legality/possibility of paying off someone else's debt anonymously

May 31, 2007 3:16 AM

I wish to anonymously pay off the debt of someone I know. How easily/legally can this be done?

I assume if I obtain this person's SSN I can run a credit check, see which debts they have and use the SSN to access/pay off these debts. However, assuming actually finding someone's SSN is possible (is it?) I'm concerned about the legality of the whole thing. It seems like you would need permission to run a credit check...

Are there any services that would take care of this for me or any way this can legally be done? I can't be the first person who has ever wanted to do something like this.

I don't want to explain why this is anonymous, please assume there's a good reason. Also, contacting this person's parents for the information is not possible.

Thanks!

posted by anonymous to Work & Money (24 answers total)

You could mail the person an envelope of cash. I think that's as close as you'll get to anonymity without invading their privacy or otherwise doing something illegal.
posted by blue mustard at 3:33 AM on May 31, 2007

Yeah, the whole SSN/credit report thing, if not illegal, is really creepy. Anyway, you need more than the person's SSN to run a credit report; there are generally security questions about the person's other accounts that must be answered before you can actually see the report.

Do you know the person well enough to visit their house? If so, you could always hang around their desk, office, or wherever they keep the mail, snag all the credit card statements you can find, and get the information that way. Still weird, and still ethically questionable, but it would work and would probably not land you in jail or estrange you from the person.

Otherwise, all you can do is send the person some money with the intent of them using it to pay their debts, but there's no way you can guarantee that they'll actually use it for that purpose.
posted by boomchicka at 4:00 AM on May 31, 2007

If this contact has PayPal, you can send him money this way via a fake account like this: (1) set up your own real PayPal account, transfer $100 to it from your bank. (2) send that money to your fake Paypal account (which is not linked to any bank) and then (3) transfer it to the individual. This probably isn't as exciting as just eliminating his debts though.

Maybe via a sneaky conversation you could figure out a round figure then find out his credit card number and send a money order in his name
posted by mateuslee at 4:11 AM on May 31, 2007

Unless you are an acquaintance of the person and would be able to sift through a pile of their bills to get their various account numbers and balances, I don't think there would be a legal way to do this, other than just sending them money. I'm assuming you don't want to do that because they might not use it to pay bills. I suppose you could endow some kind of trust that gives them permission to withdraw only for paying debtors, but the administration fees for such a setup would be substantial.
posted by Rhomboid at 4:16 AM on May 31, 2007

Possibly a lawyer may be able to act as an intermediary - sending a letter to your contact to ask how much they owe, forwarding the reply to you and then handling any money transfers. In the - no doubt unlikely - event that the person does not want their debts paid off then this method also provides a way of letting you know that.
posted by rongorongo at 4:17 AM on May 31, 2007

Arrange for a go-between (a lawyer would be cool, seeing as you're already burning money) to discuss it with this person. Then you could transfer money to the lawyer and the lawyer could transfer the money (minus the customary gigantic percentage they take) to your friend's various burdensome accounts.

If you know something particularly admirable about this person that might be publicly known, you could try making up a cover story about a rich person who likes to pay of the debts of people who are in this way admirable. For example, have the lawyer explain that some rich person hopes to begin paying off the debts of one special-education teacher every year for reasons the lawyer is not in a position to discuss. This could throw your friend off the scent, assuming you want to avoid discovery.

But if I were the person receiving such an offer, I would be very suspicious and might even turn it down out of fear that the thing was a scam ("You need my personal financial information?! So you can pay off my debts?! WTF?!LOLCAT?!GTFOOH!!"), so you might have to encourage the target to also get a lawyer to make sure things are on the up and up. In that case, make sure you also offer to pay for the second lawyer. (I swear, IANAL.)

Or... leave a bag of money in a hollow tree and slip a note through the mail slot, but then you'll never know whether you've over- or underpaid for the person's debts and you'll never be sure the person even paid off debts instead of giving it to someone else or betting it on the horses.
posted by pracowity at 4:18 AM on May 31, 2007

From a practical point of view, you could probably drop the money through the deposit letterbox in the bank with "For the account of Mr Firstname Middlename Lastname of Address, Town" written on the front. I'm sure they'd figure it out.
posted by reklaw at 4:36 AM on May 31, 2007

The lawyer idea is a good one. Also a private investigator might be able to help, although in the age of identity theft I don't know if any would be willing to hand over SSN and account numbers.
posted by boomchicka at 4:48 AM on May 31, 2007

A few more things to think about:

1. If you know the person, are you prepared to keep this secret from them forever? What if they obsess about it and embark on a mission to find out who paid their debts?

2. Also what happens if / when they find out it was you? It's possible and very likely that they can find out if they really want to. A secret of this magnitude, kept with even the best of intentions, could change or end your relationship with them.

3. What if they run up all their credit cards again? Will you keep bailing them out? Will you be able to hold your tongue if you see them abusing your generosity?

4. Find out if there could be any tax implications for the recipient. You don't want to do this nice gesture only to plunge them into an audit or worse if the IRS wonders where they suddenly got a large chunk of money. There might not be any risk, I don't know, but you should definitely find out.
posted by boomchicka at 5:22 AM on May 31, 2007

talk to a lawyer. you can probably set up a trust for that person, which will only allow them to withdraw money for their debtors (or send the money to their debtors directly).

but yes, do take into consideration any tax burden that might ensue. i imagine it will still be a lesser evil than all that accumulated debt, but make sure.

finally, although this is a great gesture, i would think twice about the kind of debt they're in. it's one thing to pay off student loans and medical bills, quite another to pay off a land rover and a wide-screen tv. you can't save people from their own bad habits--you'd only be deferring the unpleasantness.
posted by thinkingwoman at 5:52 AM on May 31, 2007

The IRS might be suspicious if the person suddenly came into an unaccountable sum of money. I think this person might be surprised to find themselves at the center of an audit for which they couldn't account for this sudden windfall. Be aware in these days of tight fiscal controls, the IRS takes a keen interest in any source of tax revenue.
posted by JJ86 at 6:03 AM on May 31, 2007

Out of interest: do you have any more information on the types of debts we're looking at here? And how much access do you have to this person's information? For example, how do you know they're in debt, and do you know to what degree they're in debt? Are they in any kind of debt management / repayment scheme?

