Is this hopeless?
February 10, 2009 4:15 PM   Subscribe

My mother took out credit cards in my name. She is now filing bankruptcy, and she is not able to continue paying the debt that's in my name. My husband's upcoming job will preclude us from filing bankruptcy for the debt in my name. Is there any way I can avoid paying $35k of debt she charged up in my name without suing her or otherwise getting her into serious legal trouble?

I want to say first that I'm going to see a financial advisor asap. What I'm looking for is any information someone who has been in this situation before can give me.

When I was a teenager, my mom took out credit cards in my name because she had too much credit to get them in her name. She paid these credit cards for nearly a decade. It was with my knowledge, but I was a teenager so there wasn't a lot I could do either way, and even if there was something I could have done I'm sure you can understand why I didn't feel that I was in a position to say no. I figured she was paying for them, so it wasn't a huge deal. For the while that she could pay for them, I had good credit so I figured it must be okay. Plus there were pressing medical issues in the family that complicated things financially, which is why my mom had too much credit in the first place; it was the only way we could get by. When I got a bit older (I'm in my mid-20s) I didn't know what to do about the credit in my name because by then, it had snowballed to the point where all she could do was live off credit cards. I didn't want to put her in a position where she could no longer get by, and she was still paying for the cards, so... You can see where this is going.

Recently her paycheck got cut in half. Suddenly all the things she could once pay for, she cannot anymore. She can barely afford much more than her house payment -- which nearly became undoable -- and utilities, so she is going to have to file bankruptcy. That's fine, but it only applies to the debt in her name, not mine. She is co-signer on almost all of my credit accounts, but from what I understand bankruptcy will not wipe that out -- it will just mean that I alone am responsible for the money. She will not have enough money to pay for the accounts in my name, either.

I would just file bankruptcy myself, except my husband is starting a job next month that will disqualify us from doing so, since he will make too much money to file.

Needless to say, I'm quite upset that I'm going to have to pay back $35,000 that I did not charge up, especially when I couldn't have done anything when she took the cards out in my name. However, I am unwilling to get her in legal trouble over it because I don't think ruining our relationship is worth it, and I don't feel right doing it because it's not like she spent the money on frivolous things. From what I understand, anyway, all I could do is take her to court over the amount of the money, and she doesn't have the money to give me.

Is there anything else I can do? Despite our not qualifying for bankruptcy, paying back that much money is going to be a serious financial problem for us.

I'm not looking for a lecture about how I should get my mom in trouble, or how I should have done something to take the credit away from her sooner. Getting her in trouble is not an option for me, and I can't change the past. I'm not going to let her use my credit anymore, and she won't need to anyway since she'll at least have enough for living expenses. What I am looking for is either a "you should look into this option" or a "no, a similar thing happened to me and there's nothing you can do."
posted by anonymous to Work & Money (18 answers total) 2 users marked this as a favorite
Well, I suppose you could get a divorce and then file for bankruptcy.
posted by delmoi at 4:19 PM on February 10, 2009

Talk to a lawyer. There may be a way to "get her in trouble" without getting her in trouble, but it'll probably take someone with legal training to figure out how.
posted by Picklegnome at 4:25 PM on February 10, 2009

However, I am unwilling to get her in legal trouble over it because I don't think ruining our relationship is worth it...

She obviously does.
posted by turgid dahlia at 4:26 PM on February 10, 2009 [37 favorites]

I think that you may be able to work some kind of arrangement out with the creditors--they issued cards falsely in your name, after all, which is really stupid on their part--and get this shit off your accounts and credit history onto your mom's without actually filing charges or a lawsuit against your mom.

But you need your own lawyer, as Picklegnome says. Not your mom's bankruptcy lawyer, but a lawyer who is looking out for your interests.

