Loan via Credit Card Balance Transfer Consolidation - $1,700

What is the name of your state (only U.S. law)? NY

My "friend" of 8 years was in serious credit card trouble. I helped her by consolidating all her debt ($8,500) onto my credit card for 0% in Sept 2008. She told me she would pay it off soon, but didn't happen. Missed 2 payments and the rate went up to 22% in June 2009. She had no money to pay off the debt and couldn't get approved for a credit card.

I do another balance transfer because I know if she's being charged $300/month in interest the debt will never go away. In June 2009 the debt is down to $4,500.

I put $3,500 onto 1 credit card and $1,000 onto 2nd credit card - both under my SSN only. Nothing is in writing just verbal agreement.

The $1,000 was split separately to purchase a computer from her which I pay on.

Friendship breaks up. I tell her to payoff her debt or take it back. She pays down to $1,700 and emails me for her files back on her computer and also asks me if she could have the option to buy it back. In that same email she states she has no intentions of ruining my credit or not paying back the credit card debt of $1700. but that she wants her files back.

I respond by email that I insist she pays off the debt first and then we'll discuss the computer later.

She emails me back claiming that she "left" her computer and wants it returned to her. She's trying to make a case that she never sold me the computer since there is no bill of sale and the court does not recognize a balance transfer of debt as payment.

She's offered to payoff the debt plus $1,000 and wants her computer "returned" to her. She will not pay cash and at this point because of all her lying I don't trust a cashier's check from her because stop payment can be made on them. She didn't want to sign anything either.

I didn't do the deal with her because it wasn't an honest one and I feel like anything should be false about our transactions.

Should I take her to small claims? Judge vs Arbitrator? How should I present this? I have a lot of emails. In the beginning she admitted the debt, then she goes on to say that "it was my choice" to take her balance transfer. But c'mon who really gives a $8500 in credit card gift? And who buys a used computer without programs?

Can she sue me for "stealing" her computer because I didn't get a receipt and did it in the form of a balance transfer?


She stopped making payments on the credit card debt last week and not I'm paying offer her $1,700...



(lesson learned....never lending...!)

From the sounds of it, you "purchased" her outstanding debt from her. Her previous obligation are now yours. BUT, your obligation to pay for the CC holding her debt in your name remain your responsibility. Even if she stops making payments, it will be reflected on your credit scores, including higher interest rates for your cards.

You do have a claim against her for the remaining $1,700 plus any interest she would have been obligated to if her debt remained with the original debt holders.

A check from her is an acknowledgment of the debt. If she stops payment it becomes incumbent upon her to show she was defrauded into writing the check or that you have no right to the money. If she can't, the check is generally an indication she owed the money. That is far easier to prove in court than providing a lot of other paper showing her debt.

You may not hold her computer "hostage". That could be regarded as theft. Unless you can demonstrate some way that the computer was a gift, it still belongs to her.

My advice, take the check. It is always better to settle out of court than go through the hassle. If she "stops payment" on the check then sue her for the value of the check plus damages. Delete any of YOUR personal information on the computer then return it. Do not wipe the HD as if it does go to court she could then sue that you damaged her personal files.

Then put it behind you and move on.

Good Luck.