My Daughter Was an Authorized User and Ran Up My Debt. I Have Cash to Settle. – Sharon

“Dear Steve,

23K on credit card debt. I am retired and do not make enough to pay these credit card bills any longer.

I let my daughter be an authorized user on 2 credit cards. She and her husband both lost their jobs and just recently broke up. I have been able to make the minimum payments for over 6 months, but have just about ran out of savings which I have used for this.

My income is $1397 per month on Social Security Diasbility). The credit card payments are $375 per month. I can make ends meet with this but it is soooo difficult. I don’t want to go bankrupt because I do have joint ownership on some property with my husband.

We live separately (for over 6 years). My name is on both of our homes, along with his. We don’t divorce because of the children. I am 62years old. If I continue to pay the minimum payments on the Credit cards that my daughter ran up (I never used them) it will take 44 years to pay them off. I have another daughter who can lend me $10,000 If I can settle with the credit card companies.


Dear Sharon,

Sadly, the debt your daughter ran up is your debt and your responsibility. As an authorized user she has no responsibility for the debt, except to you.

I’m glad you contacted me before you were stone cold broke. As you can see the approach of draining the savings to make the payment is not a great approach. Typically the only thing that happens here is you wind up broke but still with the remaining debt.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Your situation is a great example of a time when settling the debt is a reasonable and logical approach. You have cash on hand to settle the debt and you have assets that would be in jeopardy if you filed bankruptcy.

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Settling the debt has consequences and potential tax implications for you. You should discuss this with the settlement advisor you decide to work with. If you wanted to try to settle this debt and pay the least amount for professional advice to do this I’d suggest you contact Consumer Recovery Network or ZipDebt.

I know you tried to do a nice thing by allowing your daughter to use your card but please don’t do that again. She can easily get her own secured card even if she has bad credit and she should probably do so any to build her credit.

This is not the end of this issue for you either. This unfortunate episode will leave a deep scar on your credit and we are going to need to get your credit back on track again.

It’s obvious that you are a generous and caring person but at 62 you can no longer afford to make financial mistakes that will rob you of your future. It’s time for your daughters to lookout for you.

Please post your responses and follow-up messages to me on this in the comments section below.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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