Credit Card Madness, Seeking Help

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alex_686
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Credit Card Madness, Seeking Help

Post by alex_686 »

I know that finances and family is a toxic mix, and there is no suggestion of our family bailing out theirs. However, I need the collective wisdom of this forum to give actionable advice to my sister-in-law – to empower her to make good choices.

Story: Her husband has run up quite a bit of debt, some of it in her name. He opened up a credit card using her social security in and ran up a balance of 5k+. He has done this once before, but not to this level. Neither are savers, living paycheck to paycheck. Their income is also modest, so this is a big hit. I don’t know the full story, but my SIL’s husband does not have a credit card due to unpaid student loans, and perhaps other outstanding unpaid credit card debt.

This is what I have so far.

First, put a freeze on her credit. This is a no-brainier. Note, most of their finances are already separated. The home and mortgage is in her name and the checkbooks are separate. I don’t know what more to do here.

Second, could she contest the charges? I don’t have the full story but I think she became aware of the card back in January when she pulled a copy of her credit. Or has it been too long? Does anybody know if there is a window to contest this? I am assuming that she would need to file criminal charges against her husband, and I don’t know if we are there yet – they have 2 young children.

Third, I want to suggest that they attend credit counseling. You are not going to solve this issue unless the underlying behavioral issues are fixed. How do I find a quality program? I used to volunteer for one, so I am acutely aware that most are poor quality and some are outright scams. To compound this problem, they live in a rural area.

Any other suggestions or plans of attack? Thanks All!
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
panine
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Re: Credit Card Madness, Seeking Help

Post by panine »

She needs to extricate herself from him in all ways. This isn't a credit counseling thing. This is fundamentally unethical (perhaps criminal) behavior that has shown itself to happen again. He is who he is and does what he does to her without care. Good luck.
lakpr
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Re: Credit Card Madness, Seeking Help

Post by lakpr »

I think she should head over to creditboards.com site. Just like this forum’s expertise is in overall personal finance, that site’s expertise is in credit related matters.

One thing she could do is to dispute the account as not mine. But be careful though, I have also seen reports that such “not mine” disputes simply get auto-verified by credit bureau bots. There are specific techniques to use in disputing accounts that are not yours to ensure they get acted upon, not auto-resolved/auto-dispatched by credit bureau computers.

Is your SIL willing to file a police report for identity theft? At its basic, what you are describing is ID theft. It might be her own husband, but it is still ID theft.
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Re: Credit Card Madness, Seeking Help

Post by Jack FFR1846 »

It's not even perhaps criminal. It's criminal.
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dm200
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Re: Credit Card Madness, Seeking Help

Post by dm200 »

alex_686 wrote: Tue Apr 23, 2019 3:05 pm I know that finances and family is a toxic mix, and there is no suggestion of our family bailing out theirs. However, I need the collective wisdom of this forum to give actionable advice to my sister-in-law – to empower her to make good choices.
Story: Her husband has run up quite a bit of debt, some of it in her name. He opened up a credit card using her social security in and ran up a balance of 5k+. He has done this once before, but not to this level. Neither are savers, living paycheck to paycheck. Their income is also modest, so this is a big hit. I don’t know the full story, but my SIL’s husband does not have a credit card due to unpaid student loans, and perhaps other outstanding unpaid credit card debt.

This is what I have so far.
First, put a freeze on her credit. This is a no-brainier. Note, most of their finances are already separated. The home and mortgage is in her name and the checkbooks are separate. I don’t know what more to do here.
Second, could she contest the charges? I don’t have the full story but I think she became aware of the card back in January when she pulled a copy of her credit. Or has it been too long? Does anybody know if there is a window to contest this? I am assuming that she would need to file criminal charges against her husband, and I don’t know if we are there yet – they have 2 young children.
Third, I want to suggest that they attend credit counseling. You are not going to solve this issue unless the underlying behavioral issues are fixed. How do I find a quality program? I used to volunteer for one, so I am acutely aware that most are poor quality and some are outright scams. To compound this problem, they live in a rural area.

Any other suggestions or plans of attack? Thanks All!
Seems to me that he committed "identity theft" to open the cards and run up charges. I suspect she would not take action against him.

What income does he have? Can he and/or will he make payments on this $5k? Whatever she can get him to do - the better.

Yes - do everything in her power to prevent him from his using her "identity". Freezing credit reports makes a lot of sense, but if he is good at identity theft, might he just "unfreeze" the credit?

