To skip back story, you may scroll down to the numbered questions. My questions are concerning my husband's responsibility for credit card debt on an account I opened before our marriage. He has never been listed on the account. We live in California.
First, some background information. I am 30 years old and, up until recently, had very good credit. I have had only one credit card for 12 years that I only used for emergencies and always paid the monthly payment on, often more than the minimum. I did have a couple other credit cards in that time that I had briefly, but paid off quickly and closed. I had always been frugal and had a nice chunk in savings. I paid cash for both cars I have ever owned, never wanting to be weighed down with debt. I was able to get away with only $3,500 in student loans because of grants and personal savings.
Then, 2 years ago, I got married and had a baby. We had health insurance, but with the maternity, it was costing us over $700/month. Also, my husband had bought a home (in pricey San Diego) prior to us meeting. A commitment he could make easily before having a family to support, but with all the new expenses, we became a sinking ship. In no time at all, my $2,000 CC debt turned into $7,000, being used to pay bills (house tax, home insurance, etc.). My student loans fell by the wayside because we didn't have the money to pay all of our bills every month, and that one had the lowest interest rate. My husband had excellent credit as well, and only had one credit card with a low balance. Let it be known that we are both hard working people. My husband has put in 60+ hours a week for the last 3 years, but hasn't gotten the raises/bonuses that have been promised (a whole other can of worms).
We live a very meager lifestyle. We share one car (a 2000 Chevy Tracker that my husband bought before we met - one of the cheapest cars on the road). We work less than a mile from home, so gas expense is very low. We don't have cell phones, big screen TVs, or any "toys" to speak of (just this 5 year old computer). All the clothes and shoes I own are at least 3 years old, minus some gifts. All the clothes and toys our daughter owns (which isn't much) have been given to us by family. We don't eat out, and have very rare "splurge" days. For a long time, we didn't even have meat in our diet because it was considered an expensive luxury. Even now, it's not regular. So, it's not a budgeting problem. The money just isn't there.
Despite our hardship, we have continued to pay the minimum payment on my credit card. We are both responsible people and have always tried to be as financially responsible as we can. We just fell on a hard time and have been one step behind since then. We are always waiting for the next paycheck, and it always seems to come just one day too late. So, it was only a matter of time before the credit card bill was one day late. It happened last August. And BOOM! The $40 late fee. Then, the CC company decides to take a look at my credit report. They see the default on my school loans and... BOOM! Interest rate goes to 31%.
My husband was in a 3 year fix rate on his home, that just expired. Our house payment is now all that we can afford. We can't sell now, because with the housing crisis we are upside down. It's so frustrating for us because we have very few bills and frills, and yet, we are drowning. We even had to drop health insurance to catch up a little. Luckily, my daughter can still get health care through a state program; although, we were just under the financial qualification, so if my husband gets any kind of bonus or raise, she will be ineligible.
Bottom line, we can no longer afford the minimum payment on my credit card with the interest rate at 31%. The minimum payment this month is $275. I called to let them know my situation and asked for a reduction in the interest rate. They denied my request. I am scared because I know once we become delinquent, we will be be in a hole that we will not be able to recover from. If we miss one month, next month's minimum payment will be well over $600 and fees will stack up quickly. This is money we just don't have, and won't, for the foreseeable future. On a side note, I reviewed my statements from the last 12 years and realized I have paid them more than twice the amount that has been charged to the account.
I have a few questions. If I am unable to keep up on these payments, I realize my credit will be affected and eventually the debt will go to collections. I am prepared for that, but know the money to pay will not magically appear when the creditors are calling for a lump sum. Hopefully I can negotiate a realistic payment plan, but I suspect by the time it goes to collections, the debt will have ballooned to $10,000 and I will be expected to pay minimum payments near what I can't afford now with the debt at $6,500.
So my questions are...
1. Is my husband responsible for the debt on the account that was opened 12 years ago and is solely in my name?
2. If I am sued, could his wages be garnished or bank accounts solely in his name be affected?
3. Can a lien be put on his house or car, which were bought before we met and are in his name?
4. Can his property, such as an old computer, TV, etc., purchased before we were married be considered marital property and subject to lien?
I don't have any assets to liquidate. Everything of value we owned was sold back when we were struggling just to eat. Naturally, I am just afraid they will go after the only two things we have left, which is my husband's house and car. But as I mentioned, he has no equity in his home anymore anyway and his car is years from being paid off.
Thank you for any information you are able to provide.