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Should I pay my girlfriends 220k debt or not?


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My girlfriend is in credit card debt to the amount of around $220,000. Mostly credit cards but also a couple of (non-car) installment loans. We've had health problems and have no income and have been using her credit to live on using one card to pay the other. my credit is long gone but her's is still perfect payment history although she's almost maxed out. So I sold some land for $220,000. So it's now possible to pay off her debts. What would be the best way to do this? Should I just let her default and we live off the cash? Pay off ALL the debt then go back paying the bills with credit card advances? Pay off part of the debt? At this point she has two 20k cars and 30k in the bank so I don't know what to do with those assets if she declares BK. I have CA's after me and am in the credit repair process so I don't feel comfortable with holding assets. In the past she saved my credit in a similar way so I trust her and owe her as well.

My thinking is to pay down all her debts so at least her credit improves and for now continue to live off credit until we can get some income going. This way she still has her good credit and we still have that money to spend (and perhaps more if we can obtain more credit).

Any ideas? Thank you.

BTW, I have a discussion going at Debtorboards too. Hoping there's people here who aren't there.

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This is just going to be my opinion, for what that's worth.....

 

No one here can tell you what you should do.  A lot of this decision depends on your relationship, how much of the debt is actually tied to you, and so on.  I can tell you what I might do, but your mileage may vary. 

 

First, it makes no sense to me whatsoever to pay down $22K worth of debt to clear the credit, only to go back to living off of credit all over again.  Every time you get credit, it costs you more money than living on cash does.  You pay interest and fees that you otherwise would not have to pay.  Also, your possible plan to live off of credit again assumes that you can get credit to live on.  With this much debt, it could take a long time before anyone is willing to extend credit to her in any significant amount.   Plus, you have no income, which credit grantors will not look upon in a favorable light. 

 

A good friend of mine is a pilot, trained in the USAF.  When it comes to flying, there are three steps, which must be done in order.  First, you AVIATE, meaning you fly the plane so it does not fly itself into the ground and crash.  Then, you NAVIGATE, so that you do not crash into other air traffic.  Then, you COMMUNICATE with your wingman, etc.  The point is, you first have to survive right where you are.  You still have to pay your utilities, you still have to eat, etc.  In my opinion, if you use all that money to pay down these debts, you will get rid of them, but have nothing left to eat with TODAY.  I might consider using some of that money to pay down some debts, but it's probably a good idea to keep some of it in reserve to survive day to day with.  I might also consider trying to find ways to make my money work for me.  You have a circumstance which could benefit you in this--the money is yours, but the debts are in your girlfriend's name, so that $220K would not be considered in any bankruptcy should she go that way.  Keep in mind, we dont know your budgeting, living expenses, amount of credit you have available, and so on and so on.  But without asking about all of that, living on credit is how you racked up that debt.  Living on credit again will have the same effect over time.  If you always do what you always did, you will always get what youve always gotten--meaning, dont go back to living on credit like you did before, and expect that things will turn out differently in the end.

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I would make appointments with 4 or 5 bankruptcy lawyers and see what common thread runs through what each says.  You can't even consider it or rule it out until you know if it's even an optionot and, if it is, what the ramifications will be. 

I can tell you this, though.   While it seems irrelevant and/or counterintuitive, the time to file BK is while you still have good credit.  Once you start racking up late payments and charge-offs on your report, when the time comes to start rebuilding you'll have that to deal with in addition to the BK. My sister had 700 FICO 5 years post-BK because the only derogatory info on her report was a BK.  She also got to keep her car and continue making payments, so that one tradeline survived the BK and helped her build her credit. 

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