Legal Question in Credit and Debt Law in Maryland
obligation
My daughter owes approx. 3000 to a credit card company. She is unable to work with her only income being a social security disability check, she has no property or savings. She is manic depressive and is under the care of a psychiatrist.Her health care of provided by Medicare and Medicade. Her mother and I provide her a place to stay all of her money goes to pay utilities, food necessities etc. We subsidize her when necessary but no money is left for payment to this company. She has notified the original credit company in 2003 that she can not pay anything on the debt; a company recently purchased the debt and is now attempting to collect. I believe this to be an unsolicited and unsecured credit card? I think she accepted this card in one of her weak moments. I do not dispute the validity of the debt but her mother and I refuse to accept any responsibility and will not pay anything toward this debt. From what I have read based on the US Code Collection there are little they can do since she has nothing they can attach�. Am I correct in my assumption?
2 Answers from Attorneys
Re: obligation
If you have not used the card and did not sign for it, you and your wife do not have any liability to pay the credit card debt of your daughter.
If your daughter used a credit card in her name and obtained benefits from its use and if there is no dispute as to the debt, she can be sued for a judgment on the debt which will be recorded in the county in which the suit is brought. Then the judgment creditor has to attempt collection if the debt is not paid. If your daughter has no savings and no property, she is described as judgment proof. Nothing can be collected from her. However, the judgment will remain of record for ten (10) years. If she obtains property subject to execution during this period, the judgment creditor can reach it through execution, subject to statutory exemptions.
Re: obligation
Mr. Ferrene is correct on the theory, however, money judgments in Maryland remain valid for 12 years and are easily renewed for additional 12 year periods. Moreover, interest on a judgment based on a contract for the loan of money continues to accrue at the rate provided for in the agreement. While the interest should not be compounded, even simple interest on $3,000 over 12 years at conservatively estimating 18% (the default interest rate is probably much higher) amounts to $6,480.
Your daughter will eventually become an owner of some sort of property. Perhaps she is a beneficiary on you life insurance or your 401(k). If the issue is not addressed while it is a small matter, she may be deprived of the very security blanket you are working hard to provide for her.
Also, do not allow her to file for bankruptcy without consulting with a qualified bankruptcy attorney. From the information that you provided, I believe that you may be receiving money from her every month to cover utilities or rent. Amounts over $600 paid to you within the year prior to her filing can be demanded by the bankruptcy trustee and will be turned over to the credit card company before the debt/judgment will be discharged.
Mr. Ferrene is correct that you have no direct liability, but you may end up paying the debt plus years of interest indirectly in the end. If you would like to discuss these issues more thoroughly, I suggest that you contact an attorney so that the advice can be more specifically directed to your exact circumstances.
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