What to do my sisters debt is on my credit :( – Rocio

I am a single mother, and so far,, I have a perfect credit.

My big issue is I did some balance transfer for my sister so she can enjoy the 12 months 0 interest,, in two credit cards,, and then we were going to transfer back to her credit cards,, she is a realtor, and when all the market went down,,, so did her income and her credit cards were closed,, so now I have her debt in my credit. The big problem is that she has a one year old and her second baby is almost here,,,,, she does not want to work in anything but real estate so she can stay home with the babies. She is barely paying her bills and her credit is already bad,,, but is now to the point that she cannot make the minimun payments in my credit cards (her debt) so I have been transfering back and fort the minimun payments just to ensure my credit does not go bad.

I cannot afford to make her minimun payments, since her debt is almost 60 thousand.

I am going crazy thinking about how I will ruin my credit for a credit card debt that is not mine, I did not enjoy , or utilze this money and I feel the only way out is bankrupcy. I already have a full time job and I dont’ think is fair that I need to get a second job to pay my sister debt and loose the time with my four year old.

I am also affraid that if I file brankruptcy they force me to sale my house, since I do have like 60thousand in equity. I cannot take an equity loan because my debt ratio is already max out. Is it really brankrupcy my way out? can she file bankruptcy and take her debt from my credit card with her?

Rocio

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  • Debby

    I fee l for you I have alot of the same situation.  I have talked to an attorney for bankruptcy and they say I can’t file Chapter 7 Bankruptcy because I have equity in my home.  I live in VA  If you hear different I hope you will post it.

  • Gsncarpets77

    Is there another family member that could help you out? A Mom or Dad  or Grandparent who you could discuss this with? I don’t know you or want to assume anything about your situation but my experience has been that blood is thicker bills. Grandma or Granpa may want to see you and your sister get this straightened out and if they are part of the older generation (born in 20′s or 30′s) then they almost certainly remember the Great Depression. It doesn’t hurt to ask, the worst they can do is say no or maybe offer some kind of help, good luck to you, we’re all in the same boat more or less. I think about my debt all day long sometimes, I push it out of my head and then it pops back in when somewhen mentions the economy or unemployment etc., In any case good luck and god bless, no matter what happens.

  • Msullivan

    Rocio,

    This is a tough situation but you need to refocus. The debt is not your sister’s, it is yours. You took it on as a favor as as happens so frequently, your sister has decided to leave you high and dry.  Based on the few hundred of these I have seen, you can kiss the money from your sister and your credit rating good bye. 

    Your issue now is how to get rid of the debt. if you can’t pay it off, even with some concessions, you have to consider settlement, default and bankruptcy. All of them trash your credit. Any good credit counselor can explain the options and point out the advantages and disadvantages but you might want to talk to two counselors to make sure you get the whole story. Counselors are trained to hate settlement and default and to dislike bankruptcy.

    And no, you do not have to lose your house if you file for bankruptcy. Any attorney can explain the process. And no, your sister cannot erase your debt by filing for bankruptcy and again, this is YOUR debt.

    I do hope you can heal the relationship with your sister over time.

    Good luck!

    • http://www.consumerrecoverynetwork.com/ Michael

      Thank you MSullivan. You have provided Rocio a very thorough and well thought out reply. You have also given substance to the failings of debt relief service providers when you say: “you have to consider settlement, default and bankruptcy. All of them
      trash your credit. Any good credit counselor can explain the options and
      point out the advantages and disadvantages but you might want to talk
      to two counselors to make sure you get the whole story. Counselors are
      trained to hate settlement and default and to dislike bankruptcy.”

      With likely only few exceptions, credit counselors on the floor manning the phones are not properly trained, motivated, or allowed to deliver the kind of consult that you suggest will be available when calling to speak with one.

      As I break down what I quote above, please know that I am not specifically directing my comments at you. I am speaking generally. My purpose for doing so is to bring awareness and encourage discussion.

      Here we go:

      “All of them trash your credit” – This is a broad statement that capitalizes on a persons preoccupation with credit scores. Its a statement that is used as a misdirection from the real issue. Someone with a credit problem does not need debt intervention solutions. Someone with a debt emergency does. Focusing on a credit report and score is not where someone struggling with debt, nor where a professional offering advice and services, should begin from. Providing information and detail for debt relief options and the affects to credit scores, future access to credit and the costs thereof, are nuanced to each individual.
      Chapter 7 bankruptcy may be the perfect option to get relief from debt AND have access to the credit the consumer projects they may need over a one, two and three year timeline.
      Debt settlement may be the better option of the three because a DMP wont fit and there are logical reasons to avoid bankruptcy.
      Telling and/or implying to consumers who need some type of debt intervention that one option – your option – is the right thing to try to fit into because of impacts to credit reports and scores is self serving, damaging, dishonest and I believe ultimately a liability.

      Credit counselors are not trained to a level necessary to qualify to a consumer in any substantive way your statement of “All of them trash your credit”.

      Next:

      “Any good credit counselor can explain the options” – With oh so limited exceptions – no they can’t. Why can’t they? They don’t know enough to explain anything other than a debt management plan because they are not trained to know. Even if they did know enough, they would not be allowed to explain alternative options in any meaningful way. I have met and spoken with many in the CCA space. I can honestly say that some of them do not understand their own product, let alone alternatives to them. I do believe that is changing, but slowly and for the most part only at an executive level.

      I would like to hear from credit counselors in reply with what they know about debt settlement and how it compares to other intervention options. I would like to hear from counselors about what they know about bankruptcy and its comparisons too. 

      Next:

      “point out the advantages and disadvantages” – Credit counselors, as just mentioned, do not know enough to point out the pros and cons of each option. They have not been trained to point out much, other than generalities – some of which are just wrong. Even the generalities that are on point are not going to be specific enough to the individuals unique set of circumstances that would then provide the consumer what they need to make informed decisions.

      Next:

      “you might want to talk
      to two counselors to make sure you get the whole story” – Why? Counselors work from pretty much the same script. The script and the fill in the blank computer screen shots are really not that different from one shop to the next. The creditor concessions and discretionary limits are the same for each counselor. If you were to have said “you might want to talk to two counselors to make sure you hear the same thing”, I could agree.

      Finally:

      “Counselors are trained to hate settlement and default and to dislike bankruptcy” – There is far too much to this statement to cover in a comment reply. I would like to cover this statement in depth because it is not just an isolated comment you made. The attitude contained in this statement permeates throughout the CCA space. I will cover this in a stand alone article.
      I will briefly point out that calling someone for help, information and advice as a some what uninformed consumer; and relying on what you assumed to be professional feedback; from an untrained and uninformed counselor; when you know that they hate and dislike 2/3rds of the legitimate intervention options available to you – would appear to be ill advised.

      MSullivan – I am aware that credit counseling has its place. That place is just a lot smaller than CCA’s and many others present it to be. I am committed to assisting CCA’s enlarge the roll they play in the debt relief services market, but that wont happen until the current failings and shortcomings see the light of day and honest discussions commence.

      I welcome your response to this comment and also replies from others.

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