Just my two cents - but suggesting "counseling" (for him) is just a waste of time. She might be "counseled" to continue to be tough on his running up bills - and look for ways of being "tougher". That's good she has separated their finances - just make sure he cannot break in to her money and credit.
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alex_686
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Re: Credit Card Madness, Seeking Help

Post by alex_686 »

Yes, I think we can all agree it is criminal. The question is if she is going to file. If she does then I would think it will would be the end of their marriage. Their marriage may already be over and they are just sticking around for the kids. In any event, I am not going to be the one which pounds the last nail into this coffin. This has to be her decision.
dm200 wrote: Tue Apr 23, 2019 3:16 pm What income does he have? Can he and/or will he make payments on this $5k? Whatever she can get him to do - the better.
Yes - maybe. He has a job as a postal carrier. However he has never managed his money well. 1 year of community college with unpaid debt. Loves big SUVs. Loves his toys. Tends to put his short-term interest ahead of the family. Of course, I only have one side of the story - my SIL. And she has never been a saver or a planner either.
dm200 wrote: Tue Apr 23, 2019 3:16 pm Just my two cents - but suggesting "counseling" (for him) is just a waste of time. She might be "counseled" to continue to be tough on his running up bills - and look for ways of being "tougher". That's good she has separated their finances - just make sure he cannot break in to her money and credit.
I would agree. That being said, I do want to come back with positive actions as well as negative. If he does not chose to reform, little can be done - but you just don't want to abounded all hope either.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
delamer
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Re: Credit Card Madness, Seeking Help

Post by delamer »

She needs to cancel the credit card so that her husband can’t make any further charges.
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megabad
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Re: Credit Card Madness, Seeking Help

Post by megabad »

alex_686 wrote: Tue Apr 23, 2019 3:05 pm I know that finances and family is a toxic mix, and there is no suggestion of our family bailing out theirs. However, I need the collective wisdom of this forum to give actionable advice to my sister-in-law – to empower her to make good choices.

Story: Her husband has run up quite a bit of debt, some of it in her name. He opened up a credit card using her social security in and ran up a balance of 5k+. He has done this once before, but not to this level. Neither are savers, living paycheck to paycheck. Their income is also modest, so this is a big hit. I don’t know the full story, but my SIL’s husband does not have a credit card due to unpaid student loans, and perhaps other outstanding unpaid credit card debt.

This is what I have so far.

First, put a freeze on her credit. This is a no-brainier. Note, most of their finances are already separated. The home and mortgage is in her name and the checkbooks are separate. I don’t know what more to do here.
I think the credit freeze suggestion is a good one for other reasons. This would not prevent spouse from racking up debt in his own name though and in some states, this could affect SIL.

Second, could she contest the charges? I don’t have the full story but I think she became aware of the card back in January when she pulled a copy of her credit. Or has it been too long? Does anybody know if there is a window to contest this? I am assuming that she would need to file criminal charges against her husband, and I don’t know if we are there yet – they have 2 young children.
I suspect the easiest way to "contest" would be to execute a divorce and argue with the court that the debt should be assigned to him. This would be dependent on the specific situation and state law though and I am not a lawyer.

Third, I want to suggest that they attend credit counseling. You are not going to solve this issue unless the underlying behavioral issues are fixed. How do I find a quality program? I used to volunteer for one, so I am acutely aware that most are poor quality and some are outright scams. To compound this problem, they live in a rural area.
While I do not think credit counseling will help to save this marriage, I would recommend an affiliate of the national foundation for credit counseling for at least the husband when the marriage issue is settled.

Any other suggestions or plans of attack? Thanks All!
I would tread lightly. The suggestions above are borderline overstepping in my opinion but I do not know your family situation. I wouldn't want to ruin a family relationship. If it were my family, I would not express my opinions or suggestions unless explicitly asked for.
NotWhoYouThink
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Re: Credit Card Madness, Seeking Help

Post by NotWhoYouThink »

I am assuming that she would need to file criminal charges against her husband, and I don’t know if we are there yet – they have 2 young children.
Important technicality. Victims do not file charges, prosecutors do. Victims report crimes to the police, who generate reports. If she wants to dispute the charges and not pay them, she needs to walk into a police station and tell someone that he stole her identity. She then loses control over what they do about it, which may be nothing or may include prosecution. But the police report is her first step at getting the card issuer to remover her name as being someone responsible for the charges.

If she does not file a report, the charges are her responsibility, and not paying them will affect her credit rating, and subject her to whatever debt collection tactics the issuer chooses.

