruptcy was filed on this woman (if the debt is insurmountable) because there are no assets to contest, then cosigning whatever rent she needs rather than cutting a check to clear this debt for her. This is a woman who doesn't have the luxury of time.
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| Jun 19, 2018 at 17:59 | history | edited | Harper - Reinstate Monica | CC BY-SA 4.0 |
added 279 characters in body
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| Jun 19, 2018 at 17:49 | history | answered | Harper - Reinstate Monica | CC BY-SA 4.0 |