A common question after a break up, and in some other circumstances, is whether a person can be liable for another person’s credit card debt. Although the basic principle is that debt follows a person, there are some complications.
It can often be the case in a relationship that one party builds up the debts. Often this person will also be the person under whose name the debt has been built up. In this case it is reasonable for the person to simply allow the other person to deal with their own debts. It may be the case that lenders need to be informed of this person’s address, and this can often be ignored.
It becomes more difficult if the credit card debt is held in the name of the person who did not build up the debt. After any break up it can become very difficult to argue that the debt is not due for that person. In many cases it may be unfair but necessary to simply pay the debt off, or to reach an arrangement with the credit card companies.
Credit card companies are quite used to various life changing events, such as job losses and relationship break downs leading to a good credit card payer becoming a bad debtor in a very short time. Although credit card companies do not advertise the fact very widely in cases of genuine hardship they prefer to offer payment plans rather than dealing with a potential default. This will often involve freezing a credit card debt and charging a lower rate of interest, but there will be no further credit facilities. It will also affect credit ratings, which may affect the ability to buy or rent a house.
If the intention is to simply pay off a debt from a relationship then the best way of doing this will be to concentrate on the highest interest credit card balances first. This means that the interest is minimised which will mean that it is both the cheapest and the fastest form of payment. It can also be an idea, if the credit rating is good, to transfer the credit card on to a less expensive credit card or on to a consolidation loan. A consolidation loan will mean that the interest rates are lower and the repayments are less onerous as the amount is spread over a longer period.