No easy choices here, but freezing her credit now can prevent further damage from being done.
aristotelian
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Re: Credit Card Madness, Seeking Help

Post by aristotelian »

panine wrote: Tue Apr 23, 2019 3:10 pm She needs to extricate herself from him in all ways. This isn't a credit counseling thing. This is fundamentally unethical (perhaps criminal) behavior that has shown itself to happen again. He is who he is and does what he does to her without care. Good luck.
How can she extricate herself in all ways if they are married? I don't see anything in OP to suggest that divorce is on the table.
yohac
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Re: Credit Card Madness, Seeking Help

Post by yohac »

Assuming she's asking for advice (and if not, then respectfully, butt out) she should insist that hubby surrender that card. If he won't, the marriage is basically over anyway.
panine
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Re: Credit Card Madness, Seeking Help

Post by panine »

aristotelian wrote: Tue Apr 23, 2019 5:40 pm
panine wrote: Tue Apr 23, 2019 3:10 pm She needs to extricate herself from him in all ways. This isn't a credit counseling thing. This is fundamentally unethical (perhaps criminal) behavior that has shown itself to happen again. He is who he is and does what he does to her without care. Good luck.
How can she extricate herself in all ways if they are married? I don't see anything in OP to suggest that divorce is on the table.
The way she extricates herself is through divorce unless there's another way to permanently detach from a scheming husband. If she stays connected to him, no one would be surprised of he takes her for all she's worth eventually. It's a tough choice, but probably the least worst choice in the long run.
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Re: Credit Card Madness, Seeking Help

Post by Nate79 »

Dave Ramsey, Financial Peace University, and marriage counseling.
6Pack
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Re: Credit Card Madness, Seeking Help

Post by 6Pack »

First, did she ask you for help or are you offering unsolicited advice? If she asked for educational help, then proceed. If not, then it might be best to let her and her husband manage their financial matters as they see fit. My in-laws offered unsolicited advice about my wife and I’s Family planning and it caused a problem.

Second, does she want a quick fix or a long term solution? If she wants a long term solution, then her husband has to be on board. If she wants a short term fix, then her husband has to be on board. Don’t forget, your sister-in-law’s (SIL) husband is part of this equation, for better or worse. Money problems are one of the biggest causes of divorce, so if the situation is dire enough, she may need to consider all of her options.
Leemiller
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Re: Credit Card Madness, Seeking Help

Post by Leemiller »

I recall hearing that they don’t always run your credit when issuing credit, so freezing isn’t a 100% fix. But wow. I don’t know that I would have much advice to offer other than leave him.
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Re: Credit Card Madness, Seeking Help

Post by drawpoker »

This is a tough call, but if I were you I would ask for more information before making any hasty decisions.

What constituted the bulk of the $5,000 in charges he rang up? Gambling? Porn? Hookers, Massage Parlors? Liquor(or drugs) Expensive clothes, watch or jewelry for just himself? If any of this is true, then you have your answer.

But - given what you described as having a modest income and two kids - is it possible that he went overboard in trying to be a good provider? Were the charges mostly related to the support of his family, not indulging himself? That puts a different complexion on it.

Granted, what he did was clearly wrong, and cannot be excused. But IF - and this is a Big IF - his motives were good, just horribly carried out, then there may be hope for the marriage.

Criminal charges resulting in a conviction against a USPS employee will likely result in his termination. Especially if his job is a mail carrier or handler. The postal service isn't keen on having workers handling mail that may contain credit cards or other financial instruments, if those workers have been convicted of identity theft and fraud.

Is your S-I-L prepared to go that far? $5,000 may sound terrifying to her if they are living paycheck to paycheck. But, it's $5,000, not $50,000. She can work out a repayment plan with the help of one of those free credit counseling services (one of the reputable ones, of course, and they can usually be found through the local extension service office)

Once you have all the facts, I'd suggest an old-fashioned "intervention" confrontation where you assemble every single stake-holder here, immediate family, in-laws, close friends, et al. Get as many people who know the subject as you possibly can find to agee to participate. Spring it on him as a surprise with no chance for him to get advance warning. Just like they do with people with an addiction problem who need help.
srt7
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Re: Credit Card Madness, Seeking Help

Post by srt7 »

We don't have a full picture here and certainly only one side of the story. So it would be unwise to offer advice that might actually result in making a bad situation worse. But it is never a bad idea to see a marriage counselor.
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alex_686
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Re: Credit Card Madness, Seeking Help

Post by alex_686 »

Everybody, thanks for the advice. I am being careful on what I am suggesting. She is currently in "What am I going to do!" phase, instead of the "What am I going to do?" Wife's family is very negative towards SIL's husband and I am not going to engage in that dynamic. I want to engage in "If you chose X, then Y", a list of resources, and open arms if they need them.

