I found out My brother used both my parents social # to get numbers of credit cards when he had serious gambling problem yr ago. He had 3 credit cards under my dad's name 20k and 5 under mom's name and 1 joint account (mom and dad's) of total more than $70k debt. He told me he quit gambling now and will make sure all his paycheck to pay off this debt. $2500 montly. My mom wanted file bankrupcy but they had very good credit ,not single late payment and since my brother told them he will pay it off in few yrs. and since couple months ago we started getting calls from cc , account is 60 days past due. He told me he lost his job and coundt pay. My parents dont want to take legal actions against him which could send him to jail. but luckily (?) They don't have house and no assets. but my dad's running small business and has 30k in his saving account which is for retirement. How should he approach to credit card company ? Do you think Are they willing to settle for less without police report ? If he doesn't pay it , will they file judgment against him and garnish his saving account ? We are thinking at least 1 of them must keep good credit . so pay it off under my dad's name ? Can my mom's debt go after my dad ? We live in california which community property state.
With the amount of debt you are talking about, you will likely get more than collection letters. What will they do if some of the creditors sue? Pay out their retirement savings (assuming it is not protected in an IRA or 401K), then declare bankruptcy? Are your parents prepared to be wiped out by their son's theft, including loss of the father's business? You have a dilemma, in that if they file a police report on the fraud, they will owe nothing on debts they did not create, and the accountability will likely fall where it belongs, or they can pay and pay and pay, to avoid their son possibly facing prosecution for what he did in fact do, and pay higher jacked rates on everything even as they pay off the debts. It will probably cost the son the same in court whether the parents pay some of the debts and then later have to file a police report, or file a fraud report up front. The son could even do it again, and they would have a harder time showing the debts were not theirs. As far as the CC companies being willing to settle for less than the amount owed, why should they? They have the best of both worlds: an irresponsible CC spender whose bills will be paid by a responsible party with assets. If they haven't already done so, they will jack the rates to the default rate as they jockey to be first to be paid off. Your parents' unwillingness to file a police report, which is common in these circumstances, is their best leverage to get paid. They need to talk to an attorney, to review their options, and likely consequences to their son. They should probably do this without their son accompanying them. Here is a legal and ethical question: Can and should you declare bankruptcy to discharge debts owed to legitimate creditors in order to partly pay fraudulent debts you do not legally owe? Do you have to disclose to the bankruptcy court that some of the debts you are asking to be included in bankruptcy are not your legitimate debts, and could instead be dismissed by filing a legitimate police fraud report? Should you cheat Peter to pay Paul?
