I'm being sued by a credit card company

What I Did

I did something stupid with credit cards. It started when I added my brother and sister-in-law to two of my charge cards to help them improve their credit. I would have their cards with me, so I didn't have to worry about them using the cards. That changed when the company issued some limited-time rose gold cards. I called to request to change my card to the new color. They shipped the new cards to me and to them. Once the cards were in their possession, I didn't think (emphasis on didn't think) it would be any trouble if they used the cards from time to time.

What Happened

Well, things became problematic. They started maxing out the cards, which was not too bad. As long as they could pay off the cards every month, no problem. And they did. The biggest problem, however, is that they were crowding out my wife and me from the cards. We couldn't use the cards because they were typically already maxed out. Mrs. and I retreated to two other cards by the same company that only the two of us had access to use. I also started lowering their credit lines by $100/mo so that they could ween themselves off from using the cards. I didn't do this fast enough.

Eventually, they started making late payments and incurring late fees. I tend to pay credit cards as I go rather than wait until the end of the billing cycle. However, they were waiting until the end of the cycle to make payments. And, they often didn't have the money to pay off the entire balance.

One day, they had a medical problem rendering one of them unable to work. This started a cascade of problems. The first problem was that I don't have $7000 to pay off the credit cards. Consequently, they went into default. As these things go, this eventually led to going on my credit report. Once they hit my credit report, other credit cards shut off my balance transfer options and lowered my credit limits. With the lower credit limits, my credit utilization ration jumped up. With the higher utilization, it made it rather impossible to get a loan.

Things have gotten to the point where the collection agency in charge of the accounts has started the process of suing me on behalf of the credit card company. I'm not freaked out as this still has months to play out. With the holidays coming up and COVID, the courts aren't the quickest. I may not be in court until March or April. Plus, I still haven't been served the court summons. And, even if they win a judgement, I'm rather well protected by laws from them being able to take anything from me. Except for the black mark on my credit, I have the advantage. Even that will roll off in 7 years.

How I'm Resolving This

What I am doing is biding my time. I currently have, in the works, efforts to pay off other accounts. This will allow me to free up some cash flow that can be diverted to pay off the two accounts in default. If my brother and sister-in-law are at some point able to make any payments, that will be helpful. However, I am going to proceed as if I am on my own.

I am a bit disappointed that I was put in this situation. However, I have to remember that my first mistake was to put my brother and sister-in-law on my credit accounts. I knew this was a possibility. This is why I consider it more my fault than theirs. I just hoped that they would be more careful. One advantage is that after this is over, I can point to this situation if anybody else asks to be put on my credit card. I'll have good reason for refusing. In the long-term, it's to my advantage. It's also a good lesson for my family.

Through all this, I continue to accumulate BTC with the expectation that I can use my position for loan collateral. If BTC rises to levels beyond the all time high, I may have a sufficient position to borrow to pay off the debt at 1% interest. This is partly why I mentioned that I need to bide my time. This allows me to accumulate more BTC and simultaneously allow it to increase in value. Suffice it to say that I a looking forward to $100K bitcoin. Crypto will have profound effects on my credit as my position increases in the coming years. All in due time.

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