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So a friend of mine recently came into a bunch of money and I am trying to get him to be smart and pay off all of his debts so he can be debt free and sitting on some bank while being able to build some sick wealth. He became disabled and had paid for one of those credit protection plans the card companies try to swindle you into and the bank went ahead and froze his account from interest and payments. So while talking with him the other day I asked if he hammered that card and got it outta the way and he said "NO why would I pay that off? That's taken care of." Assuming that the card company will just erase that debt since he is perm. disabled now and cannot return to work(serious back injury) thinking all will be fine and dandy since he paid for that insurance so to speak.
Whats the deal with these plans? I've been trying to argue with him telling him that at some point he will have to pay for that debt and that he could have issues trying to pull loans if a lender pulls his credit report and see's a credit account frozen, since he has talked of looking for some real estate. Is it possible that this debt could simply be erased with no harm to his credit report? I find it hard to believe that his report would read "Paid in full in good standing" if they had to erase it. Could someone chime in that might be able to answer these questions. TIA
I am going to move this over to CC forum where you will likely get some better input.
However, I can tell you this-- each plan is different and he needs to read the fine print and read the plan from top to bottom, front to back, and upside down to make certain. He needs to call and check on it as well before spending all his money and not being able to pay.