Legal Question in Credit and Debt Law in Texas

Re: Credit Card Charge Offs

Whatever happened previously, your wife is still responsible for the debt. Even if the debt is "charged off" she is still responsible. You may or may not have a claim to offset, or at least prevent them from damaging your credit, if you can prove they broke the previous agreement. Rather than risking being sued, you might see if you can work out an agreement on your own and see if you can get them to agree, in return for whatever payment arrangement you make, they will remove negative information from credit report. If you get such an agreement, be sure to get it in writing.

If they sue her, they may obtain a judgment for the amount owed and for attorney fees. If the judgment is recorded, it will operate as a lien on all real property in the county where recorded and will also show up on her credit report. Additionally, the judgment will earn interest at 10% per year. There are also several ways the credit card company could seek to try to enforce the judgment - garnish bank account, send post-judgment interrogatories and request for production of documents seeking all her financial information (which she will be required to disclose), etc. The best bet is to work something out before it gets that far.