Disadvantages of Co-Signing on Credit Cards and Loans

Larry Smith August 23, 2011 0

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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Larry Smith
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