Re: spouses debt

Posted by Stephen Fazzini (68.81.58.208) on July 24, 2002 at 08:44:42:

In Reply to: Re: spouses debt posted by CardReport.Com on December 23, 2000 at 18:10:33:

: Most credit card debts are considered unsecured.
: An exception would be with secured credit cards
: involving a security deposit at the issuing bank.

: Also note that, if a debtor has, for example, a
: credit card and a checking account at the same bank,
: even if the checking account was *not* originally
: intended as security for the credit card, account
: agreements often state that the bank may take funds
: from one account to repay a delinquency on another
: account owned by the same customer.

: The other exception is with retail store credit or
: charge cards where the the store retains a security
: interest in the merchandise that the customer buys
: from them with the card. Sears has such a clause,
: and is known to exercise it agressively by demanding
: the return of goods purchased with their store card
: in the event of a default or bankruptcy. In the
: case of expensive items, they might attempt repossession.

: The creditor does *not* need to go to court before
: doing any of the above-described actions.

: If a creditor sues a debtor for non-payment and wins
: (which is usually a very clear issue in court),
: they will obtain a judgement, which is basically
: a document from the court acknowledging that the
: debtor owes the money, and authorizing certain types
: of collection actions if the creditor chooses to
: do so. The creditor can then sieze money from bank
: accounts owned by the debtor, including at other
: banks. Depending on the state, they are often able
: to require the debtor's employer to deduct part of
: his/her paycheck and send it to the creditor (known
: as garnishing the debtor's wages.) In *some* cases,
: the debtor's car may be siezed, if it seems worth
: it to the creditor (considering repo expenses, low
: auction price, and the amount of any liens already
: held by other parties.) Judgement creditors will
: *not* generally try to sieze personal items like
: clothes, etc, which don't have much resale value.

: The other very important concern is that judgements
: appear on the debtor's credit bureau reports, and
: are considered *very* negative items. It will be
: quite difficult to get any new credit with an unpaid
: judgement on your credit report.

: Depeding on the state, and on the vigilance of the
: creditor, judgements can remain valid for a *very*
: long time. (See the chart in our *Credit Laws*
: section.)

: Be sure to check out our *Collection Agency FAQ*,
: which you can find in the *Credit Problems* section
: (link is at left) for some insight on dealing with
: collection efforts by creditors. Keep in mind that
: creditors will tend to examine the debtor's particular
: situation (e.g. assets, income, credit file, etc.),
: to decide whether s/he is a "good target" for a
: lawsuit. A co-operative attitude and reasonable
: communication from the debtor can also help, along
: with the subtle or not-so-subtle implication that
: a lawsuit might force the debtor into a bankruptcy
: in which the creditor might get nothing.

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