Remember that if you did file charges or a lawsuit against your mom, the creditors would get nothing. If they move the debts over to her slate, they might get some piece of her post-bankruptcy pie. So you're in a position of strength--they don't need to know that you have no intention of hauling your mom into court, and your lawyer is going to do a better job than you are of bluffing them on that.
posted by Sidhedevil at 4:30 PM on February 10, 2009 [2 favorites]

You can file bankruptcy, just under Chapter 13, not Chapter 7. And then you would have to pay (at least some portion of) the debts in a payment plan over 3-5 years. But you'll want a lawyer for that, too, so no matter what, you probably need a lawyer.
posted by dilettante at 4:56 PM on February 10, 2009

Ouch. For immediate damage control, if you haven't already, you should prevent her from racking up any more debt in your name:

--Get the account numbers and balances for all of the accounts in your name for which she carries cards. Much if not all of that info should show up through your credit reports.
--Arrange things so that the cards she has won't work anymore. But before talking to the banks, consult that financial advisor to make sure that you aren't acknowledging responsibility for the debt when you might otherwise get out of it. You might end up needing to keep accounts open to prevent having the balance become due all at once, but you should be able to deactivate her cards and prevent new cards from being issued in her name or mailed to her address -- the accounts are in YOUR name.
--Prevent her from opening new accounts in your name. After bankruptcy, it will be difficult for her to obtain cards that are not secured and/or very low in limit; she has not resisted the temptation to open cards in your name before, and she does not manage her finances sustainably. I'm thinking of those alert services advertised on tv that call you whenever your credit is pinged, but the financial advisor should be able to give you the most legit option.
--Get online access to the accounts she has opened, and try to get her agree to keep paying the minimum on the cards. Unless the financial advisor thinks this means accepting responsibility for the debt, consider making minimum payments yourself when she does not, to keep your credit from being ruined as things are being straightened out.

I am about your age and have a parent who is similarly irresponsible financially, though I am thankful that we are not so entangled. You don't necessarily need to tell her that you are taking all of the above steps, though if she becomes angry because she can't charge any more in your name -- well, there will have to be a discussion.

Were you under 18 when these accounts were opened? That really might be your ticket out of this... again, make this clear to the financial advisor/lawyer.

How much have you talked about this with her? Why does she seem to think that declaring bankruptcy absolves her of the debt accrued in your name? Don't let her off the hook yourself. If you aren't able to have the debt wiped away somehow, it is worth her explaining to her bankruptcy lawyer and judge that she wants to pay off the $35k in your name, so that that can be incorporated into the plan. The best-case scenario might be for her wages to be garnished to do so, but IANAL or financial professional and don't know if this is possible. Good luck.
posted by ecsh at 5:03 PM on February 10, 2009

Sidhedevil said:

Remember that if you did file charges or a lawsuit against your mom, the creditors would get nothing. If they move the debts over to her slate, they might get some piece of her post-bankruptcy pie. So you're in a position of strength--they don't need to know that you have no intention of hauling your mom into court, and your lawyer is going to do a better job than you are of bluffing them on that.

Which makes it clear that SHD is not a lawyer.

This is a complicated situation which needs the advice of a lawyer. I am not sure what the OP means by "my mom took out credit cards in my name", but even if her name was forged, it was done with her knowledge and with her consent.

But, in most states, any such account opened before the OP was 18 would not be legal, since she did not have the capacity to enter into a contract. But, in some states, her continued complicity could be deemed to be an acceptance of what was originally a voidable transaction.

The OP badly needs legal advice, from a lawyer in her state.
posted by megatherium at 5:18 PM on February 10, 2009

Strictly speaking my answer doesn't tell you much, though.

I don't know how it works over there, but technically speaking, she has committed an act of fraud. She has effectively stolen your identity in order to secure credit. She has then used this credit to make purchases. While you may have consented to this (even though it could be argued that you weren't really able to make this consent, owing to your age), it doesn't matter. I just can't see how this is legal in any way shape or form. She has destroyed your credit rating because her own credit rating was, more or less, destroyed.

I appreciate that you wanted to help your mother and there appear to be a great deal of other mitigating factors. Not everybody is great with managing money, and when there's suddenly 50% less of that money, it's easy for things to get out of control (though it appears they already were).

You need to speak to three people here:

1) Your mother. What the fuck, mom?

2) The bank. Look at this shit, bank.

3) A lawyer. Please hope me, lawyer.