While I might privately think that divorce is the best option I would never say that - I just don't know the dynamic of the marriage well enough.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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alex_686
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Re: Credit Card Madness, Seeking Help

Post by alex_686 »

drawpoker wrote: Tue Apr 23, 2019 8:48 pm What constituted the bulk of the $5,000 in charges he rang up? Gambling? Porn? Hookers, Massage Parlors? Liquor(or drugs) Expensive clothes, watch or jewelry for just himself? If any of this is true, then you have your answer.
Not exactly sure what it was spent on, but the card was through a sporting goods store. So may some went to cloths for the children, maybe some towards Xmas presents, but I suspect the bulk was spent on himself. He has had issues with spending money on porn in the past but this does not seem to be a issue today.
drawpoker wrote: Tue Apr 23, 2019 8:48 pm Granted, what he did was clearly wrong, and cannot be excused. But IF - and this is a Big IF - his motives were good, just horribly carried out, then there may be hope for the marriage.
This is sort of my opinion, but colored a bit more darkly. I would rate this higher than infidelity, but marriages have survived that. I would agree that 5k is not the largest thing in the world. It is his repeat behavior. He has never been good with money, always been a bit selfish with it, and has been bailed out many times.

The intervention idea is interesting, but SIL's family and husband's family have a low opinion of each other. I will bring up that idea if SIL asks for more help.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
Greenman72
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Re: Credit Card Madness, Seeking Help

Post by Greenman72 »

This advice isn't exactly what you're looking for, but I feel compelled to offer it anyway.

I have a good friend who used to be a divorce lawyer. And he said that of all the divorces that he did, he has almost never seen a situation where a either husband or wife (with property and kids) were better off after the divorce--economically, spiritually, emotionally, phyically, you name it. The only times that he thought either of the two parties was better off was when there was actual abuse (physical or sexual) involved.

That said, there are a lot of things that are worse than your spouse running up $5k in credit card debt. Yes, it is shameful, and yes, it is wrong, and yes, he shouldn't have done it. But if she gets a divorce, there's approximately a 100% chance that she will be worse off economically than she is now. Plus, there will be problems with the family dynamics, absenteeism from the father, etc. $5k in debt is nothing compared to what she's facing if she gets a divorce.

So, if I were to offer two pieces of advice, they would be this: 1.) She really really really needs to think long and hard about this, before she pulls the trigger on anything. And 2.) You need to stay far, far away from this. Not your problem. I'm not trying to be insensitive, but I think by inserting yourself in the situation, you're not going to help anything, and you'll probably only make your own life worse.
delamer
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Re: Credit Card Madness, Seeking Help

Post by delamer »

Greenman72 wrote: Wed Apr 24, 2019 7:06 am This advice isn't exactly what you're looking for, but I feel compelled to offer it anyway.

I have a good friend who used to be a divorce lawyer. And he said that of all the divorces that he did, he has almost never seen a situation where a either husband or wife (with property and kids) were better off after the divorce--economically, spiritually, emotionally, phyically, you name it. The only times that he thought either of the two parties was better off was when there was actual abuse (physical or sexual) involved.

That said, there are a lot of things that are worse than your spouse running up $5k in credit card debt. Yes, it is shameful, and yes, it is wrong, and yes, he shouldn't have done it. But if she gets a divorce, there's approximately a 100% chance that she will be worse off economically than she is now. Plus, there will be problems with the family dynamics, absenteeism from the father, etc. $5k in debt is nothing compared to what she's facing if she gets a divorce.

So, if I were to offer two pieces of advice, they would be this: 1.) She really really really needs to think long and hard about this, before she pulls the trigger on anything. And 2.) You need to stay far, far away from this. Not your problem. I'm not trying to be insensitive, but I think by inserting yourself in the situation, you're not going to help anything, and you'll probably only make your own life worse.
It seems that the perspective of a divorce lawyer is somewhat skewed, because they only have continued involvement with clients who have significant, ongoing issues with their former spouses.

People who divorce, settle their issues, and move on without major problems wouldn’t be on their lawyers’ radar.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
ohai
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Re: Credit Card Madness, Seeking Help

Post by ohai »

Unless she wants to divorce him, what's the point of making a criminal charge? Him paying her back just goes into a different pocket in the same household, and it will destroy their marriage, all over $5k.

Overall though, they are in a "credit emergency" and it sounds like husband needs some serious intervention.
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alex_686
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Re: Credit Card Madness, Seeking Help

Post by alex_686 »

Everybody, thank you for your advice. It reinforces and clarifies my original opinion.

Gold stars to Megabad, Drawpoker, and NotWhoYouThink.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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quantAndHold
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Re: Credit Card Madness, Seeking Help

Post by quantAndHold »

This isn’t really a financial question, it’s a relationship question. This is about trust.

My wife’s ex did the same thing. Used the money to buy drugs. And contrary to the previous poster’s assertion, my wife was most definitely better off after the divorce. Both financially and personally. So were the kids.
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