Military Veteran - Lots of Debt

[BakerBarbie]

Hello all! First time here and looking for some advice...

My boyfriend was in the Navy for 7 years. He got out about 2 years ago and spent some time traveling the world. He racked up quite a bit of debt... About $16k on a single credit card. Aside from that, he owes about $9k on his car and the rest of his bills are monthly living expenses (i.e. rent, utilities, insurance, cell). He's had lots of past dues and not meeting minimum payments (roughly $350/mth) on the card and just found out that his brother added him as a consigner for a $24k student loan (also showing late payments) a few years back without his consent. His credit score is sitting in the low 500s.

We're trying to start a family, but his debt is really holding us back.

Thankfully I have really good credit credit at this point and will qualify for a home loan by myself.

My question is, what are our best options? Due to his credit already being so low, is he better off filing and saving the $350/mth? We understand that there will be a 7-10/yr period where he's pretty much screwed, but even if he works on paying off the credit card balance, it's probably going to take about that long anyways. Or does he let it go to collections, settle for a lesser balance and risk the potential consequences of missing a payment on an arranged plan?

We're both just so lost.

I dealt with an ex stealing my identity and taking out a personal loan ($15k) plus racking up about $3k in credit card debt 10 years back. I went from a nearly 800 credit score to the low 400s. My parents were nice enough to bail me out, but my credit has only gone back up to the low 700s over the past 2 years. I could clear out my life savings and pay off his credit card, but that just seems silly.

Please help. Any advice is better than what we've got right now.

Thank you in advance and Happy New Year!

[justbroke]

My question is, what are our best options? Due to his credit already being so low, is he better off filing and saving the $350/mth? We understand that there will be a 7-10/yr period where he's pretty much screwed, but even if he works on paying off the credit card balance, it's probably going to take about that long anyways. Or does he let it go to collections, settle for a lesser balance and risk the potential consequences of missing a payment on an arranged plan?

It he can't afford his debt, then he needs to do something to get from under that debt. Bankruptcy is one option. He won't be "screwed" for 7-10 years. In fact just 2 years after my Chapter 7 was discharged, my scores were in the upper 600s and one in the low (low) 700s. (Even your scores went from 400s to low 700s in two years without a bankruptcy. The real culprit is simply missing payments and going past due 30, 60, 90 days with collections.)

Bankruptcy is not a (credit) death sentence.

I would be remiss to say that all your troubles go away with filing, but you may find "some" creditors unwilling to lend with a bankruptcy on a credit record. For everyone of those such creditors, there are 3 creditors that will be throwing themselves at a recently discharged debtor; especially auto loan lenders.

I dealt with an ex stealing my identity and taking out a personal loan ($15k) plus racking up about $3k in credit card debt 10 years back. I went from a nearly 800 credit score to the low 400s. My parents were nice enough to bail me out, but my credit has only gone back up to the low 700s over the past 2 years. I could clear out my life savings and pay off his credit card, but that just seems silly.

I would have filed criminal charges for such. Your boyfriend may have a tough time getting that illegally co-signed student loan discharged or, at least, removed from his responsibility. I would have personally taken more immediate and definitive action. Student loans are non-dischargeable in bankruptcy.

[bcohen]

He's had lots of past dues and not meeting minimum payments (roughly $350/mth) on the card and just found out that his brother added him as a consigner for a $24k student loan (also showing late payments) a few years back without his consent. His credit score is sitting in the low 500s.

If this is really true, that your boyfriend never signed the loan papers himself, and his alleged signature as cosigner is a forgery, then he will need to file a police report and dispute the alleged debt as identity theft (which is what he's claiming it is). This will, of course, result in criminal charges being brought against his brother, which could sour his relationship with other members of his family. Still, that's a risk that he should take.

We're trying to start a family, but his debt is really holding us back.

Thankfully I have really good credit credit at this point and will qualify for a home loan by myself.

You should not consider "starting a family" with your BF, or buying a house together until/unless he does something to resolve his serious debt problems. This "something" would consist of filing an identity theft claim and bringing appropriate charges against his brother over the student loans, and filing for Chapter 7 bankruptcy to discharge the remaining debt. If he's unwilling to do these things, then I'd strongly suggest finding a different man to start your family with.