Do you have a question about consumer credit? You may find an immediate answer by using the search engine. If you can't find what you're looking for, please fill out the form, being as specific as possible.
Please note: The Ask Experian team cannot respond to each question individually. However, if your question is of interest to a wide audience of consumers, the Experian team will include it in a future column.
The information contained in this column if for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding your particular situation.
Please understand that Experian policies change over time. Column responses reflect Experian policy at the time of writing. While maintained for your information, archived responses may not reflect current Experian policy.
Topics addressed on December 23, 2009:
Girlfriend stuck with motorcycle debt when boyfriend ends relationship
My daughter was talked into purchasing a motorcycle for a friend of hers and now he doesn't want it and is thinking of dumping my daughter. If she voluntarily returns the motorcycle to the dealer, will her credit be ruined, and if so, for how long? If she is not able to pay a deficiency, will a judgment against her affect her credit?
I’m afraid your daughter is stuck with the debt and the consequences of not paying it. Sadly, this is not an uncommon situation. The only silver lining is that it could have been a far greater debt, like a mortgage.
Returning the motorcycle to the dealership usually is reported as a voluntary repossession and will have a very negative impact on your daughter’s credit history. By deficiency, I presume you are referring to any remaining balance on the motorcycle loan after the repossession. Your daughter would be responsible for that amount, and if a civil court judgment were filed for it, the judgment would appear on her credit report. More likely the lender would sell the remaining debt to a collection agency. Like the repossession, a judgment or collection account would also have a negative impact on her credit scores.
The repossession and collection account will remain seven years from the original delinquency date of the account. The original delinquency date is the date of the first missed payment on the account after which it was never again current. A judgment would remain seven years from its filing date.
An alternative may be for her to sell the motorcycle herself and use the proceeds to repay as much of the debt as possible, if not all of it. She should consider discussing the situation with the motorcycle dealer to see if they can help with the situation.
It’s too late for this advice now, but I strongly urge caution when entering into any kind of debt with a boyfriend or girlfriend, or taking on an entire loan on their behalf. At the time your relationship may seem destined to last forever, but without any legal bond in the relationship, you could be left holding the bag.
Thanks for asking.
- The "Ask Experian" team