Your kids would inherit your card balances

I dont know but I dont think your kids would inherit your card balances. I dont know. If you are worried about that – depending on the balances you carry maybe you should take the credit insurance they usually offer- it costs according to the balance you have but if you die they supposedly pay the balance off. I never go that route but instead have a life insurance policy and one on my DH.

Its worth the money to us to pay a monthly premium for some coverage that would take care of the balances and final expenses among other things etc. should something happen. There are ways to make sure your kids wont incur your debts and yet will be able to make your final arrangements if you have’nt done so already.

Talk to family members, an attorney, maybe a financial planner or adviser. I dont have any real advice but instead of worrying about having a credit card available to you to use in an emergency.. why not concentrate on an emergency fund or actual cash that you can rely on in an emergency? Work toward that and save the credit card as a very LAST resort. Let me see if I can offer some clarity and a suggestion.

As for leaving credit card balances to kids. That doesnt happen. Your accounts are your accounts. Your children have no legal responsibility to your outstanding debts it you die. The only way they would be resonsible, would be if they were listed on the accounts as joint account holder. Your estate, if there is one, would be responsible. If there were not enough funds available, then the creditors miss out. There is nothing else they can do. I hope that helps.

As for the credit counselors, I’m not a big fan. I have seen what they do to people and it isnt good. Keep the Discover account for the emergencies. I have 3 kids. I understand that. The others, you can settle each 1 as time goes on.

As for creditors sueing you, depends on where you live. And whether you are worth the legal endeavour. IF they dont think there is a chance to recover their money, they wont sue you. Hope that helps.

Consumer Counseling vs Credit Settlement

I am new to this blog and really appreciate all the advice and support you all offer. I live in Oregon and am trying to pull myself together financially after a miserable divorce where I lost everything. I had to single parent four nearly grown kids, had to put alot on credit cards because I didn’t have enough income to take care of my expenses. As a result, $20,000 debt on three Visas, all Chase.

I have spoken to Consumer Credit Counselors as well as someone from Superior Debt. The first group said they’d negotiate down the interest rates and with a four year plan, I could be paid off. That sounds good to me, but what scares me is that I can’t keep a card out for emergencies. I have a Discover Card that I rarely use and it has no balance on it. With four kids, I feel I need to have a card available because who knows what can happen over four years.

The Superior Debt folks said I could keep that card out, and that they’d do that debt settlement with Chase. They suggested I could be debt free in two years. But I don’t want to get sued!! I suppose either way my credit (not that its all that good now) will be in the toilet but is one better than the other?

And my third choice is to keep making payments. But of course I’m just doing minimum payments. How much more over minimum is necessary to make a difference? I would hate to die and leave the balances to my kids.

Also paying college loans for the kids, car payments… the list goes on. All suggestions very welcome!

credit settlementLet’s start with the last comment, about leaving the debt to your kids. You do understand that your estate stands for your debt and that no one can be forced to take on your debt. Meaning, whatever assets you have (house, car, savings, checking, investments, etc.) goes to pay off the debt, not life insurance unless you so designate it. If there is insufficient assets to pay the debt, then your estate is partial or completely insolvent and the creditors get partial or nothing – depends on your state laws.

Now, about the debt. Your best plan is to get $1,000 in the bank as an emergency fund and NOT USE CREDIT CARDS FOR EMERGENCIES.

Then, make minimum payments to all credit except the smallest balance, make as large of a payment you can until it is paid off. Even better, if you can make a minimum payment on time, and then start paying at least half the bill every 2 weeks, you will clear that one up quickly. Then start on the next one.

If your kids are near grown, encourage them to get a job and start helping support themselves. I gave each of my sons limited time to get a job once they turned 16 and then they had to pay their portion of the car insurance, their own gas, their own social life etc. If I only had $25 for shoes and they wanted the $50 pair, I did not spring the difference.

Was that mean, maybe. But I now have 2 grown sons who can stand on their own 2 feet and not come running back to mommy & daddy when they over spend. CCCS was good to us.
You really are not supporting the kids if you are relying on a credit card for safety…. I know it is scary… but work really super hard at putting away $1000 in the bank somewhere, forget it is there, and shred all the cards. Your “credit card for emergencies” is then your bank account….

Life is way better that way – trust me!!! Been there….