Want To Stay With Your Ex Another 20 Years After Breaking Up?

One well intentioned, but really stupid, financial decision can have you dating your ex for another 20 years, or destroy your credit tomorrow.

While they were dating, Larry and his girlfriend signed up for a joint credit card. It seemed like a good idea to have a credit card with both their names on it. Besides, his girlfriend didn’t have good credit, and would never have gotten the card on her own.

Fast forward to today, and the end of the relationship, but the beginning of Larry’s financial nightmare. The credit card at the time of their breakup had a balance of $10,000. They agreed to both be responsible for half. Larry immediately paid his $5,000, and had the statements now mailed to his ex girlfriend. He then called the bank and explained the situation, asking that his name come off the card. He was surprised when they told him no way. Over 90% of the time, that request will be denied. It sure wasn’t going to happen here since his ex had bad credit and they weren’t going to let the person with money and a decent credit score off the hook. Their personal arrangement of paying half each was only that – a personal arrangement. By law, both parties are fully liable for the total balance! His name comes off when the balance is paid in full and the card is closed.

As she can only pay the minimum payments, Larry is literally trapped in the relationship with his ex girlfriend for another 20 years or longer at her minimum monthly payments. That’s how long he has to sweat out whether she’ll pay something every month. If not, he won’t know for a few months and his credit, along with hers, will be destroyed. It seemed like a good idea at the time…

Larry has nothing in writing to enforce her $5,000 half, and she can’t pay it off and end this nightmare. The only hope Larry has to end this sooner is to:

-See her and get her to sign that she owes it. Lie to her and say that the bank needs a letter saying it’s not his debt (which it is) because he’s applying for a loan.

-Offer her a settlement. If she pays $4,000 in the next month (or whatever amount can make it happen), he’ll pay off the rest.

-Offer to kick in $100 a month for any month were she pays $400 to speed it up

-Make sure he calls the 800 number on the card every month to confirm she’s made the minimum payment to protect his credit rating.

What’s the lesson from Larry and countless others in that same situation? Never ever do any joint loans, credit cards, or mortgages unless and until you are married. You can help someone by letting them become an authorized user on your card, you can lend them some money with a simple online loan agreement, but don’t do any joint borrowing. Nobody considers the downside at the time – but nobody can get out from under it when something doesn’t work out.

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