Know Your Rights

Disadvantages of Co-Signing on Credit Cards and Loans

An elderly woman co-signed for her adult son on two credit cards and for a truck. Now the mother is stuck with $20,000 debt. What are her options?

A 76 year old woman co-signed on two credit cards and a Toyota truck for her adult son. The son assured his mother that he would pay the bills. Instead, he charged up the credit cards and opened another without her knowledge. Then he declared bankruptcy leaving her the debts. She was stuck with $15,000 from the co-signed credit cards, $11,000 from the Toyota loan and $5000 from the fraudulent credit card. The son had over 130 civil actions against him and his home was recently foreclosed.

The mom's only income is from supplemental social security and unemployment benefits which will run out in 8 months. She walks with a cane and has some health issues. Mom is currently looking for employment. She does not want to lose her home which she has significant equity in.

Here are some of the options explored:

1) Renegotiating the debts and their effect on your credit score,

2) Bankruptcy,

3) Reverse mortgage,

4) Give son opportunity to repay his mother,

5) Find employment, and

6) Credit counseling.

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