I have a discover credit card and cannot afford to pay the minimum payment of $300 a month anymore. My name is the only one on the card. I s...

Question

I have a discover credit card and cannot afford to pay the minimum payment of $300 a month anymore. My name is the only one on the card. I still have a good credit score. If I am late with payments, will my credit score go down? If I go into collections,can they put a lean on the house? What happens to my credit score?And if I die and owed discover card $16,000.00 then could they do anything to my home because my name ison the deed?

Answer

Your credit score is already toast if you are late. So it is too late to do anything to protect your score. Do you need credit? Are you applying for a car loan or a mortgage? If not, then do not worry about your credit score. That is the least of your problems.

Can they (I assume you mean Discover) put a lien on the house? Yes, if the house is owned by you or partly by you if Discover sues you and recovers a judgment. A judgment becomes an automatic lien against real property or anything else you own. Judgments last for 5 years on real property and can be renewed.

As I said, judgments become liens. If you died, the executor of your estate would have to resolve the judgments against the home. Maybe the house would have to be sold.

I would not wait until death if you have time. Discover does not sell accounts and they have a very aggressive nasty law firm in Pennsylvania. More important than a lien on your home is the fact that Discover will raid your bank account if you have non-exempt income.

You need to think smart. Is this your only debt? What do you own besides a home? Does it make sense for you to file bankruptcy? Can you file a chapter 7? Are there alternatives to bankruptcy, like debt resolution?

If you are going to stop paying Discover, then keep paying the money to yourself in whatever amounts you can afford and build up a war chest of savings. Discover will settle debts, depending on your circumstances, for about 30% to 40% pre-litigation. So before it goes to the law firm settlement is possible. After it gets to the law firm, settlement is still possible but Discover is going to want a lot more to resolve, could be as much as 60% to 80%.

If you want to discuss your situation in further detail, please email me at [email protected]/* */