Good luck.
posted by turgid dahlia at 5:37 PM on February 10, 2009 [4 favorites]

You definitely, definitely want to see a lawyer about this, not just a financial advisor, and make sure it's before your mom files bankruptcy. It seems possible that if you were under 18 when the accounts were opened, something could be done to take your name off them. However, if your name is still on the accounts when she files, you're pretty much stuck.

And yes, Chapter 13 is almost certainly still an option for you; under Chapter 13, you still have to pay back a portion of the debt, but if you have to choose between $35,000 and some amount less than $35,000...well, I know what I'd pick.
posted by tomatofruit at 5:43 PM on February 10, 2009

Possibly of interest:

"Last year [2001], the Federal Trade Commission says, 6 percent of the 86,168 people who reported identity theft to the agency said a family member was responsible." (see also TransUnion and Equifax, though)
posted by ecsh at 5:49 PM on February 10, 2009

Yes, I am not a lawyer.

I do know someone who had a similar situation, though, and he was able to get this resolved without filing either charges or a lawsuit against his family members.

But that was 10+ years ago, and in Connecticut. Times have changed, and state laws are different.

So as megatherium says, see a lawyer.
posted by Sidhedevil at 6:30 PM on February 10, 2009

I know someone in a situation that had some similarities. A lawyer is needed because this issues are complicated (like being a minor) and it depends on how they were opened (co-applicant? authorized user? who signed the card applications? etc) . Yes, it was pricey (a few grand) but was said to be 1000% worth it.
Will you have to "get your mom in trouble"? Maybe; depends on what she did. However, if creditors or courts come asking you questions, you have to tell the truth.
posted by pointystick at 6:51 PM on February 10, 2009

If you are unwilling to make her accountable for her actions, then you're stuck paying for 35K of her bills. She racked up the bills in your name and with your consent for the last few years.
posted by 26.2 at 7:54 PM on February 10, 2009

Meantime, put a fraud alert on your credit report. Simple and prevents new credit from being opened in your name without serious hoop jumping.
posted by mazienh at 8:18 PM on February 10, 2009 [1 favorite]

I am unwilling to get her in legal trouble over it because I don't think ruining our relationship is worth it,

Wow. You realize she valued the money over your relationship, right?

Anyway, this is more common than you think. I know of lots of people who can't get an apartment in their own name or pay the utilities in their own name and such.

A lawyer can advise you but it is possible for your mother to include the debts in her bankruptcy if she files Chapter 13 and is able to confirm a reasonable payback plan. Otherwise when she files those debts will still be out there hanging over your head.

If you are not in a community property state you can file separately from your husband, so that may be an option. It is also possible even if you are to file Chapter 13 yourself and, again, try to get a payback plan confirmed. But this would be a tricky thing. You'll want an attorney versed in bankruptcy law, not just your family jack-of-all-trades lawyer. It's become fiendishly complicated since 2005.

But essentially you have been defrauded and your mother is the culprit. You'll both have to face up to that fact now one way or another.

Despite our not qualifying for bankruptcy

Are you talking about the means test? That just determines whether you have to get into Chapter 13 vs. Chapter 7. It certainly should be possible for you to file Chapter 13 for this amount of money, no matter what your income. The whole point of the means test is to make more people use Chapter 13.
posted by dhartung at 9:21 PM on February 10, 2009

Just a thought: if you really want to avoid taking your mother to task for this, perhaps you should take steps immediately to stop her from running up more credit under your name (don't wait for her to file), then contact a legitimate credit counseling agency (make that legitimate AND free) and work out a plan to pay off these bills over a long period of time.

My wife and I did this with $50,000+ in debt, and managed to pull it off. It wasn't always easy, and some months we sold things to make the rent + monthly credit payment, but now that debt's gone.
posted by davejay at 11:34 PM on February 10, 2009 might be another good place to ask this question. You have to register, etc, but people there are pretty knowledgeable.
posted by salvia at 8:03 AM on February 11, 2009

The fact that you're willing to bankrupt yourself and let your mother walk tells me you don't have a healthy relationship. I mean, I love my mom too, but God. Damn. This woman has burned you. She needs to be held to account for her actions, or she has no hope of getting better.

Have you told your husband? Because you should. Maybe he has the guts to do what you can't, and dob her in to the police.
posted by obiwanwasabi at 7:23 PM on February 11, 2009

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