The reason I ask is that (UK resident speaking) I know that credit card companies generally don't ask any questions when making balance transfers or when receiving payments. They don't care where the money comes from as long as they get it. But there are all sorts of variables here that you haven't provided.

Separate from this, my instinct is that you should contact this person directly and make an honest straightforward deal that is hard for them to refuse. One that allows you to be generous for your own reasons but without them feeling guilty or that you're being creepy.

Tell the person that you have just come into a lot of money and that you want to spread some positive karma. Offer them a zero percent interest loan, with no chance of foreclosure. They have a responsibility to pay you back over the course of, say, 75 years. But you agree with them that you'll never chase them for the full amount as long as they are paying you a regular token amount towards its repayment.
posted by skylar at 6:08 AM on May 31, 2007

If you know who the creditors are, just contact them directly. While a scrupulous one (assuming there is such a thing) likely wouldn't divulge personal information, they honestly don't give a fuck where the money comes from so long as they get paid.

As an alternative, if you go the lawyer route, why not see if you can buy the note from the creditor for some fraction of the amount owed?
posted by trondant at 6:15 AM on May 31, 2007

If you pay anonymously, a given creditor may just take the money and not credit it to your friend's account. Say you send $5,000 to citibank on Joe's behalf, citibank just takes it and still pursues Joe for the $5K. Joe has to know about the payment, both to keep citi honest, and so he doesn't go around thinking that citi just made a mistake that they'll later want reparations for.

Trondant's last idea seems like a really good idea to me. Creditors sell each other their debt at discounts all the time. If you can find a lawyer who knows how this sort of thing is done, that would be fantastic.
posted by yesster at 7:15 AM on May 31, 2007

If I noticed a large anonymous payment on any of my accounts/debts or a payment in my name that I know I didnt make, as a good honest citizen, I would phone my bank/creditor and explain the error.
You could end up having your money returned or worse, the creditors just sitting on the money not knowing what to do with it.
posted by missmagenta at 7:21 AM on May 31, 2007

do this through a lawyer, and then don't ever mention it again.
posted by wearyaswater at 7:33 AM on May 31, 2007

missmagenta makes a good point. If you do it, you really should send the person an anonymous note telling them that it's not an error and that X credit card company has been paid $X by an anonymous donor.
posted by boomchicka at 7:50 AM on May 31, 2007

Probably not a legal way to do it, and especially not a way to do it anonymously without seeming creepy/stalkery.

However, if it's my debt you want to pay off, I'll gladly work something out with you.
posted by misanthropicsarah at 7:51 AM on May 31, 2007

IANAL, but I believe this would be considered a gift, which would be taxable if over $12,000 (if you're in the U.S.) From the info at the link below, it sounds like you'd have to file a return at the least if you gave more than that.

Also, if you have trouble figuring out a way to find their information in order to pay this person's debts, or just have money left over, just contact me and I'll be happy to let you pay mine off. :)

From the IRS (link): "Generally, you do not need to file a gift tax return unless you give someone, other than your spouse, money or property worth more than the annual exclusion ($11,000 in 2002, 2003, 2004 and 2005; $12,000 beginning in 2006) for that year. Although a return may be required, no actual gift tax will become payable until the cumulative lifetime taxable gifts exceed the applicable exclusion amount. The donor is primarily responsible for the payment of the Gift Tax."
posted by greenmagnet at 8:02 AM on May 31, 2007

If you e-mail me, I'll send you my phone number. You can have a friend who doesn't know me contact me, and that person can act as an intermediary between us. I can get the credit report myself, and then give it to our intermediary.

I'm not sure why you want to act anonymously, but I really appreciate it -- and your understanding that money is super-tight these days.

Thank you so much!
posted by brina at 8:13 AM on May 31, 2007

You don't say what sort of debt they have ... if they have a mortgage, there will be a record of who holds the mortgage at the county courthouse (in the US).
posted by yohko at 9:01 AM on May 31, 2007

This is what I'd do, though it's technically illegal: steal his (or her) mail. Only open and pay the bills, return the rest to the mailbox a day late. After a couple of weeks, send a card to the person explaining that a mysterious benefactor has decided to pay his bills, then list the one's which have been paid. Mail theft is a big crime, but that wouldn't stop me (in such a case.)
posted by Dee Xtrovert at 11:09 AM on May 31, 2007

Just some counterpoint, based on friends' hard-learned life's lessons:

If this is for a love interest that you're chasing, don't do it, esp. if you're a guy and she's a girl. She'll either see you as a chump, which is very unattractive, or as a creepy stalker guy who won't take "no" for an answer -- but she'll prolly take the money anyhow.

If this is for somebody who can't seem to get their life together (into drugs, credit-card debt, etc), don't do it. You're enabling an unhealthy lifestyle. Why should they bother to get their shit together when the money fairy will come bail them out?

Best of luck.
posted by LordSludge at 2:10 PM on May 31, 2007

Dude, Just as me for my social, I'll give it to ya : )
posted by crewshell at 4:36 PM on May 31, 2007