Hi there, I am helping a relative out of debt hell and I am wondering if I need to be concerned about writing checks out of my account to pay her bills. I was originally going to try and become an authorized user on her checking account but the bank refused and wanted me to make it a joint account - to which I refused (the account was overdrawn ). So, instead, I opened my own account and she is putting money in it and I am going to pay her bills for a short while. I'm acting sort of like a credit repair or debt management agency. I plan to do this just until I have enough information to make her a reasonable budget and hopefully explain it all to her. So, what do you think? Will they come after me if I write them checks? Assuming that when I turn it over to her she gets behind again (not to be pessimistic or anything, but.... ). Am I assuming any liability here? I did this about 10 years ago when my husband and I became engaged and I don't remember any problems. On the other hand, once I took over, I paid everything off and on time so they really had no cause to complain . And, his name was on the account I was paying with. Thanks, Myschae
I'm no expert, but in my personal experience, creditors don't really give a &%@! who owns the checking account from which they are paid. The primary cardholder/original debtor is the one mishaps will always fall back on. Now, of course, if checks bounce, then naturally your bank will come after you and not the relative for whom you're paying bills.
Wow! I think you are assuming a huge risk in putting your ss# on an account and letting someone have access to it with a poor payment history. They can use that to apply for credit and you not know about it until it's to late. It's kindof you to try and help but, here's what I'd do. I assume the relative can't get a checking account. Ok-have them open a savings account . As bills come due have them pay with a money order. I don't think you have any liability from the current crop of crditors but, it's the unknown that'd worry me.
No, no... she is not on the account in any functional way. She basically has deposit slips and can put money into the account - I write the checks. Her name appears no where associated with it. And, she has no way to get money OUT of the account, either. Well, that's not true. If she wanted it all back, I'd hand it over - with her bills, too!
Mmm.. yes, that's true. But (excuse my ignorance) how does that make her able to apply for credit in my name? The account # is not my ssn#. Myschae, the mystified.
That is nice that you are paying the bills for your relative. THEY CAN'T COME AFTER YOU IN ANY WAY...YOU DID NOT ASSUME THE DEBT...YOU ARE NOT A "JOINT" ACCOUNT HOLDER.
Sorry, I was rushed and should have replied more fully. I started in retail banking way many years ago and I've seen many folks try and help someone like you are trying. About half the time it ended badly. With an account number she can overdraw the account using counter checks. If she's the least bit devious, she can figure out how to get your ssn just by hanging around your house. It just is never a good idea to put your name and ssn on an account that someone with money management problems can access if they really want to. Good luck! I hope everything works well for you and your relative.
Thanks, Keepmine, for your reply. I can see how that is sage advice - too bad I didn't find this board first. Unfortunately, now I think the cat is out of the bag and I'm gonna give this a good 'ole college try... But, you've given me a lot to think about, and I will be very careful to monitor and check. Forewarned is forearmed. Myschae
You are in no way creating yourself an obligation by paying someone else's debts out of your own personal checking account. Legally the funds would be considered a 'gift', no matter what arrangement you have with the person you are operating on behalf of. I would be very careful though dealing with any collection agency though. Unscrupulous collection agencies have to be known to talk a debtor into sending a small token payment (like $5) in the hopes they will write a check on their personal account and then the CA can lift the routing number and account number and do an ACH withdrawal for however much they want. This is completely illegal if unauthorized. Cross Country Bank has been known to do the same thing and pull other shennanigans with ACH payments. A collection agency may attempt to contact you to coerce you into paying more, etc, though. If you are simply paying creditors, they hardly care where the check comes from. In fact, they probably don't even see the checks. The payments likely go to a lock box that is administered by a payment processing company, the don't make any attempt to match names or other info. My partner has several bills in his name for which I write payments out of my account for. His name is not on the account at all. I have never had anyone question this. I would suggest that you protect yourself incase the payment stub and the check get separated but clearly writing the account number on each such check that you remit.
Ah... thanks for the wonderful reply. I wasn't as concerned about her regular bills (utilities, etc) as I was that she has some collections accounts. In fact, that's how I ended up here - I happened to be searching for information on how to deal with CA's. BTW, the letters board and this whole site is excellent! Reading the posts up here about some of the antics CA's have pulled is what got me concerned in the first place. Can you tell me or point me in a direction to find more information about what to do if a fraudulent ACH transaction is processed against my account? Am I correct in assuming there is some sort of legal recourse? The account that I have has substantial overdraft protection (automatic credit line) so I imagine I would find out in time before any checks were bounced (at least I hope so..sheesh). Myschae
Generally the only immediate recourse is to notify your bank that a transaction was not authorized and insist they reverse it. This would require checking the account frequently to monitor the activity on it. Following that I would file a complaint with the banking commission in your state, the state where they are located, the FTC, and the attorneys general in your state and their state. You may inquire with your bank about having them put a block on any ACH withdrawals for you account. Some banks will do this, some will not. Now that on-line bill payment is getting so popular, they may be reluctant to do so. It's unlikely that the CA will pull this trick on you since the check is not in the name of the person they are trying to collect from unless they are really scum of scum, but who knows? They might to contact you to find out what's going on though. If they do, you don't have to tell them anything. In fact, it would be illegal for them to contract you about a third persons's debts without that person's permission. Making payments for that person does NOT imply in any way that permission has been given.
This subject was discussed some time ago on this board. The consensus was it is not advisable to pay some one elses bills from your own checking account as indeed you may very well become obligated to pay the entire account. I may be wrong on this but why take the chance that you might become liable for somebody elses debts when you can protect yourself so easily? The solution is so simple. Just have your friend etc. write the check from their own account for the bills you want to help them with and give the checks to you for mailing. Before you mail the checks deposit the total amount of the checks from your funds into your friends checking account. After you make the deposit just mail out the payments.
HOW??? I don't understand how you ASSUME the "LIABILITY" with-out any contract or having the company add you as a "JOINT" account holder...
I don't recall all the detals of how.But I do know that it was pointed that it can happen. Also like I just said why take the chance when you don't have to??
I just wondered HOW someone could ASSUME responsibility for a debt that they pay for someone else, because I have paid bills for young kids at work who don't have checking accounts from time to time (REGULAR BILLS LIKE PHONE, GAS, CREDIT CARD, ETC...NO CA'S).
I would love to find that discussion - and I've searched under all kinds of seach words. You wouldn't happen to know how I can find that thread so I can read it would you? Thanks, Myschae
I'm sorry I don't recall the title of the thread.Wish I did as I would like to read it again too. Can some else help us here?
I didn't see the thread but, if your name isn't on the account, you're not liable. As George pointed out, we all do favors from time to time for people and we do so without assuming liablity for the debt.
I WOULD GO TO COURT "AGAINST" ANY COMPANY THAT ASSUMED THAT BECAUSE I WAS PAYING SOMEBODY ELSE'S DEBT, THAT I WAS ASSUMING THE TOTAL LIABILITY OR ANY LIABILITY!!!
