; Donating a time-share
; Upping FICO scores
‘Til debt do us part
Email your personal-
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Q&A with Suze Orman
The Costco Connection
P.O. Box 34088
Seattle, WA 98124-1088.
By Suze Orman
I am married to a wonderful, loving man who
is financially irresponsible. We have been
married almost seven years. I pay all the expenses, including gas for his two work trucks.
We file separate tax returns; we live in a
community property state. He has amassed
about $85,000 in credit card and loan debt
and has not paid or filed taxes for several
years, even years when he would have had
a refund. If something should happen to [my
husband], would I be responsible for the debt
he has accrued since our marriage in 2008?
Is that because I have several small store
credit cards in my name? Also, the two major
credit cards we use are in my name, and one
has a limit of $30,000, which I would never
use. His score is 420 and mine is 412. Should
I get rid of the small cards, and if I have not
used a card in many years should I make sure
it is closed?
Suze will answer
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She regrets that
cannot be answered
Albuquerque, New Mexico
IN GENERAL, any debt that comes during a marriage is an obligation of both spouses, even in a
community property state. (Debts one spouse
accrued prior to a marriage are not the responsibility of the other spouse.)
Suze Orman’s TV
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But I am not nearly as concerned about what
might happen if your husband dies. I am concerned
about what is happening to you right now. Someone
who is financially irresponsible is not wonderful.
Don’t “But, Suze …” me. You didn’t tell me he has hit
some speed bumps and is hard at work rebuilding
his finances. You said he is “financially irresponsible,” which is an understatement given that he
thinks it is OK to not file his taxes. It isn’t.
IF YOU ARE REFERRING to FICO credit scores,
something is very, very wrong. FICO credit scores
are used by the majority of lenders and creditors, so
they are the score that matters. FICO scores range
from 300 to 850. Scores in the 400s are, to be blunt,
bad. I recommend you get copies of your credit
reports (they are absolutely free at annual
creditreport.com and see what is going on; never use
any service that asks for your credit card number).
Either there are big mistakes or you are not telling
me the whole story. Did you file for bankruptcy?
Are you delinquent on any loans?
BRIAN BOWEN SMITH
If he truly is wonderful, and if he truly loves
you, he needs to show it by changing his financial
ways. Step one is to contact the National Foundation
for Credit Counseling (1-800-388-2227; nfcc.org).
As for store credit cards, of course you should
get rid of them. They are credit card evil, with interest rates often above 20 percent. (Canceling credit
cards is a different matter; that has to be done carefully so you don’t mess up your debt-to-credit limit.)
But honestly, getting rid of the store cards is not
going to push a 412 or 420 score up to 700. You need
to get to the bottom of your problem.
We have owned a time-share for many years
and are trying to sell it with no success. Can
we donate it without incurring more costs?
I just read that, as of 2015, the IRS is going
to allow only one rollover a year, and will
consider any additional rollovers as taxable
distributions (ouch). I think this is a very
important—and undiscussed—issue. It will
catch a lot of people off guard. Perhaps you
can address this somewhere.
BE CAREFUL. You need to check what fees the
time-share organization charges to transfer the
title out of your name, and any other administrative costs it may levy. And if you intend to claim
the donation as a tax deduction, remember that
the IRS requires any donation over $5,000 to be
documented with a formal appraisal, which is
going to cost a few hundred dollars, and you will
need to file some extra tax forms.
Forest Hills, Queens, New York
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I pay all my bills early and pay off my credit
card every month. We own a house and
have two newer cars that will be paid off
in two and four years. The cars ended up in
my name and the house lists my husband’s
name first. I make more than my husband,
but he has a higher credit rating than I do.
MARCH 2015 ;e Costco Connection 17
YOU’RE RIGHT about the rollover change. But this
doesn’t affect direct rollovers where money is moved
from one trustee to another.
This new rule affects only rollovers in which you
actually take money out of an IRA—that is, you get a
check or direct deposit. What this new rule curtails
is the ability to take money out of your IRA with the
intent to use the money for less than 60 days and
then reinvest it again in an IRA. That’s technically a
rollover too, and if you get the money reinvested
within that 60-day window there’s no tax.
In the past you were allowed to do this once a
year for every separate IRA you had. The new rule is
that each taxpayer gets one of these rollovers every 12
months—not one time a year for each account. C
3/6/15 2:45 PM